You would think they discussed strategy with him prior to appointing him? Maybe they just discussed shares and car parking?
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Motley Fool update : A2 Milk Company Ltd
A2 Milk shares are liked by at least four brokers including UBS and Morgans.
The A2 Milk share price is down by around 45% over the last six months.
UBS believes that A2 Milk could benefit from a recovery of sales with infant formula as it reactivates its daigou channel over the next year and a half. The broker also thinks that company could achieve market share gains at Chinese mother and baby stores.
However, whilst there continues to be COVID-19 restrictions for international visitors, combined with disappointing export data, it’s likely that there will be weak infant formula sales for the time being.
A2 Milk itself has admitted to these problems. In the most recent update the company said that the disruption in the daigou channel, which represents a significant portion of the infant nutrition sales in the Australia and New Zealand business, was proving to be more significant and protracted than was previously anticipated.
One problem for the ASX share is that the daigou channel disruption is having a material impact on the cross border e-commerce channel (CBEC). A2 Milk says that the daigou channel plays an important role in stimulating demand across multiple sales channels, including CBEC.
A2 Milk said that it intends to strengthen its focus on reactivating the daigou channel in the second half of FY21.
On the mother and baby store (MBS) front in China, A2 Milk said that this remains very strong – it’s expecting to report revenue growth of 40% from this channel. The 12-month rolling market value share in MBS also continues to increase, it was 2.3% as at the end of October, with increases in both same store sales and the number of new stores in the first half.
Good breakdown of UBS write up
https://www.marketscreener.com/quote...IMIT-11384022/
Consensus recommendation from 9 brokers : Hold
Mean target price : $13.56 vs $10.97
23% upside potential vs potential 3rd downgrade - hmmmm
So what is it? Will atm keep growing? If so price is surely cheap? Or are recent downgrades indicative of no/low growth going forward but being blamed on covid.
Bunch of desperate holders looking for answers...
All u all want to hear is atm will head back to $20...with short position around 7percent...n increasing up....u all might wonder why the sp keep down...
All u want to hear is positive comments ..lol
Bought recently but will sell on Monday and reinvest into other stocks. Fonterra perhaps, which is on a growth path and upgrading forecasts
Be careful with that. The listed FSF that you can buy into is the upstream processing part of the company. A higher milk price might be good for farmers. But it is bad for FSF because they have to pay for their milk to process at 'market rates'. As a processor, you do not want your input costs to go up!
SNOOPY
The way many talk on this thread you’d think A2 is on its last legs and heading to the bankruptcy courts
No, you have me wrong.
I just wanted to get some extra insight from you regarding the pressure the daigou channel is presently under and how this is adversely impacting the CBEC channels. Also how these two factors are providing a solid narrative behind shorting and in addition why the new CEO will have his hands full and ultimately fail to bring the company and it's share price back to the overpriced, frothy heights seen just under 12 months ago.
Your insights are usually a lot more substantial and sharp and I genuinely urge you return to your own high standards as I have a hunger for quality analysis.
Aint that the truth, a good sign to be averaging in when the fear is almost palpable. Personally I don't really worry too much if it goes down or sideways for awhile, there's a few things the new CEO has to get fixed but that said they'll still be sitting on a cash mountain, making a truckload of revenue and profits.
Downside risk imho is minimal, upside risk is attractive at these prices. Happy to do the swings and roundabouts while things settle down, but haven't missed a re-entry and have some moola left over if SP goes lower.
Well master winner...all these people started....u can not even say anything bad about ATM.... people here is so on the moon with this stock..
As soon as someone post something that these holders don't like...they will attacked u hard.
People need to relax here....
N I am loving it when see all these people crying like a girl
King1212, Your talking like your either high or drunk. Is it English you are writing?
