A2M - The A2 Milk Company

[peter2]

Possible class action. Unfortunately or luckily for some, incompetence is not a criminal offence.

I notice a few people are getting excited over the news that China is allowing families to have a third child. This means the potential market for baby formula and infant products will get bigger. However the big problem for Aussie companies is getting their products into China. A2M and others relied on the diagou trade which was cutoff when the international borders were clamped shut.

It's not worth buying into these companies until they solve the problem of getting their products into China in significant volume.

 

[bsnews]

Possible class action. Unfortunately or luckily for some, incompetence is not a criminal offence.

I notice a few people are getting excited over the news that China is allowing families to have a third child. This means the potential market for baby formula and infant products will get bigger. However the big problem for Aussie companies is getting their products into China. A2M and others relied on the diagou trade which was cutoff when the international borders were clamped shut.

It's not worth buying into these companies until they solve the problem of getting their products into China in significant volume.

The announcement of being allowed to have 2 children had no impact at all so allowing a third will also I foresee have no impact.
As they look to have a family that they can support with higher education being very important.
China do not look to be easing off the restrictions on Australia any time soon or for the foreseeable future.

 

[over9k]

The announcement of being allowed to have 2 children had no impact at all so allowing a third will also I foresee have no impact.
As they look to have a family that they can support with higher education being very important.
China do not look to be easing off the restrictions on Australia any time soon or for the foreseeable future.

Don't be so sure of that. Their economic hand might soon be forced.

They had to run rolling blackouts because of the coal import ban. As you can imagine, such actions tend to upset the general public, which just gives them massive internal pressure as well. People tend to get together & go on long walks when they can't put food on the table.

As the saying goes, society is only ever one missed meal away from a revolution.

 

[Miner]

@loverat
You may be interested in reading up on related stocks, such as;
SM1 (Sylait Milk)
BUB (Bubs)

Posted this in Bubs thread recently.


As for a broker, I can recommend Selfwealth (as a reputable business) as I use them myself for $9.50 fee per trade of ANY value, and the shares are owned by you, not the broker.

We don't provide advice here on ASF, but for what it's worth, I have considered starting a thread recently based on the milk stocks being at price lows.

Maybe others can post their opinions on where we are at regarding the "sitch" overall on milk stocks.

A2M has been a bit of a market darling recently historically.

Good luck in whatever you decide to do, and remember, none of this is advice.

Cheers.

I tried to enrol with Selfwealth but got nervous when they asked to provide them a POA (power of attorney). It was weird Commsec has never asked for it. Why Selfwealth asks? They said not to worry but it is playing a blind for me.
What is your experience in dealing with the POA to Self wealth. Should I be panicked or cautious?

 

[frugal.rock]

What is your experience in dealing with the POA to Self wealth. Should I be panicked or cautious?

I wasn't concerned.
I believe the term may be "qualified" POA meaning they can only act on some matters pertaining specifically to your shares, as required by law.
It doesn't give them a blanket POA. If they did anything against your best interests, it would be against the POA.
They are only allowed to act for your benefit.
You would have signed something similar for Bomsecc, just it probably wasn't labelled as a POA but authorisation to blah blah.
Nothingvto worry about Miner.
Cheers

 

[galumay]

I looked at self wealth a while ago, I didn't like how it was structured and some of the forms they wanted completed, the POA being one of them. Commsec is much more straightforward, probably because the structure is a lot simpler.

 

[Austwide]

A2M maybe has bottomed and is crawling back up, no idea why

 

[qldfrog]

A2M maybe has bottomed and is crawling back up, no idea why

One strategy i heard of: get the dogs of last yearwhich are still financially sound.
Better than main indexes expected returns using that...
A2M was a dog last year, wasn't it, so maybe some are getting back for that reason?
Tempting..even if the CCP is still in control so China market a bit so so..

 

[BossMan.]

Hey,

I'm new here so apologies if I am posting in the wrong area. Just wondering what you guys are thinking about A2M and its long term viability? I personally think it looks alright as a long term selection however am curious to know what the opinions you guys have?

Apologies if this is formatted or structured wrong as this is my first time on the forum, or if im in the wrong section.

 

[galumay]

Welcome BossMan, probably better to post this in the specific A2M thread, maybe @Joe Blow can move it for you?

When its moved, maybe share some of your analysis and research that leads you to think A2M might be a good investment at current prices?

 

[BossMan.]

Hey,

I'm new here so apologies if I am posting in the wrong area. Just wondering what you guys are thinking about A2M and its long term viability? I personally think it looks alright as a long term selection however am curious to know what the opinions you guys have?

