Traders must be loving this. Bit scary for me:mellow:
Printable View
Traders must be loving this. Bit scary for me:mellow:
http://nzx-prod-s7fsd7f98s.s3-websit...499/351334.pdf
MVM acquisition completed - $268.5m less from cash reserves with a further $120m to be invested = $388.5m.
Adding fixed asset base to a low cost, flexible and variable business model - not a great idea imo. Why buy the cow when you can buy the milk?
Doubt there will be a share buyback of any meaningful quantum when results are announced in August with the reset strategy requiring a much much higher level of advertising, promotion and distribution spend to offset loss of sakes from the low cost daigou channel?
Next stop on sp - A$5.50?
Results will be after a tug of war between DB & the BOD to present the worse (DB) vs the justification (BOD).
DB will win hands down - BOD has no credibility left in the capital markets.
https://www.fool.com.au/2021/07/30/o...esult-preview/
A2 Milk Company Ltd (ASX: A2M) shares will be on watch next month when it releases one of the most highly anticipated results of reporting season.
Ahead of the release, I thought I would look to see what the market is expecting from the embattled fresh milk and infant formula company.
What is the market expecting?
The last 12 months have been very tough for a2 Milk, leading to countless earnings guidance downgrades. In light of this, expectations are very low for its result in August and this has been reflected in the performance of a2 Milk shares over the period. Since this time last year, the a2 Milk share price has lost a whopping 70% of its value.
According to a note out of Goldman Sachs, its analysts are forecasting revenue of NZ$1,221.1 million in FY 2021. This represents a 29.5% year on year decline and is at the low end of the company’s last revised guidance of NZ$1.2 billion to NZ$1.25 billion.
Goldman explained: “We forecast the key decline to come from the ANZ division driven by continued impact on the Daigou channel with sales at NZ$573.1mn (-40.7% yoy). We expect direct sales into China/other Asia to also be down -18.2% to NZ$572.0mn.”
In respect to earnings, Goldman expects the company to achieve its revised EBITDA guidance of NZ$132million to NZ$150 million. It is forecasting EBITDA of NZ$140.7 million, down 74.5% year on year.
Finally, on the bottom line, the broker expects a2 Milk to reported a 74.7% decline in underlying net profit after tax to NZ$98.1 million.
Will it pay a dividend?
While the company has suggested that it could consider capital returns, Goldman Sachs isn’t expecting this to be the case in FY 2021.
It commented: “While we forecast operating cash flow to be down -87.5% to NZ$53.5mn, we expect capital expenditure for FY21 to increase significantly to NZ$50mn vs. NZ$5.8mn in the prior year. We do not expect the group to pay final dividends and expect it to maintain a net cash position of NZ$806mn at the end of June 2021.”
Are a2 Milk shares in the buy zone?
The note reveals that Goldman Sachs continues to sit on the fence with a2 Milk. It has retained its neutral rating and $6.96 price target on a2 Milk shares. Based on the current a2 Milk share price, this implies potential upside of 13% over the next 12 months.
As attractive as that potential return may be, Goldman doesn’t appear to believe the risk/reward on offer with a2 Milk shares is compelling enough to upgrade its shares to a buy rating.
I thought the branding of the new US market product is unfortunate. The whole selling point of A2 is its purity (it contains just A2). 'Half and Half' means half A2 and half - what? If the answer is A1 then what they are promoting is just regular milk! I had to search on the net to see the branding meant 'half cream' and 'half milk'. That wasn't on the large print on the carton. It sounds a bit like the old 'silver top' which back in the day was just regular milk (before the days that the general public knew about A1 and A2).
SNOOPY
I think you will find the yanks know 'half and half' means half milk and half cream. That is their terminology.
Much like if I told you KFC was 'choice as bro' you would know to dive in and eat a bucket of it. But a yank would have no clue as to what I was saying.
Reminds me of a trip to Canada I went on many many years ago. Everyone was drinking Bud Light and Coors Light. I was wondering why they all wanted the low alcohol beer because back home in NZ we could get Steinlager light which was 2% low alcohol beer. But in North America 'light' meant low carb.. not low alcohol.
Agree Rawz, Americans know exactly what Half and Half means..... it is not intended for Kiwi consumption.
Coffee creamers and Half and Half all the go in USA they say.
More on the purchase of MVM FYI.
ATM is yet another NZ company which thinks it can make it big in the US - by pumping in heaps of cash (made from existing operations) to build up and buy sales revenues.
They all forget that the US is the most competitive (and arguably the most efficient) market in the world to operate in.
Now ATM owns MVM only fair to compare.
SML currently trading at PE of 12.54 and EPS of 29.66
ATM currently trading at PE of 14.59 and EPS of 43.39
ATM was once an underdog in Australia making losses. It is now profitable, while selling at a premium with an enviable market share. ATM repeatedly say that the USA is following the same early trajectory as Aus. Way to early to write off ATM in USA IMHO.
Given past years timing FY21 result could be out end of next week.
No doubt DB will be sweeping all the cobwebs out of the cupboards!! :scared:
Need beagle to buy in...lol
Atm is more healthier than ZEL..no smoke
Add Milk Powder to Long List of Stocks Facing China Policy Risk
Bloomberg News
Dairy products manufacturer China Feihe Ltd. led losses in the sector on Friday, slumping as much as 9.3% in Hong Kong after the Xinhua News Agency reported that some experts are concerned by marketing that is making mothers choose milk powder over breastfeeding.
06:10p.m. Trade in A2M.6K9 @ 3:38:04 TSN# 1140434867 Cancelled (ETR)
06:01p.m. Trade Under Investigation in A2M.6K9 @ 03:38:04
What does that all mean on ASX
Things finely balanced for the next trading update.
In China HC poster advises "422 new Mother & Baby stores added in last 4 weeks." Total M&B Stores "up 50% from last revised FY 21 update."
Meanwhile interesting update on USA progress.... Apologies if its been posted before. Here it is.
As always DYOR and take care.
https://www.fool.com.au/2021/08/10/a...h-broker-note/
another bullish broker Bell Potter retained its buy rating and A$8.5 target price.