Certainly does not look like shorts increasing since 1st Feb but reducing by 10.77% course these run 4 days behind so be interesting to see if trend continues. Shortmans chart also shows a decrease in shorts. Maybe not all shorts believe result all bad. Course new Unknown CEO strategy may see a BB at these levels a positive and not long before we find out future plans. Everyone can play this game short or long ....your call !!
Latest UBS TP range $10 - $23.50 suggests everything already built in risk/reward low.
https://www.sharetrader.co.nz/image/...BJRU5ErkJggg==
Excerpt UBS "December data suggests A2M's daigou reactivation plan has started…
Our Buy rating is underpinned by a meaningful recovery in indirect IF sales via daigou channel in the next 18 months, plus substantial medium-term China infant formula (IF) share gains through MBS store rollout, and free trade zone expansion with associated CBEC activity. We believe A2M's plan to reactivate its daigou channel is logical, and centres on moderating English-label (A2 Platinum) supply to reduce in channel inventory, and support a China retail price recovery and lift online reseller margins. UBS Evidence Lab data suggests A2M has made its first step along this journey in December, which is consistent with peers seeing a lift in corporate daigou activity"
https://www.nzherald.co.nz/business/...DN3XAYI5D5IMY/
paywalled
What to expect this earnings season when NZX companies report next week?
"Allbon said stocks which were difficult to forecast at the moment were A2 Milk and the power companies.
He said A2 had already given guidance in December of its financials but it was more about how the company was going in rebooting its Daigou market."
No guts to make a call, no glory!
https://www.shortman.com.au/stock?q=A2M
Short coverings continue - providing short term price support.
Chart is looking promising, setup for the announce soon, with modest volumes showing a change in trend from pure down to a triple bottom on rising lows, albeit lower highs, undemanding indicators. A classic short term indecision wedge that will break up or down depending on where the results finish against revised guidance. It's all about the numbers now, chart says if you're in for a punt, now is a good time (with tight stops), if you're risk averse just wait.
glta
No they didn’t, as you know charts are hindsight but an insight into sentiment.
There’s no guarantee of anything, we all make our own calls. I’m happy to have a modest position here with reserves to leap into a good result, or wait until a good result.
You haven’t disclosed your position
Been there, done that and pleased I got out before the two downgrades.
Still believe that ATM is one of the great success stories of NZ so on my watch list. Not a believer in buying anything on the way down, especially with a potential third downgrade in the offing. Happy to invest on the way up and pay more if appropriate.
We posted some time ago on this thread a scientific report into how covid would slash birth rates. now evidence is emerging that reinforces the report
China population: tumbling regional birth rates signal scale of country’s ageing crisis
- Population data released by some Chinese provinces and cities has shown dramatic declines in the number of newborns in 2020 compared to a year earlier
https://www.scmp.com/economy/china-e...s-signal-scale
https://www.fool.com.au/2021/02/08/w...f-year-result/
"Finally, on the bottom line, Goldman expects this to lead to a 36.7% decline in underlying net profit after tax to $119.1 million.
Goldman Sachs will also be paying close attention to its guidance for the full year. The broker is forecasting revenue of NZ$1,478.7 million and EBITDA of NZ$393.9 million for the 12 months. This will be a 14.6% and 28.4% decline, respectively, year on year."
Guess all will be revealed on 25 Feb.
To be frank - analysts forecasts are in average not better than random (flip a coin) ... and the fool is in my experience not even one of the better coin flippers:);
But still - these forecasts don't look flash, and in the short term they might even be right ... there is no reason to assume the Daigou channel worked particularly well over the last half year ...
There was some encouraging information on the Daigou channel performance from the BUB's announcement (on ASX). It will be interesting to see whether ATM have a similar experience.
Attachment 12294
Mind that little word "Corporate" in "Corporate Daigou". This is not thousands of highly motivated students with a large Chinese selling network (their friends and families), but basically just another bunch of moving companies without particular interest in any product they are moving. The other thing to consider is - big percentage increases in volume might indicate a very small base ...