Apologies if this is formatted or structured wrong as this is my first time on the forum, or if im in the wrong section.

My primary reasoning is the change to the child policy in recent months in China and with the hope that once Australia exits its phase of hard lockdowns the daigou channel will be able to further open up allowing further sales to the Asia/China region to reach there prior levels. Those are the primary reasons I have been looking at the A2M company specifically in relation to its baby formula product. I haven't read much of whats above so apologies if people have already covered this.

 

[aus_trader]

My primary reasoning is the change to the child policy in recent months in China and with the hope that once Australia exits its phase of hard lockdowns the daigou channel will be able to further open up allowing further sales to the Asia/China region to reach there prior levels. Those are the primary reasons I have been looking at the A2M company specifically in relation to its baby formula product. I haven't read much of whats above so apologies if people have already covered this.

There could be some further headwinds according to the company forecast, but the share price has fallen a lot to reflect the current reduction in revenue/profit and this uncertainty, just my 2c. So I guess a lot of the downside is probably baked into the current share price.

 

[BossMan.]

There could be some further headwinds according to the company forecast, but the share price has fallen a lot to reflect the current reduction in revenue/profit and this uncertainty, just my 2c. So I guess a lot of the downside is probably baked into the current share price.

View attachment 128592

Yeah, I am interested in there change of strategy the 26th when the annual results will be interesting to see if they hit their adjusted targets or not. Also there advance in to the USA / Canadian market and what the general acceptance of the company has been like in the region. Definitely will be a company I keep a close eye on over the next couple of weeks. Seems to be holding fairly strong at the $6-7 range but only time will tell and the announcements coming this week.

 

[galumay]

I realise my processes and strategies are very different to most other investors, but just to add something to consider, one of the reasons I wouldn't invest in A2M is that a question I always ask myself is "Why will this business still be round in 10 years" (or to invert, what could cause this business to cease to exist in the next 10 years.).

A company selling a brand of undifferentiated commodity, like A2 milk, has at least a significant probability of not being around in 10 years.

 

[aus_trader]

I think the world has realised it's not pouring Gold or putting Gold powder in the infant formula, so the price has come back to earth from sky high valuations. But I wonder if there is actually a good business in there once you strip the excitement and growth stock valuation out of the share price. The A2 protein has made it possible for quite a few people to be able to consume milk/milk products again.

But may be worth keeping an eye on as @BossMan. said as the company is trying to adopt to the change in trading conditions and perhaps there is some growth that's yet to be had in the US/Canadian markets and possibly a revival in China.

 

[BossMan.]

Strong signs with A2M, if Nestle acquire them following the announcements on the 26th, the effect on the stock price is already seen and it doesn't seem to be slowing down will definitely be interesting to watch.

 

[Knobby22]

Strong signs with A2M, if Nestle acquire them following the announcements on the 26th, the effect on the stock price is already seen and it doesn't seem to be slowing down will definitely be interesting to watch.

They do seem a little cheap at present if things are going back to normal.
The Daegu still exist and volumes have started rising again, profits will too. Covid is reaching endgame and it is essentially a NZ company, not Australian so less on the China radar. I think they will rise a bit from here but not up to the ridiculous heights the shares previously got to. This year eps will be 12.5c a share, the forecast for the coming year is 25c a share, they used to be 40c a share. For me maybe $7.50 is the future.
Not really tempted.

 

[BossMan.]

If they win there second attempt at the lawsuit with nestle in relation to there baby formula product, A2M could have a majority of the baby formula market within China?

Which could possibly put Nestle in a position where they would have to acquire A2M to trade there current baby formulas internationally of course this is only if A2M wins. I could of also miss read the lawsuit.

 

[BossMan.]

Annual Report tomorrow ??

 

[Miner]

A2M - my pick for CY 2022.
I think in the next 12 months, the bad days of A2M will be over.
this is the dark patch on A2M - https://cdn-api.markitdigital.com/a...access_token=83ff96335c2d45a094df02a206a39ff4. It is either head or tells a story. Should the court decides in favor of A2M then the market will be riding high.
This is also not an encouraging lead from Goldman

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02463156-2A1344155?access_token=83ff96335c2d45a094df02a206a39ff4

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02464027-2A1344578?access_token=83ff96335c2d45a094df02a206a39ff4

But that is what tipping should do - the unbelievable result
Having said that, the AI prediction is absolutely unbelievable shocking. But I lose nothing on paper loss so purely from a gambling perspective, putting my money on A2 M on the tipping game