A2M - The A2 Milk Company

[aus_trader]

No crystal ball and I am being unfair on Knobby, lost count the times I have sold a stock to watch it take off (I am hopeless as an investor) a couple of beauties years ago sold CTX at $1.80 and WPL at $11 have a look at the charts perfect timing (loser )

Hey mate, me too. My timing is pretty bad in terms of calling the tops. Stocks usually go higher without me ! Same with calling the bottoms, usually goes much lower as if the rug is being pulled from underneath !
I was just trying to bring a bit of humour to the thread.

 

[aus_trader]

Better stuff around than A2M. It's fully priced.

The valuations for higher prices are not supported by the consensus either, similar to the Bell Potter report that Miner presented earlier.

But broker reports are a guide only, speculations on stock's future earnings etc can push prices to dizzying heights at times. It's good to lock in profits when stocks do that though because sooner or later reality will bite.

 

[Knobby22]

I wanted to sell it the day before but needed one more day to own it 12 months and get the 50% CGT discount.

 

[aus_trader]

I wanted to sell it the day before but needed one more day to own it 12 months and get the 50% CGT discount.

I never look at how long I have held a stock when it comes to selling, but if you can time it for the CGT discount it's worth it.

 

[Ann]

Looking at yesterdays close and the RSI which has speared into oversold it may be a good buying opportunity and it also hit the $13 support line, plus it is still above the 200dsma.

 

[notting]

That fall was due to an article in the fin review that said something about China getting a leg over it with their own stuff. I did not read the article to understand how valid it might be however -

I knew it was a raid.

 

[aus_trader]

That fall was due to an article in the fin review that said something about China getting a leg over it with their own stuff. I did not read the article to understand how valid it might be however -

View attachment 95349

I knew it was a raid.

They did it to APT too a while back. They must have special deals and commissions set up with either stock brokers to pick up stocks cheaply or with short-sellers to take a huge short term profit from the raid. 'Loot and repeat' seems to be their game. I have stopped listening to their articles ever since they seem to have lost their independence in reporting and have started going under the desks of Fundies and Brokers to get their promotions !

 

[notting]

They did it to APT too a while back. They must have special deals and commissions set up with either stock brokers to pick up stocks cheaply or with short-sellers to take a huge short term profit from the raid. 'Loot and repeat' seems to be their game. I have stopped listening to their articles ever since they seem to have lost their independence in reporting and have started going under the desks of Fundies and Brokers to get their promotions !

They were notorious for this before sky news business channel came along.
They seem to have gotten straight back into it as soon as that has gone off air.
No counter opinions in the public domain on the day. Ramp and trash after taking positions or wanting to!
They are dick heads

 

[bigdog]

A2M up today and chart displayed is 5 day week and SP approaching the all time high of $16.08

What does UBS know?

ASX Announcement yesterday reported UBS now substantial shareholder now 5.23%
9/07/2019 7:30:33 AM Becoming a substantial holder

Motley Fool reported today
https://www.fool.com.au/2019/07/10/why-the-a2-milk-company-share-price-rocketed-higher-today/

Why the a2 Milk Company share price rocketed higher today
James Mickleboro | July 10, 2019

The a2 Milk Company Ltd (ASX: A2M) share price has been amongst the best performers on the ASX 200 index this morning.

At the time of writing the fresh milk and infant formula company’s shares are up 5% to $15.20.

This latest gain means a2 Milk Company’s shares have rocketed 46% higher since the start of the year.

Why is the a2 Milk Company share price charging higher today?
Investors have been snapping up the company’s shares this morning after a2 Milk Company was the subject of a positive broker note out of UBS.

According to the note, UBS has upgraded a2 Milk Company’s shares from a neutral rating to buy with an increased price target of NZ$17.50 (A$16.68).

This equates to potential upside of almost 10% for its shares over the next 12 months even after factoring in today’s solid gain.

UBS is bullish on the company due to its strong position in the world’s largest infant milk formula market – China.

Whilst the broker does believe there are downside risks such as regulation and changes to e-commerce laws in China, it believes the company is well-placed to mitigate the risks and sees significant growth potential in the country given its premium and differentiated brand.