More important however - the bubs-news I found on corporate daigou is nearly one year old (published 26/2/2020): https://www.smh.com.au/business/comp...26-p544jv.html.
If you look for less aged information on corporate daigou, you will find less enthusiasm.
Anyway - I hope all goes well for A2M, but at this stage I won't hold my breath ...
To be fair, A2 Andy (corporate Daigou) is probably a bit more than just a moving company. At his peak even A2 admitted he was able to move 1000 pallets of A2 formula a month, and he definitely has an interest in the product he’s moving, I wonder how this volume compares with the retail Daigou (students, mothers , etc).
Did anyone notice new negative developments on the Fisheries front ,exports to China ...they have stopped exports from two facilities in NZ ...exact details not known but seems like some compliance issues
https://www.nzherald.co.nz/business/...K4EFHMWQQKZP4/
Behind paywall ...
The suspensions were due to issues around the interpretation of the World Health Organisation's Covid guidance and food safety management, said MPI deputy director-general policy and trade Julie Collins, in response to Herald inquiries.
Both sites had been recently subject to live video audits by Chinese Customs, she said.
Non paywalled version:
https://www.stuff.co.nz/business/124...ade-suspension
I think you need to ask what has changed since you invested in A2? Did you think it was a rocket ship to the moon as the $16-$17 range would suggest you purchased post Covid after the all time highs of $20+.
My reasons for investing haven't changed, and I stand by my own analysis that Covid19 (a one in one hundred year event) is the reason for the depressed share price. I'm actually still pleasantly surprised that the company is still highly profitable and generating significant revenue throughout this period.
Yes we may have to wait longer to achieve the returns we would like to see, but I don't think many here invested in the hope of making a quick buck.
I actually averaged to mid $19's, I always thought this is overpriced, at all the price points since $8 until it just kept going up, I caved and bought in thinking it'll keep going - "Hey I might believe this is overpriced, but the gravy train is at full speed ahead, let's hop on!".
Bbut then I realised I was right, it IS overpriced. It's just milk that can be replicated, the "but muh coca cola" argument is flawed, Coke has the secret formula to make it taste the way it does, whilst A2 milk is just milk... "But it has the A2 protein!" well, get some A2 cows into other countries and you can have your own A2 milk, just like they're doing with Zespri golden kiwifruits :t_up:
Daigou argument is flawed, if the product is that desired, they'll just buy at their local store, or T-mall etc. If you desired a piece of A5 Wagyu steak but you had to go across town to get it - you WILL go across town to get it instead of settling for some Aussie chuck steak, wouldn't you? Obviousy A2 is not as desireable as one would think, therefore even if the Daigou argument is valid (the Daigou channel is hindered), consumers must've been thinking "gee, I can't get A2 from my favourite daigou, oh look that's some Sanlu milk, I'll have that instead, it's the same anyway" - that just reinfornces the idea A2 milk is just milk - nothing special.
I'm sure there'll be both sides of the arguments, if you strongly believe A2 is the future, I wish all bag holders the best - I'm a bag holder as well and just as frustrated as you all are, we're all in this together, for both right and wrong reasons.
Yes, I put money on this and I made a HUGE mistake, I learned a lot - I just want to minimise the cost of this lesson as much as I could, that's all. This is the part where I regret getting on the roller coaster and wish to undo all the things I've done, but the roller coaster has just started and there's no platform in sight for me to safely get off.
There are so many things in that argument which are wrong, but your entitled to your own opinion, it seems regardless of anything I was to say, you’ve already made up your mind that investing in A2 was a HUGE mistake.
If you don’t think there is a platform to get off the roller coaster, perhaps just sell out now at a loss?
The Coca Cola argument has been thrashed to death, I’ve even posted about Fiji Water and other water brands which have made their owners millions, and believe it or not, it’s just bottled water.
Having children you’ll realise that it’s not often as simple as just changing formula brands at a whim, regardless of local alternatives.
