Been no ‘analyst’ reports published as to how A2 numbers are not reliable and the future is bleak ...that would be a real ‘distort’ report.
Printable View
Been no ‘analyst’ reports published as to how A2 numbers are not reliable and the future is bleak ...that would be a real ‘distort’ report.
I think we can expect to see the $14 range until another positive announcement or the HYR till we see any movement again in the SP.
Doesn't seem to be moving much over the past few days
Then again a bad report could see A2 drop an even lower do we think?
A2 still has a healthy back pocket, wonder what they plan to spend that money on, advertisement, new products?
They are a marketing business and yes they are expanding themselves into the world. They marketing their products heavily into China , Usa ...
As the Management and the Board indicated at the last guidance , the only problem they had was the daigou chanel and they will still match and forward the forcast earning.
I am sure they had a record of over delivery.
Very looking at above $15/share before Christmas.
Just cant seem to kick up. More stuff happening in HK. Just shows that the CCP doesnt know nor care about capital flight and my friends who have left say they have no plans to return to the trading floors in Hong Kong. These are mostly australians who have now left. Singapore is now seen as a safe haven in the political storm. If the local vaccine works in china then other china products will get a boost. It certainly looks a buy if the market is not effected and it looks like AUS and NZ govt will be careful.
"Bit late for the AUS govt to be careful"
yes ! but it has perhaps offered a buying op. If the consumer ignore central command. Is there a buy china campaign on ?
Good point Biscuit but where do you buy local goods... everything is , almost everything has made in china on it... Is there a central command in china for the locals to buy local?
It's natural evolution, Jabberwocky. First they make cheap crap, that silly people buy because it is cheap; then, as they get better at quality control, more people want to buy it because it is cheap but the quality is ok; then the price goes up to match the better quality and everyone is briefly happy; then it gets trendy, the price goes up and only silly people buy it.
actual data is what we need.. soon market update..
https://www.news.com.au/finance/econ...0ad02026f8c717
Honey, dairy, fruit and pharmaceuticals potentially on China’s hit list if Australia continues to toe blindly the US line.
https://www.news.com.au/finance/busi...7291796547809f
This should cause China to take a pause - especially now that Australian government has consciously dampened the conflict.
Be worth at least $2.50 on ATM’s sp if calm & peace breaks out between the two nations?
Some more light reading...
https://seekingalpha.com/article/439...nt-opportunity
Seems a very balanced article. Here's a quote from it on valuation...
A quick peak at price to earnings ratios in Refinitiv with the share price at NZ$14.18 puts the P/E with earnings estimates for the end of June 2022 at about 21x, not bad for a company capable of growing above 20% over the coming years. Morningstar puts the company’s fair value at about NZ$16 while according to Refinitiv, sell-side analysts have a median fair value of NZ$19.4. Our own modeling puts the fair value somewhere between NZ$18 and NZ$22 depending on how aggressive we are with revenue growth estimates. Assuming the company can grow at 20% (slow versus historic standards) over the coming decade, the fair value would land closer to NZ$30, offering more than 100% upside. It is inherently difficult to model such high growth potential companies, and we generally err on the side of caution when deciding how much to pay for growth over longer periods.
At the low end of our valuation zone of NZ$18 and requiring a margin of safety near 30% for a company with plenty of risks, we are looking for an entry point below NZ$13, but already see value in the opportunity.
I think they will be lucky to get in under $13 without more negative news coming out, but who knows. The sp still going down. Bought some more today as it dipped under $14. There are plenty of different valuations out there but I don't see anyone with a valuation under $14 (except the sellers).
China has it appears from the news flashes cut its belt and road investments from 70 billion to 4 billion. It may start to ramp up again next year but the worlds is in flux. Still milk is a basic supply product and not likely to be subject to any variations in spending such a this latest plunge in china lending ... They will still buy milk...
Have the clocks changed in Sydney or something?
ATM sp didn't get hammered until 1pm today (11am EST) - an hour late!