UBS isn’t the only broker that is positive on a2 Milk Company right now.

Goldman Sachs has added the company to its conviction buy list with a price target of A$17.40.

According to the note, its analysts believe the company’s shares are attractively priced given its long term growth potential. It expects a2 Milk to grow its earnings by a CAGR of 25% between FY 2019 and FY 2021.

912

 

[bigdog]

• A2M $15.840 +$0.060 +0.38% today at Fri 12 Jul 2019 10:37 AM (Sydney time)

Financial Review reported today

a2 Milk to grow out of baby formula
Patrick Durkin

a2 Milk chief Jayne Hrdlicka faces one of the toughest jobs in corporate Australia. Shares in the dairy company may have jumped almost 25-fold in the past three years, but a2 is seen by many as a one-trick pony.

The vulnerable side of a2 was on full display last month when China announced plans to become 60 per cent self-sufficient in the $US22 billion ($31 billion) infant formula market, wiping more than $1 billion from the high-performing stock.

The shares have since recovered but the incident underpinned the need for Hrdlicka to grow a2 beyond supplying infant formula to China.

In an exclusive interview with BOSS published in The Australia Financial Review today, Hrdlicka maps out a three-point plan to expand the business both geographically and by product lines.

“Our priorities are firstly our core products in our core markets: milk, powdered milk and infant formula,” she says indicating the ambition to reach full potential in the two biggest consumer markets the US and China. “The second priority is new products in the core markets with our core consumers.”

An example is a2’s Smart Nutrition, a protein-based drink built on a2 fresh milk with added vitamins and minerals, being launched in Australia and China. “Our third priority is new markets,’’ Ms Hrdlicka reveals pointing to the appeal of the brand in Asia. ‘‘There are definitely opportunities to go after new markets, and how and when we do that is entirely dependent on how we go in scaling up to do one and two. We would likely focus in the region [other Asian markets].”

INSIDE TODAY

The Tennis Australia president is currently in London for Wimbledon with her 87-year-old father, who defected to the US from Czechoslovakia when he was 16, and has been a major influence on her life and career.

Ms Hrdlicka was appointed to a2 last year after the three men who masterminded a2’s rise, Cliff Cook, Geoff Babidge and Peter Nathan, sought to lift the top 100 company beyond its $10 billion market cap. Today the company is worth $11.6 billion.

The health benefits of a2 remain controversial with milk free of the A1 beta-casein protein said to be easier to digest and absorb and reduces the risk of diabetes, heart disease and digestive problems.

However the Chinese have flocked to the premium luxury brand, which has captured more than 6 per cent of the market. UBS predicts a2 could capture more than 10 per cent by 2025.

Analysts have high expectations for a strong financial year result in August with UBS upgrading its ‘‘neutral’’ recommendation to ‘‘buy’’ on Wednesday, sending the shares up by more than 5 per cent.

The shares are now heading back towards $16 and are up more than 50 per cent for the year.

‘‘A2 Milk is in a unique position in that it has a differentiated, premium brand that is well regarded, yet under penetrated [in China],’’ the UBS note said.

Morgans’ Belinda Moore says it’s been one of the ASX’s ‘‘best organic growth stories’’. ‘‘But they have been printing cash so the question is what can they do to utilise their balance sheet strength.’’

 

[bigdog]

A2M hit all time high of $16.27 today

Motley reported yesterday
https://www.fool.com.au/2019/07/18/why-the-a2-milk-company-ltd-share-price-is-at-a-record-high/

Why the a2 Milk Company Ltd share price is at a record high
Tom Richardson | July 18, 2019

The a2 Milk Company Ltd (ASX: A2M) share price hit a record high of $16.09 in trade today and could have further to rise if analysts at Goldman Sachs and UBS are on the money in handing out 12-month share price targets even higher than today’s.

I also made a2 Milk my top stock to buy in July when it changed hands for $13.86 and not for nothing either.