You might be surprised to know that many local Chinese still don’t trust local brands, so there will always be a market for imported alternatives.
If you can get your hands on it at a local library, take a read of a book called “Devil in the milk”. Once I read that, I realised that the A2 milk journey is only just beginning. There is a reason that many of the major brands are now starting to introduce their own A2 products, further increasing the size of the overall A2 market.
I read your thoughts about ATM and the lesson u talking about ....I agree with u that a2 brand got tested for its strength and it didn't turn out to be as strong as we all thought it to be ...Can the company make it stronger ...yes they can over period of time if they are a quality marketing company .
Secondly for SP to move up we need more profits thus higher eps and on continuous basis so market sees some growth story ...that can also be achieved as market for A2 milk is expanding with more awareness and more products .
For me what has mainly changed for ATM is not just Covid exposing their weaknesses of distribution but also weakness of its a2 brand . After all like u say milk is a commodity only and all A2 only milks can be considered to be same to be distinguished by only brand strength . ATM will surely work on this and must be acknowledging this changed scenario in their board meetings
Hopefully being a good marketing company they will try to increase their revenues from naturally expanding pool out of awareness of the benefits of A2 only milk
If they can do that faster then overall growth of this A2 market then it will be considered job well done and SP will again reach high multiples , if they just grow with market or under that then SP will still rise with increased eps but multiples will be much lesser
So it all depends now on the marketing ability of this marketing company IMHO ....next 6-12 months will be important
I must have mis interpreted what he was saying about Daigou. After all the product has been available in over 20,000 stores in China, yet mothers still chose to purchase via Daigou.
That’s why we have seen a 40% increase in sales from the store network in China, because they are now buying it locally.
Daigou will just be the cream on top , if and when it eventually returns.
Losing money always hurts. The more you lose, the more it hurts and the pain of losing money is a much stronger emotion than the pleasure of winning money. Emotion makes for bad investment decisions. It's not advice but one strategy to minimise loss would be to take money off the table in steps. Some now, some in a few months or at a particular level. Plans are one way to avoid making decisions based on emotion.
Your last point doesn't make any sense and Akane actually provided the counter to this argument: If kids were so dependent on A2 and could not possibly change brands, then why has sales completely tanked? There are alternative channels other than daigou, so why has there been no uptick there? Last guidance, the director even advised that CBEC has under performed.
Like I've said before, the daigous have been deteriorating because class of 2020 students and 12month visa visitors have been leaving AUS/NZ towards the end of the year and no new student and visitors are coming in to replace them. These are the people who have the connections to the mainland china consumers. With tertiary enrollments wrapped up and uni about to start, I think we can be certain students are not coming back this semester. So ask yourself, what is the state of the daigous for the rest of the financial year?
some people have also previously pointed out that other brands have rolled out A2 protein IF as well, the milk from the various brands will be coming from the same share milkers as A2, so Akane is right in pointing out that there isnt anything inherently special about the product itself compared to it's competitors.
Thanks Rawz, sorry I couldn't worded it better - I'm a parent myself, I understand some infants/babies cannot just change milk formulas with a snap of your finger. If that is true, why not just buy from a retail store - which means the revenue should equal out? At the end of the day a sale is a sale in A2's eyes, it doesn't matter if it's through the Daigou channel or retail channel.
Sorry if I came across as brash - just very frustrated at myself for jumping into this without doing my own DD and listen to my own gut.
I've learned that I would rather miss the train, than jump on the wrong train and be stuck - FOMO is one hell of a drug :D
Sales haven’t evened out because of pantry stocking. Sales were artificially high during the early stages of Covid, and people over bought the product (the same could be said that the share price should never have got to prior peaks based on this peak in demand). In many cases these have a shelf life of up to 2 years. Pantry de stocking could still be happening.
I personally know people in China who purchased sufficient A2 tins early last year that they still haven’t used up their supply. I’m not sure how common this is.