:rolleyes:
another newspaper outlet saying a2 might be punished if china takes action on aussie dairy
Dairy
Both the milk and cream processing sector and the milk powder industry are “highly vulnerable” to hefty Chinese tariffs.
ASX-listed companies like A2 Milk Company Ltd (ASX: A2M), Bega Cheese Ltd (ASX: BGA) and Keytone Dairy Corporation Ltd (ASX: KTD) could see their stock prices sink if that happened.
https://www.fool.com.au/2020/12/09/w...a-punish-next/
With continued market share gains in China, the brand should only strengthen and revenue should continue to grow. Market share gains are supported by smart management decisions around a Chinese label, effective marketing and growth in the number of stores in its distribution channel. According to the company, there are over 120,000 MBS in China and with a2 only reaching less than 20,000 of them so far, there is a lot of runway left to reach China’s growing middle class.
When we look longer term, the US market may be the real dark horse. The company is currently building scale in the market, but it could eventually be a meaningful profit contributor. So far, the progress is impressive, and the market is huge. The US is the largest global milk market with a growing premium segment. According to a2’s September 2019 investor presentation, the premium refrigerated milk market in the US is $12.8 billion which is multiple times the size of the Australia and New Zealand market at about $1.7 billion and the Chinese market at about $4.6 billion
Growth has been hampered by COVID-19, but it is set to continue as the pandemic fades. The company should continue gaining market share in its main markets while expanding its product range to areas such as solutions for expecting mothers and older toddlers. Investors can reasonably expect strong double-digit sales growth for many years to come.
I LOVE IT , SUCH A GREAT MANAGEMENT FROM A2MILK.
Supply chain risk is also substantial. The a2 Milk Company is heavily reliant on key suppliers such as Synlait and Fonterra and Chinese distributor China State Farm (the company’s exclusive import agent in China). The company has tried to reduce supply chain risk through contractual agreements with its key suppliers, but it remains largely dependent on continuing symbiotic relationships. The a2 Milk Company also has a meaning ownership stake in Synlait, but remains a minority investor. As mentioned, the company recently entered discussions to buy Mataura Valley Milk, partially to reduce supply chain risk, and has enough financial flexibility to continue to vertically integrate, but that would be at the cost of making the company more capital intensive. Mataura Valley Milk is currently majority owned by a highly respected China state-owned enterprise – China Animal Husbandry Group which is a sister company to China State Farm
Please see , it is just a small amount , just to hold the Ausie economy. You can see in total just a bout 1B. Very very small.
2011 COFCO Sugar Tully)Sugar QLD $146)m 100%
2011 Bright)Food)Group Food Manassen)Foods NSW $530)m 75%
2011Chinatex)Australia Food DairyHoneyBeefNZNZAustSupply)Chain)setup
2012 Shandong)Ruyi Group Cotton Cubbie)Cotton)Group QLD $277)m 80%
2012Beidahuang)Group Cropping Dennis)Joyce's)family)cropping)companiesWA $23)m 100%2012
2015Tianma)Bearing)Co WineryBeefFerngroveWollogorang and)Wentworth)stationWANT$15.5)m$47)m100%100%
2012 Shanghai)Zhongfu)Group Sugar OrdIEast)Kimberley)Expansion)ProjectWA $700)m Lease)and)develop)land)for)sugar)cane
2013 New)Hope)Investment)Fund Beef)ProcessingKilcoy)Pastoral Company QLD $60)m Majority
2013 Chevalier)Group Fruit) Moraitis)Group NSW 70%
2014 Rifa)Group Grazing Blackwood VIC $27)m 100%
2014 Goldin)Group Horse)breedingLindsey)Park SA 100%
2014 1847)wine)Co Winery Chateau)Yaldara SA $15)m 100%
2014 Hong)Kong)Yingda Investment)Co Winery Hollick)Wines SA Majority
2014 Hailiang)Group Grazing)Grazing)Hollymount)StationMount)DrivenQLDQ LD$31.5)m$10)m100%100%
2014 China)National)Machinery)Industry)CorporationDairy )processingGreenfield)ProjectDAIRY)ON)HOLDREPOSITI ONING)TO)WAGYUQLD $500)m Joint)Venture
2014 Foresun)Group BeefprocessingTabro)Meats VIC $25)m 100%
2014 Heilongjiang)Grand)Farm)Group Meat)processingV)&)V)Walsh WA Supply)Agreement
2015 Dashang)Group Grazing Glenrock)Station
https://www.news.com.au/national/pol...563b1b284970e3
Lamb just added to hit list by China.
