ATM - A2 Milk Corporation Limited [Archive] - Page 12

MAC

24-02-2015, 04:11 PM

I am hoping/dreaming that a big growth in A2 Platinum sales into Australia will reduce some of the negative (for us NZ$ holders) effect of the NZD/AUD FX rate.

What will be really quite interesting will be the extent to which the enormous drop in farm gate milk prices boosts margins, it will depend on what ratio of supply is fix contracted.

a2mc haven’t historically told us, as far as I’m aware, how much supply is contracted at a fixed rate and how much is procured direct at a market rate.

Potentially this may well more than offset any movements in Fx which has not been as great for this particular reporting period, at only 4.5% by aggregate calculation.

Analyst price targets have not altered leading up to the report, usually a good sign.

IMO it would take an absolutely appalling report tomorrow to justify the 47% drop in SP from 96c.

Good luck to shareholders and all those looking to enter on this dip.

NT001

24-02-2015, 04:58 PM

Question for you NT.

In your opinion would you consider that camel, sheep, buffalo milk etc would be more effective/potent in ameliorating diabetes, autism, cholesterol, Irritable Bowel Syndrome, Crohn’s disease, hepatitis and leaky gut etc, than a2 milk?

Off the cuff, no, logic says A2 milk would do the trick just as well. But if a medical specialist said you actually need a bit of extra nutrition and are at a suitable location, one or two of the other milks might come into the picture.

Incidentally, the cholesterol theory has pretty much gone down the tubes now. Latest thinking is it was basically propounded by Big Pharma as a fraudulent pretext for selling billions of dollars worth of statins. The facts have actually been out there for years, and I refused statins when advised to take them because I knew they were a hoax. A book called The Great Choleterol Con by Dr Malcolm Kendrick has been on the market for years (my copy is dated 2007). Kendrick is a British GP who is a bit like A2's Prof Woodford - he got suspicious, boned up on the whole topic and then wrote the book which he threw at Big Pharma. If you're on statins, consult your GP, and if he/she doesn't know about the change of view, tell him or her to get up to date.

I'm also not sure that A2 would ameliorate leaky gut, it just ameliorates the conditions that are due to leaky gut.

Ginger_steps_

24-02-2015, 05:00 PM

I am hoping/dreaming that a big growth in A2 Platinum sales into Australia will reduce some of the negative (for us NZ$ holders) effect of the NZD/AUD FX rate. of the 4 supermarkets i visit on a regular basis a2 formula seems to hardly move at all - single tin shelf space (where milk has gained a few rows), the shelf space for formula is also at knee height... Hopefully thats not representative of the wider sales. Good luck holders!

babymonster

24-02-2015, 05:16 PM

again dumping at the end of the day.. Sp back to 51c

sb9

24-02-2015, 05:24 PM

Yep, that's correct. Interesting to see the sellers are at 53c now....it'll all be clear come tmrw morning...

see weed

24-02-2015, 05:27 PM

again dumping at the end of the day.. Sp back to 51c

Good aye. Had order in at 52c but changed it to 51c at 4.58pm. and saved myself $190. Looking forward to results tomorrow:t_up:. Go cow go and don't worry about the udder ones.

Harrie

24-02-2015, 10:39 PM

Trick question? Camel, sheep, buffalo milk etc is a2 milk!

SNOOPY

Yes, I assumed that everyone knew that camel, sheep, buffalo etc is a2.
Was attempting to draw out whether any of those milks had better outcomes in respect of autism, digestion, crohns etc, than cows a2.
Sorry if that was a bit unclear. NT has answered it anyway.

see weed

24-02-2015, 11:06 PM

NT001

24-02-2015, 11:55 PM

They were reporting 38% growth in Australia not long ago, hopefully that has held and we can add in fresh milk sales to China and (I expect) decent growth in UK. Wouldn't expect much from the US yet, if they ever sign with one of the big supermarkets there... that will be buy time for sure. At the moment US is probably not even off the ground. Good news from UK/China/Aus and I expect some northward momentum.

I am sure there will be some progress to report from the UK and China, but also from the US - perhaps not sales yet although this is scheduled to come very soon, but setup.

