I doubt the takeover theory. Geopolitics...... smart money intends to buy a company over 80% sales to China nowadays? Even Chinese money started back home since a year ago. Where is the buyer?
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A2 milk sp slid about 43% in 6 months and in the same period Feihe lost about 42%. Looks like it’s more than just china shutting down. Even in a “Protectionisitic”scenario, A2 would be struggling with lower child rates etc (just like feihe). Bottom line is to look beyond China and be innovative in the product offering and expand to new markets.
ill start with the technicals explanation to cover the a2 rally , you must remember it is still in a long term down trend.
a2 gapped down on the 10th may 21 to a new low and also became oversold during the following week. over the course of the last 2 mths it has rallied to fill that gap and became over brought around the 9th july.
on the risk front there are new risks just emerging this last week not the ones we already know about but the the recent action in china in regards to the education sector can be seen as a first step in the regulation to make having and raising children in china more affordable.
making infant formula a not for profit similar to education reform must be high on the agenda going forward to meet the goal of encouraging more births.
like carrom mentioned feihe is well down last few mths , not due to sales but could be up coming regulation of the sector.
China is showing its socialist colours ....which is more like old days and what CCP should have been doing all this while ...Look after the masses not let Rich become more rich and exploit the poor ...Doctrine of communism .
If it works well for the popularity ( I am sure it will be ...as there are always much more have-nots in any society so ....) then it can be long term declining story of China stock market and private companies ...." Not for Profit " This doctrine kills enterprises !!!
How it will effect ATM is not very clear but its over dependence on China will make it vulnerable
Hmmm... Another round of the Dragon breathing unwelcome warm air over parts of the World..USA (self appointed world police) and it's Allies (including NZ this time) respond by poking a stick at it and telling it to piss off..Dragon gets upset and breathes hotter air....The worry for investors is how hot is it going to get this time?
Imagine thinking social structure with two dominate "cranky"elephants (Super powers) in a room together with hundreds of minions..
Anyway back to ATM (a minion?)
A good article from Seeking Alpha titled China Wipeout.
Investors don't like reading possible scenarios like this "..While Beijing has tolerated conventional regulations on certain sectors in the past, the government now looks ready to kill whole companies or entire industries. One doesn't have to look far to the recent pulling of Ant Group's (NYSE:BABA) IPO or the DiDi Global (NYSE:DIDI) fiasco that shook the investing world earlier this month...."
Question is how regulation could effect the 100's of other overseas IF suppliers or the overall Chinese IF market.
But then regulation could include MANY OTHER products except iron-ore.
Just kicked the Minion out of my portfolio..Took a 10% loss.
Disc: sold out
:D...most definitely !!!! but with one proviso..I want to know 100% that its not going to fall to $3.50.:)
It's back on my watchlist..If it bounces up and holds price-wise anywhere from current price or above $5.50ish I may get excited..Might also get excited if I see a falling cat from a tall building
Yeah I sold out a while ago as well. Gave up hoping to recover my losses with ATM when didn't break through NZD $8 / 100 day EMA
Johnny the Horse, haven't heard an update from you in a while. What you posted a while ago still seems to be right on track. Do you still feel it is current and will play out this way. Or has recent China updates modified your view on this?
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