So food is not immune.
https://www.news.com.au/finance/economy/australian-economy/china-cracks-down-on-more-australian-exports/news-story/3b311f11a0179a5aae2c74b0c3d26e75
And more restrictions on timber exports too.
Guess market is concerned that dairy will potentially be hit as well.
Someone here who analyses ATM closely maybe able to help with this question :
How much does the daigou trade out of Australia represent by way of sales and profits to ATM if China shuts that down via a dairy export ban? Seems like that is the only exposure ATM has to an Oz dairy export ban by China.
This could explain why the market is concerned about the Oz/China situation.
Regardless of the underlying reasons, fear has a grip on the share price well and truely. I'm not suggesting long holds get out now, that would be silly, the future is bright while the short/recent term has been ugly.
The chart says ATM has basically averaged sideways since 2018 which is a pain because it lends itself to momentum trading rather than a solid continuous fundamental growth story. It seems ATM is not immune to shocks and has its fair share of them for the past few years.
Its SP is currently having a good look at the multiple lows providing support over a longish term, with potential, if it doesn't bounce like right now, to test the gap to $13. Troubling times, where everyone needs to reflect on their own investing/trading strategies and try to make the best of it.
Pretty much as soon as Covid was a big deal I sold ATM for about 60% gain on fears of suppliers to China, and then watched in disbelief as it proceeded to double bag! But now it's back well under my exit and am very interested to pick a new entry. Albeit on a momentum basis, when momentum changes to the upside.
gltah.
This chart from a FY20 results presentation may give some answer for you.
Attachment 12133
If you look at the RH chart, I take it that the blue panels represent ANZ sourced IF via Daigou channels. As you can see this channel was declining from FY16, while other distribution channels were increasing.
This trend would have been more extreme post Covid and we are yet to learn how effectively the alternative channels have taken up the slack.
If there is any future Chinese action against Daigou channels, I suspect it will only serve to further strengthen the alternative channels trend shown (which also benefits the CCP owned companies tied to ATM's local distribution/production.)
I always regarded the Daigou channels as 'opportunistic' and never a long term channel so replacing this channel is actually a good move IMHO.
I also agree with Baa Baa's comments as below re short term fear and see the current SP as finely balanced with large gaps both above and below the current SP.... It's a moot point which way it will go in the short term, however, the long term view remains favourable. JMHO and I hold so am biased.
I'm not sure how a pallet of NZ made infant formula that delivered to Shanghai with stopover in Sydney's warehouse become AU made? But I guess it's a mystery of life and beyond my comprehension.
As for your question, I have a bit different understanding of the chart posted by Left_field. You can find the following information in 2020 Annual Report:
Australia and New Zealand $’000 China and Other Asia $’000 Infant formula: China label – 337,715 (brown on chart) English and other labels(1) 745,055 (blue) 341,120 (purple)
(1) Revenue is allocated based on management responsibility and usually reflects the geographical location of the Group’s wholesale customers. It is understoodthat a significant portion of the infant formula sales to customers in the Australia and New Zealand segment are ultimately consumed in China.
Based on note (1) my understanding is China label (brown) infant nutrition products that sold via mother and baby stores (MBS), modern supermarkets and domestic e-commerce retail channels. English label (purple) ANZ-sourced by Chinese based resellers and cross border e-commerce (CBEC) channels. English label (blue) ANZ retailers, ANZ-sourced by AU based resellers. So, the portion you are looking for would be partially in "blue" and "purple" parts of revenue. However, I still don't get it how China's ban on AU dairy will affect any of this?