Dont be too harsh on yourself ...All here have made many mistakes ...some have the courage to admit ...many dont ...
I have learnt ...." Sell and regret is better then not sell and regret " Conversely " Dont buy and regret is better then Buy and regret " Works well if u have doubt trying to sell some stock or buy some stock .
I still think U can minimise your losses here by being patient now ...IMHO
I also have no worries cutting a loss. Did so on ATM late last and also SAN mid last year once i noticed the downtrend. Redeployed funds which are performing much better.
One thing I did early this year is change my trusty old excel spreadsheet so that the main page has all my holdings, current price, some ratios and portfolio weighting. It excludes the gain or loss. That way I am just looking at the investment as it stands in that point in time. I've found I have been able to buy and sell freely without any emotion doing this.
All share investment has some risk.
At the moment we are making risk assessments in a vacuum based on incomplete info until the next scheduled ATM update due 25 Feb.
Always best to make your decisions based on firm fact than in a vacuum where rumours and speculation abound.
JMHO.
It depends ... I can imagine a number of scenarios where it would be better to be left on the ground ...
Not saying that ATM is such a scenario, but sometimes it feels that some of the posters here are too much emotionally involved. Bad investment strategy. ATM is just one stock out of many which may make us money or which may lose us money. Plenty other stocks with the same properties around as well.
Fear to miss a plane is a pure emotional problem, If you think about it - next day there will be another plane ... Emotion is the enemy of reason, and it is reason one needs to make good investment decisions.
Hottest thread, 999 page now. Hope page 1000 will start a new uptrend for ATM.
I'm probably somewhat emotionally involved, although have a very healthy diversified portfolio. My emotional involvement comes from the fact I actually believe in the A2 product, I've read all of the books and articles about it, so I consider it more than just an investment. I believe its also been very beneficial for my own health, and I consume the product. I personally don't just like to invest in companies because I think they can make me money, I prefer to invest in what I think is right also.
Diversification is good, nearly as good as A2 milk. As far as the latter is concerned I agree that it does make a difference for some people. However - it does not make any difference for them whether they get their A2 milk from the A2 milk company or from any other source of A2 milk.
We happen to drink A2 milk for decades supplied by the friendly beast outside of our door (our house cow). Used to be a Jersey Cross, now it is a Dexter / Jersey. No need to attach myself emotionally to the A2 company or any other milk supplier (though - I like our cow :p - she is a nice girl with character ...):
I only buy shares if I think that they are undervalued, and that, at the moment, I am not so sure about with ATM.
As far as an investment in A2 milk on the Nzx, there are a limited range of options. Are there other NZ publicly listed companies also producing an A2 product? Fonterra produce it on behalf of the A2 Milk Co in the anchor bottles, but I'm not aware of other companies publicly listed?
Or you could get a jersey cow and have it out your front door
https://florencegriswoldmuseum.org/c...chase-the-cow/
Quote BLACK PETER...."I only buy shares if I think that they are undervalued, and that, at the moment, I am not so sure about with ATM."
(off topic)
BP.... Do you by any chance have a list of those under valued cos? Lol
I scratch my head in wonderment that at this stage of the game, we are still reading about the merits of A2 milk vs conventional milk?
The A2 milk advantage was debated years ago and it became clear that while many harbour doubts (including Fonterra), the anecdotal evidence from Asian consumers (60% are lactose intolerant etc etc) was so convincing that A2 milk took off amongst the Asians, especially China - forming the basis for the rise and rise of ATM.
Other competitors have now joined the fray and the debate & discussion has shifted to impact of the competition, the double downgrades, ATM's strategic blunder in getting rid of Jayne (with hindsight) and where to from here.
But seems like we are back at square 1 - A2 vs A1 milk!
Simplistic summary of where A2M is at :
Bull case for A2M
https://www.raskmedia.com.au/2021/02...asxa2m-shares/
"Given international travel will resume, the positive growth of MBS stores, and increasing brand awareness, I believe the market has overreacted to a2 Milk’s recent earnings downgrade."