The stock looked good value back then given it continues to boast very strong growth rates with an outlook supported by its success in China, Australia and the US.

a2’s core business is the sale of infant informula with it reporting 42% revenue growth for the nine months to March 31 2019 with a forecast for EBITDA margins to stay in the range of 31% to 32%. These are some impressive numbers given the business is reinvesting heavily in sales and marketing expenses to grow in large markets like China and the U.S.

a2 also has a strong balance sheet with no debt and NZ$288 million cash on hand, as such I expect management will one day in the future start to pay a dividend or potentially even buy back shares on issue.

Its return on equity is also high at 37.5% in FY 2019 and 35.2% in FY 2018. Generally when you can find assets this profitable and growing at strong rates shares are likely to get bid up higher over time in my opinion.

While most investor attention on a2 is understandably focused on the high-growth, but unpredictable China market, I also think over the longer term it has an excellent opportunity to grow sales of its supermarket milk in the US.

As at January 2019 it was being distributed via 12,000 stores including at leading chains such as Walmart, Safeway and Costco. If this business takes off I expect the market will once again be eager to bid the shares higher.

Overall for anyone looking to play the rising Chinese consumer theme I think a2 Milk is definitely the best stock to own.

However, of course investors must remember that as a highly-valued growth stock it has considerable downside risk if it doesn’t deliver on investors’ great expectations.

 

[bigdog]

New Zealand press article yesterday

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12251789

a2 Milk hits record high after favourable broker reports, study
22 Jul, 2019 5:46pm

A2 Milk share's share price hit a record high on the NZX today as the company benefited from favourable academic and broker reports.

The stock closed at $17.13, up 28 cents from Friday's close, and the stock's highest ever point.

Harbour Asset Management senior research analyst Oyvinn Rimer said the stock appeared to be benefiting from bullish reports in the lead up to its annual result next month.

In one of them, a study funded by a2 Milk and published in the Journal of Paediatric Gastroenterology and Nutrition looked into milk intolerance among Chinese preschool children concluded that a2 Milk was beneficial.

The study was carried out in 2016 and published this month.

"Replacing conventional milk with A2 milk reduced gastrointestinal symptoms associated with milk intolerance in Chinese preschool children, with corresponding improvements in aspects of cognitive performance," the report said.

A2 milk carries just the a2 beta protein, unlike standard milk, which has both the a1 and a2 beta protein.

Another report from Australian broking house Morgans released research that a2 milk was continuing to gain market share.

A third report carried on Bloomberg said prices for a2 Milk's Australian labelled a2 formula had firmed in recent weeks.

It also said there had been no discernible impact arising from the tightening of rules surrounding the unofficial "daigoui" trade into China - which remains an important part of a2 Milk's business model. "Out of all the three reports today, all of them are incrementally positive," Rimer told the Herald.

 

[Miner]

While A2M is ramped up by Motley Fool and some brokers, and well supported by the market, the research from BP however differs. It has declared A2M as a sell with a target price $12 around.
DNH

 

[bigdog]

2019 Full Year results reporting scheduled for Wednesday August 21 2019

https://insidefmcg.com.au/2019/08/13/jd-strengthens-partnership-with-a2-milk/

JD strengthens partnership with a2 Milk
August 13, 2019
Ruth Hogan

Chinese e-commerce company JD has expanded its strategic partnership with The a2 Milk Company, providing a welcome boost to the ANZ dairy giant in the wake of China’s plans to increase local formula output and reduce reliance on imports.

JD Worldwide said it will help a2 Milk to bring more high-quality dairy products to the Chinese market through tailored marketing campaigns both online and offline.

China is a top priority market for a2 Milk, with many Chinese parents turning to the company’s milk formula, which is designed to be easier for children to digest.

In June, the Chinese government revealed plans to exceed 60 per cent self-sufficiency for baby formula and improve the quality of domestic brands, a move which could harm Australian formula companies in the market.

The a2 Milk Company introduced its products to Chinese consumers through JD Worldwide in 2015, and has had an impressive track record with the e-commerce giant to date.

During this year’s “6.18” sales festival, a2 Milk was the top-selling brand on JD Worldwide on peak day, June 18, and its platinum baby milk powder was the best-selling product. Sales of a2 products on this day increased 210 per cent compared to the previous year.