Attachment 12134
Been getting into this TA business of drawing lines everywhere.
Looks like an interesting area of support.
https://www.aljazeera.com/economy/2020/12/9/australia-2
Things are only getting hotter
This kinda sums up the situation for me. Competing influences of...
* Product factors, is A2 milk really a 'thing' (and are the various markets prepared to pay a premium for it)
* Covid-factors, such as daigou 'choking' (never a huge, or reliable channel in its own right anyway)
* Geo-political factors, ie China really is taking Oz to task here to prove a point (will this come to affect ATM?)
* Economic factors (will ATM be able to continue as a premium 'growth' story as it expands in various markets, not just China)
* Investment factors, ie institutional v's retail investment (RobinHooders / Sharesies investors driving much of the present bull market)
* ASX shorting factors, which have been a huge influence to date, but historically/inevitably end in a momentous short squeeze (eg TSLA)
* Market factors, as Baa_Baa refers to above, including TA support levels (if you're into that kind of thing)
* Personal factors, such as balanced exposure, risk appetite, buy-and-hold v's ?, etc. You know, the usual stuff :)
Which is a heap to consider, but balances out for every individual: if/when to buy in, and at what price?
Personally, I'm in, and adding every time the sp drops below $14-ish, but this is a small part of my portfolio and balanced by other non-dairy, non-NZ, non-China, non-equity, non-whatever.
It's a risk/reward deal, like any other investment decision you make. ie you balance your risk v's the possible rewards.
Don't mean to sound preachy, but that's about it, as far as I can tell...
Which - obviously - invites comment on other factors I've missed..
:t_up:
I'll start, as I've just realised I missed...
* The China domestic market factor, where they REALLY ARE sold on premium imported infant formula v's domestic, after the 2008 melamine scandal.
I imagine if China does target dairy which I highly doubt they will they'll be selective and won't target companies with Chinese connections such as A2. It could actually be a positive for A2 but the market obviously doesn't agree.
https://www.weeklytimesnow.com.au/ag...34d6dd6775443c
China not increasing tariff on Australian dairy despite having the right to double rates to 10%.
Completely agree - would think given the sophistication of A2 from a logistics, distribution and marketing perspective, management would have avoided putting too many eggs in the Daigou channel basket.
Surely, while efficient etc, it was always a channel characterised as high risk. Even without China-Aus tensions, any number of things could have disrupted this channel?
Maybe the market is overestimating the influence, and impact of Diagou channel on A2 ability to get product into China?
Clarification at next market update could go a long way to alleviating market nerves.
Important to appreciate the difficulty of knowing the real size of the Daigou channel.
Whether a young mom is buying IF from her local Aussie supermarket for her baby, or parcelling it up and sending it back to relatives/friends/on-line orders etc in China would not be identifiable as a daigou sale by ATM.
Sales to large corporate daigou's could be known if they purchased direct from ATM. However, I suspect many smaller corporate Daigou's purchased from existing wholesalers/retailers (as evidenced by the 'shopping teams' that were once seen plundering Australian supermarket shelves.)
Ssssoo the true extent of this channel may never be known.
They say share prices are driven by greed, fear and hope.
ATM currently is a great example of all 3 at work!
you guys only talk about china , china ..but forgot about US.
It got 900% increased and continue expaning itself... imaging the Us markets... and they are just starting...
https://www.news.com.au/finance/busi...b51bce1b3a8c58
A list of 41 Aussie vineyards that are actually owned by Chinese companies has been leaked, with locals told to boycott them in retaliation.
Silly stuff - what's the point of escalating the dispute?
A2 up on the ASX open?
And back down haha
It is really becoming idiotic.. It boys playing boy games. Egos are coming into this argument. Aussie wants to be the bully and then they find there is a bully bigger than themselves. China will survive without Aussie and their people are strong and more united than most other countries.