Bear case (but actually, a bull case in disguise)
https://www.raskmedia.com.au/2021/02...m-share-price/
"While I’m keeping an eye out for any of the aforementioned bear scenarios playing out, I think a lot of the downside is already priced into the a2 Milk share price.
As a result, I think today is a good entry point for investors."
https://www.shortman.com.au/stock?q=A2M
Meanwhile, shorters continue to cover (buy shares) but sp is slipping.
Interesting as it means that long termers are selling to shorters?
....ah cheers BP. Seems like we hold similar portfolios! 🤕
Apologies if someone already replied to this point, I'm just catching up on the thread. However, somebody needs to point out a basic flaw in your investment strategy, or an alternative at least...
You don't need to 'make your money back' on ATM. Going forward, you should consider ALL shares (indeed all investments) and constantly compare and rank them for best possible return.
If you don't expect a good bounce of the SP in ATM (it sounds like you don't) then sell now and invest in a share in which you are confident. Swings and roundabouts. Paper losses are irrelevant, unless considered for CGT reasons. At any given time, if your portfolio doesn't reflect your best guess for future gains, then you need to rebalance.
Say you own ATM at a loss, and expect it to be rangebound for the next few months (I don't), whilst thinking the commercial property sector is still lagging. Sell ATM, buy KPG or APL. Easy as.
As the saying goes, never get emotionally involved in a share, either on the way up, or the way down!
[Disc: My ATM position is presently under water, but I'm holding for the longer term and hoping for a bounce on news later this month.]
Yep I sold my ATM holding at $13,000 loss. Made back on OCA and PEB
china's feihe launches a2 milk variant and ever wonder why bubs isnt doing well , why feihe just launching goats milk one as well
https://www.nutraingredients-asia.co...patent-granted
Interesting development
This one from Yahoo Finance from 19 Jan. I'll leave the smarter minds amongst us to pick it to pieces...
A2 Milk Company's (NZSE:ATM) Intrinsic Value Is Potentially 95% Above Its Share Price
https://finance.yahoo.com/news/a2-mi...213610097.html
Well, says to me that the results announcement on 25 Feb is going to be a rather muted affair by the new CEO as he would want to have a really good handle on things (especially pertaining to competition issues) before providing an outlook comment.
If anything, one would expect him to play it safe and cautiously as he is going to own any outlook comments he makes in his first outing as CEO.
I’d be curious to know opinions from others, as to why shorters are running for the hills? Surely if they expect a mediocre HY and potentially revised FY guidance, wouldn’t it make sense to keep short positions open, or at least open new positions?
shorters are not running for the hills , if your got long term sellers or what ever , shorters can buy back into the volume with out the price racing upside due to there buying.
lock in some profits as maybe they think the downside is not as great now? doesnt mean the upside is better
you didnt understand they might be locking in profits without pushing the price up , just cause the short interest is falling means nothing except about risk/reward for the a2 proposition which was a trade from an overvalued company fundamentals. why would you maintain a massive short position in a company idf its not going bust. its a trade only short position
that’s a very odd explanation. Yes I understand they are locking in profits, but that makes absolutely no sense if they are convinced there is further downside. Based on comments here about competition etc, surely downside is a given.
Based on some of the comments on HC recently, and here, you could be mistaken for thinking the company is going bust, as though they have never dealt with competition before. Just seems the sentiment from shorters doesn’t match their actions.
You're not wrong, I dived head in first into ATM with the wrong mindset.
Luckily ATM is only one of my tranches, although it's the biggest one by a lot. It feels like ATM has singlehandedly undone all the work on the other shares, 3 steps forward, 3 steps back.
Going forward, I'm just waiting for a bit of a bounce - every little bit helps, then I'll exit and reinvest in other shares.
Thanks for your input, I'll take it onboard.