I read somewhere that one of the chains that a2MC is doing business with in the UK has a big health-focused network of outlets in California, the main initial target market.

Colorado looks like being named as the managerial hub with executive and marketing people based there. But I would surmise that the packaging would not be done there - it's some distance from California and not a major dairying state, but a good location for reaching into other parts of the US. I would think the packaging might be done in California itself, which is the biggest dairying state in the US despite the cost of land there. Idaho, Arizona and Utah are also among the big ones not far away, with known A2 farms operating.

Should be an interesting day, and I think the board will be wanting to make sure it's a positive one for the SP.

blobbles

25-02-2015, 08:38 AM

Holy moly. Half year out and $75m revenue! 38% increase in revenue compared to last year. Backing up the 2016 full year revenue guidance of $230m.

In my books, a damn good result. Revenue growth is accelerating, EBITDA of $14m in Aus/NZ. NZ business also going well thanks to see weed in the supermarket isles. :-)

https://nzx.com/companies/ATM/announcements/261068

babymonster

25-02-2015, 08:38 AM

profit.........!!!!!!!!!

see weed

25-02-2015, 08:43 AM

ASB are having trouble at showing results. Do they have 20min delay?

MAC

25-02-2015, 08:44 AM

Joshuatree

25-02-2015, 08:47 AM

And lodgement of ASX listing. Some great years ahead if projections proceed to plan.

blobbles

25-02-2015, 09:07 AM

Some insightful and interesting commentary in the CEO's report, recommended reading for all who are interested:

https://nzx.com/files/attachments/208646.pdf

babymonster

25-02-2015, 09:14 AM

let's hope the market will do what it should be doing... upward...

babymonster

25-02-2015, 09:21 AM

"The a2 Milk Company Limited (a2MC or Company) has today lodged an application
for admission to the Official List with the Australian Securities Exchange
(ASX) for the proposed dual listing of its securities on the ASX. "

more good news...

babymonster

25-02-2015, 09:22 AM

but the chairman is leaving... odd...

GizyGold

25-02-2015, 09:27 AM

looks like an exciting next few years ahead. The US 4th quarter launch is sooner than expected & no doubt the soon to be aussie investors will want a piece of that!!!!!!!!!!!:t_up:

bull....

25-02-2015, 09:30 AM

so reliant on aus, show me the growth else where ho hum

Harrie

25-02-2015, 10:36 AM

As anticipated no movement in SP so far today. Suspect that while growth in Aussy is very encouraging its mainly already discounted in the SP. Whilst growth opportunities in international markets appear to be encouraging no one is obviously buying into the view that growth is a certainty as they did around this time last year. Revenue from China could have been a bit more positive, the underlying EBITDA c/f last period doesn't help. Generally a pretty positive report with a fairly good dose of optimism about future growth though.

bull....

25-02-2015, 10:38 AM

spent heaps of money on consultants about growth, hope they have some good ideas the current ones apart from aus dont seem to be working and with the us to come on stream later this yr more cash burn

NZSilver

25-02-2015, 11:12 AM

Looks like a good result, Revenue up and early pathways for further international growth up and running. Hopefully they are successful in at least one country - US/China/UK. Very little profit but always nice, better than a loss and would have been bigger as one off costs of consultants and listing knocked it back.

Not to sure about the benefits of the ASX listing - I have heard it all before ie SUM, but who knows might help some Aus institutions jump on board. Will prob just mean more costs/compliance.

What I like about this company is they have good cash cow (a2 genetics!) in Aus market which can fund growth.

Here's the herald article - kind of stupid title. I think as shareholders we are looking for revenue growth overseas not the profits, hopefully profits come further down the track.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11407575

see weed

25-02-2015, 11:53 AM

Jasemc

25-02-2015, 12:10 PM

Keen buyer but our 51c dumper still in play. One day there will be an explosion upwards.

MAC

25-02-2015, 12:17 PM

Generally a very good result having found the time to read the report from cover to cover.

Exceptional revenue growth, that’s the key thing for a2MC on a growth curve, agree with NZSilver that earnings will come later, sacrificing earnings for growth is all important for now.

