Good to clean out "chicken little" investors ("...sky is falling in, the sky is falling in...") for all the shares to be taken up by steady (logical), serious investors! ...feeling twitchy on another buy-up soon ;-)
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Just wanted to see how big his balls were. No doubt he will tell us when at what price he bought more shares at. As the shakeout has occurred, I await eagerly.
AGM should be good?
Mine? Not very big! LOL Still a learner although been watching and "playing" with little 16 years. . The legal battle has me cautious only coz others could run and make my 2.1 look real bad. Could bound away once the legal biffo goes "our" way! ...do you think?
ATM couldn't do much better than look at the rationales here, well put by several, for their legal argument IMHO ;-)
https://nzx.com/companies/ATM/announcements/288418
Challenger has increased their stake by another 7.5 mln shares, nice...
http://farmersweekly.co.nz/section/d...le-september-1
Happy Valley to set up new A2 milk plant in Waikato region @Otorohanga...
I wonder if we are going to hear about a new contract with a Waikato based IF producer at the November meeting, to ensure supply can meet the demand, and that this new plant is in response to increasing demand for a2 IF emanating from that region putting pressure on existing producers? Reading between the lines that announcement unintentionally mentioned a2 IF capability but in so doing suggested a possible announcement along those lines IMO.
Nice SP bounce back above 2.00.
They're a smart bunch the A2 team, aren't they? Making sure the supply is slowly but certainly beefed up to meet ever increasing demand. With SML in south island and this new facility in north island, they're making sure the logistics side is also addressed long with supply.
They had cash on hand of about $69m as at time of FY results time, pretty sure some it being pumped into further capacity investments either directly or indirectly.
I'm not sure that a2mc will be making any investment into capacity. Its not their business, as it is not with Synlait. The manufacturers will make their own decisions and invest their own capital to increase capacity based on demand. a2's $69 mio will be spent on increasing sales in their target market. That's my understanding anyway but happy to be corrected on that.
Fully agreed Harrie. It's not at all clear where the planned Otorohanga plant might fit into ATM's operations. There seems to be no corporate or shareholder link, nor any hint that the owners/operators have even had contact with ATM. The new group merely say the plant will have A2 capability as well as organic, which doesn't mean much. And they won't be in operation until well into 2018, by which time the dairy scene in the North Island will have further evolved. In my view, ATM needs to be well along the planning road now for starting up NI operations next year.
You're absolutely right that investing capital in new production facilities is not in line with ATM's deeply ingrained modus operandi. There will be other uses for the $69m cash on hand.
"A2 Milk could become a takeover target again: fund manager"
Headline of article from NBR behind pay wall, could someone summarise key points...(I know its illegal post entire article), thx.
Speculation that because Harbour Asset Management and Greenscape capital have both increased their ATM holdings since the last results announcement, that ATM is 'undervalued' and 'should feel vulnerable.'
However, it is noted that some ATM execs and Dirs have been selling down small portions of their stakes, e.g. Babidge who recently sold 1 mill shares.
So very much speculation at this stage. Could just be the fund managers pumping. Time will tell.
IMHO any SP decline below 1.90 represents a buying opportunity (disc holding and not recommending.)
Here's an update.....http://www.smh.com.au/business/consu...16-gri2js.html
Looks like the substantive case will not be held until Nov 2017.
Would a2mc succeed in slapping an injunction on Pura to stop it using the labelling a2mc is complaining about until the results of the hearing are known?
Seems to me that if a complaint is made where the public could be misled into believing a product is not wholly what its labelling is leading the public into thinking it is based on another brand, then the offending labelling should be removed until the court case has concluded.
Nice bounce in price today after lacklustre past few days...probably due to Chinese Daigous Expo over the weekend in Sydney and Melbourne and apparently they're scrambling for A2 products both Infact Formula and A2 Adult milk powder...
Hmmm...based on ASX closing price of 1.87 y'day it translates to $2 at .935 fx rate, bit an anomaly??
https://www.nbr.co.nz/article/wife-a...stake-b-195606
All in the family :)
Another vote of confidence.....
Summary for Challenger Limited (ACN 106 842 371) and its entities in Annexure3.
