Very gloomy from Sinlait, I take more notice of that than the last Ten pages of waffle on this thread.
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Very gloomy from Sinlait, I take more notice of that than the last Ten pages of waffle on this thread.
Updated research from Morningstar.
Valuation: $16.30 Undervalued but there is time to purchase
A2 Milk Facing Near-Term Challenges, but Shares Offer Margin of Safety; FVE Maintained
Investment rating
While The A2 Milk Company's highest-growth days are behind it, we still expect solid future gains, with market share opportunities in Chinese infant formula, North American fresh milk, and other global dairy products supporting our outlook for 12.5% annual earnings per-share growth over the next decade.
And with minimal capital investment needs, A2 is set to enjoy stellar returns on invested capital and strong free cash flow.
We think the firm has carved out a narrow economic moat, owing to its brand intangible assets. However, the firm's future success relies mostly on developments in the Chinese infant formula market, where we estimate A2 generates more than 80% of its earnings through both direct sales and Australian third parties.
We expect the firm's market share to climb to about 17% by fiscal 2030 from more than 6% in fiscal 2019, although competition and increased marketing needs present near-term risks.
Unfortunately few people have foresight to conclude whether A2 is a great company or ordinary company. I reckon even A2 management don't know. So share investing always involves some degree of gambling. For A2, I am convinced Chinese people still like their products(otherwise why MBS revenue rise strongly?), thus I will give the management some time to fix the issues.
Disc.: currently not holding, but keen to enter
People looking for an alternative valuation UBS has released one earlier today, reduced TP from NZ$20.50 to NZ$17 buy
Massive 60m shorts still need to close and expecting this to bounce to NZ$15
Make your own mind up concerning.......... RISK - REWARD
$10 support in aus if it breaks new lows coming .... lets go boys
Serious question,
Does the ATM "A2 infant formula" product have any technology/secret formula etc are protected via IP regarding its infant formula that make it substantially better and a reason to buy vs. something like Karicare A2, Nestle A2 etc or any of the other branded A2 IF products?
Or is it just marketing/branding that their infant formula has as far as IP goes?