No surprises in regard to progress in the UK and China, both markets now setup very well to go ahead from this point. Interesting to hear that ATM are the largest fresh milk exporter to China, let’s see if they can consolidate that position, absolutely a huge potential with that market.

And, let’s see how many Australian insto’s and funds come to the NZX now with a cheque book, with view to taking home a holding in ATM. The companies that have benefited in the past from a dual listing are the ones with a large Australian segment operations.

Harbour today anticipate the AUD to fall away to sub 90 in the medium term, which may stabilise or even add a tailwind for ATM now also.

http://www.harbourasset.co.nz/wp-content/uploads/2015/02/Harbour-Navigator-NZDAUD-Parity-Question-2.pdf

Harrie

25-02-2015, 12:19 PM

From the Herald artical....Net profit dropped to $125,000 or 0.02c per share etc... Thats funny , 0.02c per share in my book is $13,201,339 out of 660,066,979 shares. Correct me if I'm wrong.:confused:

Its not 2%, its .02 of 1% or .0002. If you take the $125k profit devided by no of shares on issue its actually slightly less than that at .0189c

see weed

25-02-2015, 12:41 PM

Its not 2%, its .02 of 1% or .0002. If you take the $125k profit devided by no of shares on issue its actually slightly less than that at .0189c

Thanks Harrie, I had a feeling it was closer to 0.0002 than .02. All good:).

see weed

25-02-2015, 01:02 PM

Buyers building up again. Up 2c , hope it lasts this time.

MAC

25-02-2015, 01:05 PM

Was that you see weed buying 15M shares ?

mayday

25-02-2015, 01:06 PM

buyers kick in now

mayday

25-02-2015, 01:08 PM

would be interesting to watch next SSH notice

blobbles

25-02-2015, 01:11 PM

Holy moly. 15m shares just went under the hammer? Big day trading today... hopefully that was a decent chunk from our big seller...

GizyGold

25-02-2015, 01:13 PM

wow that is some serious action, good work for the guys that topped up, :t_up:

NT001

25-02-2015, 01:13 PM

but the chairman is leaving... odd...

Perhaps not so odd, as he came into this company with a background very much in the healthcare and retirement homes sector, where he remains heavily involved, both in NZ and internationally. That sector is booming, and I expect he wants to focus on it. He has done great things for a2MC, coming to the party as a cornerstone investor and strong driver when the company faced difficult times after the deaths of its two founders, Howard Paterson and Corran McLaclan, and the enforced retirement due to ill health of its next chairman, Jim Guthrie.

drcjp

25-02-2015, 01:15 PM

would be interesting to watch next SSH notice

Indeed, given that 15M just went out the door it might be that a similar pattern to SUM in the last month will emerge.

If so, the business pages are going to make for interesting reading for some time if a certain power finds the kahuna's............

sb9

25-02-2015, 01:21 PM

56c now, hope that's the last time we see the sp in low 50s...

iceman

25-02-2015, 01:25 PM

Have come to pretty much the same conclusions after reading the report. Australia continues very strong growth in both fresh milk and A2 Platinum, retaining very good margins and profit to carefully fund the marketing strategy in UK/CHINA/USA.
Noone should have expected huge sales numbers in China now with the "moratorium" on infant formula sales there from May till December.
Very interesting indeed that a2mc has the highest share of fresh milk exported from Australia.

I feel we are well positioned but will be expecting to see significant ramping up of sales in the UK in the next 12 months.
Looks like Mr Market has this morning accepted the report as being satisfying !

Generally a very good result having found the time to read the report from cover to cover.

Exceptional revenue growth, that’s the key thing for a2MC on a growth curve, agree with NZSilver that earnings will come later, sacrificing earnings for growth is all important for now.

No surprises in regard to progress in the UK and China, both markets now setup very well to go ahead from this point. Interesting to hear that ATM are the largest fresh milk exporter to China, let’s see if they can consolidate that position, absolutely a huge potential with that market.

And, let’s see how many Australian insto’s and funds come to the NZX now with a cheque book, with view to taking home a holding in ATM. The companies that have benefited in the past from a dual listing are the ones with a large Australian segment operations.