For this disclosure,—
- (a) total number held in class: 67,144,981
- (b) total in class: 725,620,065
- (c) total percentage held in class: 9.25%
For last disclosure,—
- (a) total number held in class: 59,855,519
- (b) total in class: 725,320,065
- (c) total percentage held in class: 8.25%
Followed by a loss of confidence?
https://www.nzx.com/companies/ATM/announcements/291401
Yep was more the fact that the infant formula market in China is now very competitive and experiencing discounting,according to the agm of Bega.
But ATM are a niche supplier of A2 formula so maybe not so much for them.
Agree with all that from Citi and what they project is contemporary with infant formula volume guidance from ATM's supplier in Mid Canterbury.
FY17 NZ$1.50 valuation from me, expect a drop on agm day when the market wakes up to all this and ATM issue guidance. Synlait will be a much better performer than ATM over the next 12 months I reckon.
It's not just Citi Couta respectfully, Synlait have issued very low growth guidance for infant formula which would have been based on ATM consultation, both SML and ATM assessment through their market analysts based in China, and no doubt through their respective direct communications with Chinese regulators.
Sometimes when emotionally invested in a stock it is hard to accept the reality of the situation, but as you say, over the very long term ATM should recover, the question is if you are invested in ATM at present is, are you prepared to wait up to two years for that recovery, and will this bull market have ended by then.
look at all the big insto sucked up by WYN....you would think with all their best analysts they would safe??? so sometimes I think share market is a luck......
For what it's worth, median target price of $2.22 from 5 analysts, 4 with hold and 1 with sell recommendation, so sell very much the underdog.
Not really, analysts adjust their positions and those of their high net worth clients before they release or update their price targets.
You need to consider this as a matter of factual analysis;
Analyst consensus is presently for $514m revenues in FY17 or around 45% yoy growth. To achieve that level of growth ATM would need to achieve around 75% growth in infant formula sales.
Synlait have already provided guidance such that infant formula growth will be around 12.5%.
That is an unsurmountable gap for ATM to overcome even at the most optimistic end of the spectrum.
Some analysts may update their valuations prior to the agm, most if not all will probably wait until ATM confirm their guidance which is almost certainly likely to be in line with that of Synlait, as the two companies consult and work closely behind the scenes on such matters.
In my opinion SML will perform much better than ATM over the next 12 months, and I've been rotating from ATM into SML over the last few weeks.
Hope won't make you rich Couta, dispassionate analysis will make you rich.
Trust this assists you and your thought processes, it’s never easy recognising the downside when you’ve held stocks for a long time, don’t ever let them become like your kids, they’re just assets to be bought or discarded.
Or......You could look at this scenario with a hint of optimism and a dash of logic (a touch of respect sure wouldn't hurt either).
Second half Revenue was $213.7M - therefore zero growth from 2nd half would equate to $427.4M annual revenue. A measly 20% growth basically gets us to you analysts consensus of $514 M (hardly an "unsurmountable gap").
Add to that a2 have multiple new distributers in China, growth in adult milk powder as a flow on from exposure from IF, increasing fresh milk sales, cashflow positive UK, NZ sales coming on board in 2017, a2 sales direct to chinese consumers growing rapidly (beasty margins) - and don't forget the 40% increase in babies being born in China at present (which one would assume accounts for the shortage of Stage 1 Platinum IF on the market at the moment).
So, I would say that even the analysts estimates are conservative and expect a share price well north of $2.22 by FY2017. Finally, in conclusion - "You need to consider this as a matter of factual analysis" and I "Trust this assists you and your thought processes" . lol
Ulterior motives such as trying to get a lower average buy price for the impending boom? See attached image (broker data) for Citi group's net accumulation of 840 000 shares at an average price of 1.87 only a couple days before issuing their Sell rating. Attachment 8422
Ha, ok Ginger, do consider though a couple of things, the Synlait 12.% IF growth guidance would place ATM with overall annual revenue growth of around about between 10 and 15%, so your 20% is probably very much actually on the optimistic side.
Secondly, there is also a chance of us actually seeing a drop in ATM IF revenues due to the pending regulatory changes in the first half of FY17, it is hard to imagine, I get that, but CVT just showed us that it can actually happen with the loss they just made when facing a very similar set of cross boarder regulatory changes.
We shall just have to sit tight and wait, one can do that risk free on the sidelines, or one can do that stressed holding ATM shares and riding it through come what may, each to their own really.