Aus can do a special trade deal with Boris..
more defaults in china...
Ignore the Aussie perspective............ this from an article by Fran O'Sullivan commenting on why China is keen to joins NZ's CPTPP Trade agreement.
"...New Zealand was the first country to promote China's accession to the World Trade Organisation. First to recognise China as a market economy. The first developed economy to cement a free trade agreement with China. And first to add Hong Kong and Taiwan to that trifecta of economic partnership agreements...."
I'm taking a break from posting now.... Merry Christmas all and see you in the New Year.
Last call for $14/share.
I have a feeling it is going to reach Mt Everest's peak any time from now.
Topped up @ $13.99 :)
My initial (and until recently, by far my largest) investment in this stock was at $21, and I have been topping up at various points on the way down from $17.
I matched my initial investment @ $13.70, and will continue to nibble away with smaller chunks over the coming weeks.
Would be nice to see $21 again.
This wont effect AT but it seems that if NZ did this sort of growth the international markets would complain...we have never trusted china markets and my friends in Hong Kong will have lost money.
https://edition.cnn.com/2020/12/09/e...hnk/index.html
now image if US companies started doing this in some numbers...
Up we go and now A2milk is happy to Rock and Roll
Politics 18:42, 10-Dec-2020
Wang Yi speaks with New Zealand's newly-appointed Foreign Minister Mahuta
Chinese State Councilor and Foreign Minister Wang Yi had a phone call Thursday with New Zealand's newly-appointed Foreign Minister Nanaia Mahuta.
Wang congratulated Mahuta on her appointment, and acknowledged the support exchanged between the two countries during the battle against the COVID-19 pandemic.
Wang also called for a prompt signing of the free trade agreement upgrade protocol between the two countries. He said China is willing to work with New Zealand to move forward their bilateral relationship in a new era, and actively foster sources of growth in emerging fields.
Fran O'Sullivan: China's sudden interest in Asia-Pacific trade pact chance for Jacinda Ardern to lead
Prime Minister Jacinda Ardern has been surprisingly quiescent when it comes to welcoming Xi Jinping's outright interest in China joining the Asia-Pacific's most sophisticated regional trade pact.
The Chinese President surprised Apec-watchers when he...
https://www.nzherald.co.nz/business/...YRAGCBJCK4PGE/
Yeah but the ASX believes A2 is Australian, that is surely to effect the share price still?
"Wang Yi "
appears to be awaiting a change of US leadership, mean while other china players are slugging it to the AUS side kick.
The only reason the china dragon hasnt breathed fire on the kiwi flightless bird is that it would look very poor for all those small Belt and Road country's.
They would say "whatch out NZ just got burnt and they cant even fly".
Tomm, its lovely that the NZ government got some reassurance but its calculated. No point in the dragon breathing fire burning the wings of the flightless bird.
Bad form, better to beat the Kanga up who has the boxing gloves..
It should calm down once the new man is in place as YI said this week.
Its classic Art of War.
https://www.news.com.au/finance/econ...5660bade77e60d
Up goes the rhetoric - the big bully Australia does not take kindly to being bullied by a bigger bully.
Oh well, looks like we could be on for more fireworks yet. China is not going to back down and lose face.
Takes a lot to knock a Kanga out, they bounce back... harsh training and conditioning program undertaken by junior Kanga's in the out back...
Remember the Kokoda Trial....
Iron ore no exception in twisted China-Australia trade
There has been intense coverage addressing deteriorating ties between China and Australia and falling bilateral trade, with a growing list of Australian products - ranging from barley, to timber, lobster and beef - facing the so-called "sanctions" from China.