Harbour today anticipate the AUD to fall away to sub 90 in the medium term, which may stabilise or even add a tailwind for ATM now also.

http://www.harbourasset.co.nz/wp-content/uploads/2015/02/Harbour-Navigator-NZDAUD-Parity-Question-2.pdf

sb9

25-02-2015, 01:29 PM

http://www.stocknessmonster.com/

Can tell you all from here that the 15ml shares went thro' at 53c and they're all OffMarket....

see weed

25-02-2015, 01:36 PM

Was that you see weed buying 15M shares ?

No, my last buy was yesterday:D:cool::t_up::D

babymonster

25-02-2015, 01:40 PM

wow.. up 5c or 9.8%... surprise

now seller at 56c, buyers at 54c... who will give up first?

mayday

25-02-2015, 01:47 PM

15m shares handover in line with today's news

http://www.guide2.co.nz/money/news/business/a2-milk-lodges-application-for-asx-listing/11/27833

Harrie

25-02-2015, 01:57 PM

The market may be finally woken up to what is really behind the headlined reported drop in profits.
Underlying growth in sales and revenue margins is what growth companies are all about not profit. Sales revenue growth proof in markets, other than Aust, is what I want to see now.
FY2016 rev of $230m is hopefully a conservative estimate.
15m shares off market...big call by someone who has seen the light.

MAC

25-02-2015, 01:58 PM

15m shares handover in line with today's news

http://www.guide2.co.nz/money/news/business/a2-milk-lodges-application-for-asx-listing/11/27833

Interesting isn't it, directors leaving immediately ahead of an ASX listing, well and of course the recent creation of a new yet to be filled spot also, just wish the journo had asked if a2mc had been drawn into any M&A discussions recently ?

Snoopy

25-02-2015, 02:24 PM

I can take it one step further than that.

$18.7m is the EBITDA earnings from Australia before licence fees and less investment in new market development of $7.5m and the undeclared 'corporate costs' which reduce EBITDA to $3.6m. So licence fees and corporate costs must be:

$18.7m - ($7.5m + $3.6m) = $7.6m

If we assume that 1/4 of corporate costs relate to Australia, while the other 3/4 go to developing China, UK and USA, then underlying EBITDA for Australia is:

$18.7m - ($7.5m + 0.25($7.6m))= $9.3m

Since Australia is the only developed market we can assume that all the Depreciation and Amortization relates to that market.

So NPBT = $9.3m - $1.9m = $7.4m

Tax that result at 30% and you get NPAT of $5.18m. There are 660m shares on issue. So this gives earnings per share of:

$5.18m / 660m = 0.00785cps

A reasonable growth multiple might be 20 if ATM finds itself an Australian only brand in the future.
So fair value for ATM Australia is.

20 x 0.00785 = 15.7c

At 63c, ATM has an awfully long way to fall to get back to fair value. There is some chance, say 25%, that ATM will become an Australia only company in a few years. So such a scenario needs to be factored in to what ATM is worth.

$3.3m + $4.2m = $7.5m is the HY2015 EBITDA earnings from Australia before licence fees and less investment in UK market development of $4.2m and the declared 'corporate costs' which reduce EBITDA by $5.2m.

If we assume that 1/4 of corporate costs relate to Australia, while the other 3/4 go to developing China, UK and USA, then underlying EBITDA for Australia is:

$7.5m - (0.25($5.2m))= $6.2m

Since Australia is the only developed market we can assume that all the Depreciation and Amortization relates to that market.

So NPBT = $6.2m - $0.9m = $5.3m

Tax that result at 30% and you get NPAT of $3.71m. There are 660m shares on issue. So this gives 'annualised' earnings per share of:

2X $3.71m / 660m = 1.124cps

A reasonable growth multiple might be 20 if ATM finds itself an Australian only brand in the future.
So fair value for ATM Australia is.

20 x 0.01124 = 22.5c

At 56c, ATM is priced well in excess of Oz market only fair value. So there is a large amount of blue sky built into the share price already.