Sorry - are you saying 20% growths is overly optimistic for a company that has grown 125% + in the last FY? Check out their available sales data of late (alibaba, JD etc) - they are one of few IF companies growing in China since the last regs round, and at an impressive rate to boot. It's a VERY unique product that compliments Asian digestive issues rather well according to the studies.
Secondly, the regulations to come into effect in early 17 are already known at this point and will only increase visibility of a2 in China, and in turn boost sales. IMO The only factors that will limit ATMs growth in the coming year is production capability and a regulation that already exists, being the requirement to register any new processor with the Chinese authorities. Safety scare
Yes as we shall wait and see, in the meantime best of luck cycling your equity into SML. IMO it's a sure way to stunt your returns moving forward, but not a bad investment by any means.
It’s a matter of perspective, you said all they need to do is replicate 2H16 revenues, not once but twice, for 1H17 and 2H17, and then perform 20% better than that yet again for good measure.
Do stop and have a think about just how speculative that really is;
Those 2H16 revenues were achieved at the peak of the infant formula and grey market channel boom, and at a time when the regulatory headwinds were not yet in effect.
There are headwinds going forward now,
Companies like Danone are telling us that their infant formula sales to China through online and grey market channels are dropping, and ATM are way way more exposed to the grey channel than the likes of Danone.
Comvita, in the face of similar regulatory changes recently made a HY loss stating that was entirely due to those regulatory changes.
Synlait have provided guidance, it’s telling, and should not be ignored by investors.
If you run the math on that Synlait guidance in respect of ATM, it paints a forward revenue picture, with both 1H17 and 2H17 revenues below that of 2H16.
Let’s wait for the agm to see what that guidance is precisely, my only warning and recommendation to folks, is to shake off any influence from the ATM cult culture, focus on what’s real, and make the right decision, whatever that may be for you.
Thanks for asking, I did very well out of my three year investment in ATM and sold at $2.
I think ATM will remain a growth co over years to come, they have all the opportunity in the world to progress the a2 difference as the first mover and potentially market leader in years to come.
But things don't go in straight lines Ginger, and 2017 is likely to be one of those flatish years for ATM. Likely, being an aggregate of forward plausible risk outcomes, that's the best an investor can do and assess.
Cult culture, yes, you just have to look on hotcopper to see just how many folk go no further in investment thinking then "a2 is good" must then buy and hold, then it's faith, belief, hope, practically a religion for them based on very little attention to real analysis and with a myopic view of anything else including investment advice they should really be actually taking note of.
I think ATM could well correct post agm, I would genuinely like to be proven wrong though, it could even possibly correct for up to 12 months.
I expect SML will have a better year, most of their stars are aligning, I've rotated from ATM to SML now.
$112.50 Million Revenue Quaterly, if my math is right will be $450 million annually?
Yee ha go ATM.......SP doing well this week and now first quarter results indicating FY17 up 27% on FY16.
The investor presentation also does well explaining the A2 difference. https://nzx.com/files/attachments/247651.pdf
Well that number is for their quiet quarter where things go boringly normal....later on in the year when all fun starts with lots of online sales (like Chinese new year, Single day (11/11) coming up etc...).
My point being the FY17 will be at least close to $500mln.
I particularly love this bit from presentation:
-Continued and consistent growth in consumer demand for a2 Platinum® infant formula, in contrast to expectations of volatility in certain research reports
Would say a slap in the face for Citi for their recent downgrade....
Interesting part on the UK in the announcement, 50% pcp. Looks like the start of a growth curve to me. Wait, does pcp mean what I think it means? (percentage points?)?? Be great if the UK takes off, with 3x the population of Aus, would be a huge win for the company. UK reported break even last year so growth there now will add to the bottom line.
Although they may have some issues in China short term, I am liking their figures considering the importation issues which should be having huge headwinds. They haven't grown this quarter from last, but from memory this is their quietest quarter.
And the slap down to the downgrade reports was awesome! A2 are usually conservative with FY estimates, so reaffirming that they are still on target for growth is a big win. Read between the lines I say.
Excellent stuff.
Agree with you blobbles. Hope they will shed some more light at the AGM about HY numbers..
