Regulatory risks overhanging any overseas firms doing business in China.
The authorities there at anytime can shave 50% off a company's earnings & share price by imposing punitive regulations - and there is no recourse.
Pay a PER of 30X F22 earnings for a company with high risk earnings?
Also begs the question why a multi-national like Nestle, already well represented in China with a full range of products, would want to takeover ATM in such a high risk market?
https://www.nzherald.co.nz/business/...DKTEAUPZLLDRE/
Paywalled
Excerpt : "China's dramatic regulatory crackdown is being closely followed by local fund managers amid speculation of possible flow-on effects to some Australasian businesses. Questions have been raised, for example, about whether China could potentially look at introducing price caps on the sale of premium infant formula manufactured by international companies. The speculation first surfaced after the State Council of China released new birth policy in July with a strong focus on reducing the costs of raising a child."
"China is not just doing this to spite international firms. They are doing this probably reluctantly to deal with growing social unrest driven by wealth inequality and the lack of affordability in education and health etc.
"The big shock and awe factor has probably largely played out but there will be incremental fine tuning and adjusting and certain sectors they continue to look at. So, for New Zealand businesses doing business up there it's a good reminder that the cost of capital and required return on investing in China has got to be higher because it is a high-risk destination."