It is wishful thinking that iron ore could be an exception in ongoing China-Australia trade rows
https://www.globaltimes.cn/content/1209641.shtml
if iron ore is on the table dairy is really on the table as iron ore is needed by china more than dairy
some comments a few months back that Aus ore is valued by china due to grades.
imagine if it goes under 10. not a chance .....
global times is considered by some a mouthpiece of the chinese govt. need to remember this stoush is about more than trade its about control of the pacific under china rule. so everything is on the table
Global Times is of course the mouth piece of the CCP.
Guess Brazil will be rubbing its hands in glee at the prospect of replacing Australia as the biggest supply of iron ore to China?
Realistically, iron ore will be the last product to be hit by China but knowing the way China very successfully fought the trade war with the US, it will be busy setting up alternative supply lines while maintaining Oz supply in the meantime.
China did the same with coal and now gets a big chunk of its needs from Indonesia.
In this news article, if new Zealand is leading this Asia-Pacific Trade and Xi is asking to join then there won't be disregard to New zealand A2M.
Fran O'Sullivan: China's sudden interest in Asia-Pacific trade pact chance for Jacinda Ardern to lead
Prime Minister Jacinda Ardern has been surprisingly quiescent when it comes to welcoming Xi Jinping's outright interest in China joining the Asia-Pacific's most sophisticated regional trade pact.
The Chinese President surprised Apec-watchers when he...
Chinese like to diversify:
https://asia.nikkei.com/Spotlight/Ca...iron-ore-field
They soon might break the grip of the Australian bully ...
Last call ..or, you will miss the A2M board....:D
I think we will be floating here @ $14 for awhile longer. I hope to be proven wrong but with things escalating further and a large majority of investors on the Asx, I doubt the price will shift until A2M make an announcement.
This stock is the most violatile stock , you may never know the next day but just your own research into the business and workout the Sp. We and even the people on ASX won't determine the Sp but only the Insto's. At the moment , shaking and collect are happenning , and the shorters are at it worst so far since the news of new CEO. But I do trust in the board of A2M as I always do.
https://www.shortman.com.au/stock?q=a2m
11/DEC/2020
JARDEN RATES ATM AND MFT = OUT PERFORM
https://www.jarden.co.nz/assets/Inve...ember-2020.pdf
Interesting read.
I see they list ATM as one of their 15 'Quality Portfolio Constituents', with a weighting of 5.4%. Here's the whole list...
Ticker Weight Sector
ATM 5.4% Consumer Staples
FPH 6.9% Health Care
FRE 7.4% Industrials
GMT 7.3% Real Estate
KMD 6.3% Consumer Discretionary
MEL 7.3% Utilities
MFT 9.3% Industrials
OCA 6.9% Health Care
PCT 5.7% Real Estate
POT 6.9% Industrials
SAN 4.2% Consumer Staples
SCL 5.5% Consumer Staples
SKL 7.6% Industrials
SPG 6.2% Real Estate
SPK 7.1% Communication
100.0%
https://www.news.com.au/finance/busi...d333038cf5d576
Call to boycott not only China products but products & services of China owned companies in Australia.
A rather extensive list running into many billions of dollars.
Let’s see how China reacts to an attack on their companies in Oz.
BLACKROCK, INC!
Date this disclosure made: 11 December 2020
Date last disclosure made: 25 September 2018
One of the Insto's with classic shaking and collecting of 8 millions shares so far.
For this disclosure,—(a) total number held in class: 46,398,814(b) total in class: 742,606,937(c) total percentage held in class: 6.248%
For last disclosure,—(a) total number held in class: 38,298,101(b) total in class: 734,797,297(c) total percentage held in class: 5.212%
Tomm, very impressive !
"Let’s see how China reacts to an attack on their companies in Oz."
i was hoping the Kanga's would go to the beach this xmas after that not so nice summer last year...
And it was very windy here as the pressure of those fires sent winds this way...
Everyone needs to get some sun and relax... lucky we did not buy those bonds on offer the last 10 years in Hong Kong...
Looks like Kingfish have been selling quite a few A2 over the past few weeks
Gone from 13.6% of fund to 11% - must have sold about 1/2 mill shares