I think you said on another post that you bought some last week? Well done . Good timing. Im going to wait until it is over its last high point , and see what change i have in my pocket after the election . One more sleep to go ! GOD BLESS AMERICA ... and everyone else too.
Not really, I'd settle for flat to low growth though Ginger,
Lets see what guidance comes from the agm, based on the Q1 revenue at $112.5 we are probably looking at revenue guidance of around $450M, perhaps a less depending how much ATM discount for regulatory disruption as Synlait already have, vs $514 which is the present analyst consensus.
So, in my humble opinion, the market is generally still likely to be underwhelmed on agm day, despite today's presentation and all the good work ATM are doing.
We will need to wait and see if they can hit UK&US segment expectations given they fell well short of guidance at FY reporting achieving only 50% of expected revenues. The market has lost confidence a little in the US entry, esp because of the increase capital requirement also.
Still ATM could surprise and avoid some regulatory disruption, and if SML can somehow respond with short notice a2 orders, than both companies could potentially do quite well, especially SML which is well undervalued on the NZX at the moment but is due to list on the ASX before xmas, the ASX will just lap SML up I reckon.
And of course we have ATM's successful court action to look forward to in late 2017 :t_up:
My bet is a ATM win, (more than likely settled out of court before the hearing.)
Big difference in the close prices today, ATM should shoot to 2.14 tomorrow if it matches Aus price.
Unless Trump wins :(
Surprising that SML hasn't moved yet on the news also given that's where the infant formula comes from, they must be reconsidering their expectations also to the upside for FY17, a bit for a food chain lag perhaps, excusing all goods puns.
With respect, there has never been much correlation between ATM and SML as this chart shows. (Well since mid 2015 that is.)
Attachment 8441
Ah yeah, good point there Left Field, good effort with the chart too, we will just have to wait for it to show in the sml guidance I guess, not long now, few days perhaps.
http://www.stuff.co.nz/business/farm...t-formula-game
From the article...
"Recently, I asked an independent Shanghai-based market research CEO as to his impression of the success of the a2 Platinum brand over there. His response was four words: 'it is absolutely huge'.
It's agm day tomorrow, which way will the SP go ?
My bet is a dip on disappointing guidance, analysts are looking for $506m in revenues, my estimate is under $460m, but there may be enough in the commentary to attenuate some of that.
Wouldn't normally reply to cynics, but yes cycling from ATM into SML is the right call in my opinion as an investor and as a matter of four years of continual analytical research on these companies.
Perhaps you would like to offer and share your estimate for ATM's FY17 guidance.
No one has to do so including myself, but it's useful as an investor to compare notes with rational others who don't just by and sell based on belief, hope, hype, feel.
We may very well see the guidance provided by both co's come together over the next week as they are paddocks apart at present.
The ATM agm is today, SML agm is next Tuesday.
possible dividend payment coming end of financial year:t_up:
"4M17 EBITDA up 22.9% reflecting growth in infant formula sales".
Analyst estimates are presently for 60% EBITDA yoy, so ATM not meeting the market on that one thus far.
"4M17 Revenues $155.2M" implying $465M in annual revenues, not far from my estimate of $460M, but short of market expectations at $506M
Earnings to date look good though ay, $22M is a beat !
Why share price has gone up 7% if they missed the market expectation?
Assuming no growth from now. I am betting on ~10-20% growth through the year, so looking at ~510-540m FY17. I believe the first 3 months of this year are usually their slowest, so I think it will only get better from here. They also are always conservative and issue profit/revenue upgrades throughout the year. Never remember them issuing a downgrade...
22m earnings to date is fantastic. Looking like 100m earning full year IMO. Brilliant and sets them up for a potential 10c divi end of the year. Looking very attractive for dividend hounds.
Bit short of expectations?? haha - look at their 2H vs 1H revenues for the last 3 years - revenue growth in the second half always heavily exceeds the first. Now we have a poss divvy on the cards - i think your timing was terrible. Have you stopped to consider that a2's new agreement with Synlait could basically be taking over all of Synlait's capacity and then adding a further 12.5 growth?? A2 could significantly grow revenue while Synlait has modest growth. My revenue estimate - easily $510M. IMO somewhere closer to $530M.
Good presentation and meeting. Both David and Geoff are good at giving a clear, concise and well articulated message.