As a participant in JD.com’s “Brand Competitiveness Plan,” a2 Milk was provided marketing solutions to increase sales performance and build up brand recognition.

The milk company received guidance on marketing campaign timing, choice of promotional channels, and help in identifying the target audience for a campaign.

JD helped identify customers who had indicated interest in a2 products but had not yet made a purchase and sent coupons to this high potential group.

The ROI of coupons during the month of the campaign was 3.6 times higher than the typical average, according to JD.com and fans of the a2 Milk online store on JD Worldwide surpassed 1 million users.

“China is the top growth market for The a2 Milk Company, and JD.com’s expertise in innovative marketing has consistently allowed us to make the most of this exciting opportunity,” said Xiao Li, CEO of a2 Greater China.

“Last year, we launched blockchain partnership with JD, using a QR code on a2 Milk products to show logistics information at every stage of delivery. This is just one of the ways we are working together to give customers more peace of mind and confidence in their purchases.”

Products from Australia and New Zealand have a reputation for safety and quality, and consistently sell well on the site, according to JD.com. Health supplements, maternal and baby products, wine, milk and cosmetics are among the best-selling categories.

“The a2 Milk Company’s premium dairy products are an increasingly popular choice for Chinese parents across the country,” said Chris Cui, Head of JD Worldwide.

“As China’s largest retailer, JD has unique capabilities to offer a2 Milk assistance in terms of marketing solutions, logistics and technology, helping a2 continue to grow their market share.”

In addition to a2 Milk, popular brands including Swisse, Blackmores, Devondale, Penfolds and Jacob’s Creek have also seen impressive growth in sales on the JD platform, with sales of Penfolds products increasing by more than 200 per cent year-on-year during first 30 minutes on June 18.

 

[bigdog]

ASX Announcements today
21/08/2019 7:30 AM Results Commentary FY19 (file uploaded below)

The NZ market did not like today's report and currently trading down $NZ 2.47at 10:45 NZ time (delayed)

1All figures are in New Zealand Dollars (NZ$) unless otherwise stated.
2All comparisons are with the 12months ended 30 June 2018 (FY18), unless otherwise stat


Morgans expects the infant formula and fresh milk company to deliver a stronger than expected result. The broker expects EBITDA of NZ $431.3 million, which is higher than the market consensus of NZ$420.6 million.

Reported lower EBITDA of $413.6 million –up 46.1%

The NZ market did not like today's report and currently trading down $NZ 2.47at 10:45 NZ time (delayed)

053

 

[bigdog]

A2M is doing very poorly today

Did have low earlier of $13.20 which was down $2.80

28,877 trades on ASX $139 million at 11:52 am

Is anyone buying?

 

[Tyler Durden]

Very surprised with the drop today. I only had a quick look, but nothing negative stood out for me from the report. If I was brave I would have bought more today.

 

[sptrawler]

Very surprised with the drop today. I only had a quick look, but nothing negative stood out for me from the report. If I was brave I would have bought more today.

It certainly has been a strong performer, has any independent studies been carried out, to confirm the health claims A2 makes?
https://www.abc.net.au/news/science/2018-06-19/dr-karl-a1-vs-a2-milk/9879800
Some are probably questioning the price difference compared to perceived benefits, as things are getting tighter in the economy.
Also they are at a PE of 50, which obviously has a lot of growth factored in.
Just my opinion, I don't hold A2M

 

[Knobby22]

Great company but priced for perfection.

 

[Miner]

Another astonishing research note from Bell Potter declaring A2 M - SELL price prediction was $12.25 when it was $13.4 (cents omitted for illustration purpose) - dated 3rd Sept.
The today share price is $14.4 - When we get a garland of shoes to such expert doomsayers or was it deliberate to divert public attention to enable their key clients to make money?
.
Shares
Code Last $+/- % Chg Bid Offer Open High Low Volume Options Warrants & Structured Products Chart Status Announcements
A2M * 14.400

0.220 1.55% 14.400 14.480 14.400 14.560 14.320 2,851,206