I was fortunate enough to go to the meeting last year and felt the same that day.
Great start today up 4% = .09 !!
Thoughts on AGM and Numbers:
- Watched the AGM thro' virtual link and it was great and well conducted.
- Chairman very inspiring with good sense of humour, so does Geoff CEO and rest of board very professional, positive and upbeat.
- As per numbers there were too many positives and very strong growth lines. Couple of key takeaways for me were,
- Sales for Jul-Sep period were 112.5 m from previous update and
Sales for Jul-Oct period were 155.2 m from y'day's AGM
It represents sales for Oct were 42.7 m, make what you out of that and not to mention what'll be for Nov if we include 11/11 or singles day sales ( would say at least 50m)
Based on these, I would be really surprised if they don't exceed $500m for full year.
- 4 additional new products launches planned for 2017 of which notable one is Adult Nutrition.
- All in all 5 start performance from company and for shareholders, couldn't have asked for anything more....
May see another upgrade in few months time once 6 months trading is completed.
Disc- Happy with original parcel from 58c range and topped y'day with another parcel before results were out at 209.
GLTAH :t_up:
Exactly what I figured out. On no growth from now revenue per month is 512m. Is a serious upside to this so could easily hit 550m with decent growth. At that rate 100m profit is not looking impossible for next FY. Likely Nov revenue figure is more like 50m with singles day...
I believe A2 only represents ~1% of infant formula market share for China last year too. Plenty of room for movement there...
Plus add in their new adult health products they are due to release, serious upside potential in the pipeline.
Plenty to like, can't see much negative. UK will make a profit this year, will be interesting to see how USA does. Pumping 20m into there is the only way to find out though!
What an outstanding NPAT result, congrats to all ATM holders
Up 6.5% thus far, lets see what the Aussies add this arvo.
Nice to see some volume going through today on Synlait too, SML agm on Tuesday.
Surely ATM is a prime takeover target for a larger dairy company exporting or looking to export formula to China.
Hello bottomfeeder, welcome to atm. sp is a bit lower than $2.55, but looks like it is heading in that direction:t_up:. As for take over, they had their chance at 50c, as I was telling customers in Countdown a year ago....Look here a2 milk,a nz company, healthier choice, and you can buy shares in a2 for only 50c, get in fast before someone else does:D.
If ATM was to pay a dividend at end of financial year, what would be your estimate dividend for the year. I will start by predicting 2c.;) Anyone else care to add.
Yep exactly right. I figure 90m profit, tax, plus others off 530m revenue. Lucrative business... they already have a decent pile of dosh in the bank to fund growth for a few years. Can't see why they would want to build it unless they are looking to buy businesses up or down the supply chain (unlikely IMO). Come on, give us (you and me seeweed!) long suffering sharehoders that stuck by the company from 50c days some relief!
I think it's likely they will want a good cash balance to do the value-add stuff (which may or may not involve taking a stake in other businesses like a cheese maker etc) so I'd say 2c is a safer bet.
I gotta better idea. Why not pay a 2c div every 3 months. It would keep the sp more stable and keep the sh happy. Then gradually move div up every 3 months in line with profit upgrades:). What do ya think bottomfeeder, start low and slowly raise the div every 3 months.
A good uplift in SP last year, and 10 months of consolidation. Now the SP passes its previous all time high, . Most shares continue up 10-20 % past their old high, with good annual growth results , and on expanding products .
It seems to me it is all the natural organic- sort-of-stuff going up. BLT. PIL. ATM .... THE WORLD IS WAKING UP TO "FUNCTIONAL MEDICINE" MAYBE?
Nice strong finish on the asx - record close if I remember correctly. Considering singles day wasn't included in the 4M figures and we are about to hit the typically high sales period - the half year report could see this puppy's sp knocking on the $3 door specially if the new adult nutritional products are well received.
Just sold half my ATM holding for 2.39 and made $37,800 profit:t_up:.
Great stuff! Your A2 odyssey has been good reading :cool:
Think its being rerated at this point of time, not sure where it consolidates this time around.
The fact that they made $22m NPAT for first four months has blown many punters away as to what lies ahead. And that not accounting for singles day (11/11) numbers.
One more positive upgrade soon will see this one soar to $3 quite easily. That's my take anyway, always pls DYOR.