The plan is to spend $20m in the US over three years ( $US20m/(3 x 0.75) = NZD8.9m per year). They could only do that with current resources if the UK becomes self sustaining (loss in UK for HY2015 of $NZ4.1m). Not enough money to go around (only $9.9m in the bank as at December 2014 ). Cash resouces will be completely drained this year! The likelihood of a cash issue is getting stronger and stronger. ATM will be bankrupt within months if it doesn't do it.

My advice: Don't touch this until the cash issue is announced.

SNOOPY

MAC

25-02-2015, 02:33 PM

bull....

25-02-2015, 02:38 PM

price action today is no different to every other time, big jump followed by sell down. lets see what happens in the next week its still down trend

Snoopy

25-02-2015, 02:43 PM

Or, perhaps professional analysts might assess the company and their margins from a2mc accounting information and what they publish in summary form for all to see and understand.

An a2mc picture (from FY14) paints the picture of earnings sacrifice from the Australian cash cow segment into growth in China, the UK, the US going forward, and corporate services required for a budding international corporate.

Good luck to you snoopy.

7126

From your chart Mac:

$14m (ANZ operating EBITDA)
-$2.2m (China Operating EBITDA)
-$4.2m (Ostensibly UK and US operating EBITDA, but actually all UK)
-$5.0m (Corporate EBITDA)
-$4.4m (expanded push into the US)

-$1.8m (Total)

Cash in bank $9.9m. Much as you would like the figures to add up another way they don't. ATM will be broke within about 18 months with this cashflow. A cash issue looks like the only escape. When the share price was 70c the cash issue went through at 50c. So I am picking the next cash issue (this year) will be at 40c. That is where the share price is headed IMO.

SNOOPY

bull....

25-02-2015, 02:45 PM

im with ya snoopy they dont have or generate enough cash to crack so many new markets

MAC

25-02-2015, 02:48 PM

That's a FY14 chart snoopy and an ATM publication, not a HY15 one, although we may well yet get another along with a HY presentation if forthcoming, do hope so. Good luck though with your bid down there at 20c, hope that works out for you.

kind regards, Mac

MAC

25-02-2015, 02:54 PM

Oh look and here it is, page 6, hot off the press.

https://www.nzx.com/files/attachments/208707.pdf

NZSilver

25-02-2015, 03:40 PM

I found a couple of things quite interesting - one is the $16m in infant formula sales they are doing in Australia. This was an accidental market really, as they were selling the stock that should have gone to China last year. So they now have a $60m infant formula Chinese market and a $16+m Australian market to supply. Great. The second thing was that they are the largest exporter of fresh milk from Australia - that wasnt even on the horizon last year (mainly due to the fact that the Australian Free Trade Agreement wasnt signed and they hadnt yet sorted a process to get milk on the shelves before it went off). The third is that UHT milk is now ready for launch - something that us non-milk drinkers are interested in for the rare occasions when we need to cook/bake with milk. Still waiting for my iced coffee though :-)

KW - always good to hear to insight, you have pulled out some great points!

mayday

25-02-2015, 03:47 PM

Soonpy, doesn't seem buyers quite agree with you in light of cashflow issue which is overwhelmed by prospective growth of company's future.

From your chart Mac:

$14m (ANZ operating EBITDA)
-$2.2m (China Operating EBITDA)
-$4.2m (Ostensibly UK and US operating EBITDA, but actually all UK)
-$5.0m (Corporate EBITDA)
-$4.4m (expanded push into the US)

-$1.8m (Total)

Cash in bank $9.9m. Much as you would like the figures to add up another way they don't. ATM will be broke within about 18 months with this cashflow. A cash issue looks like the only escape. When the share price was 70c the cash issue went through at 50c. So I am picking the next cash issue (this year) will be at 40c. That is where the share price is headed IMO.

SNOOPY

MAC

25-02-2015, 04:07 PM

Soonpy, doesn't seem buyers quite agree with you in light of cashflow issue which is overwhelmed by prospective growth of company's future.

In all seriousness though Mayday, I think what a small minority of folk miss is that the rate of a2mc expansion is consciously engineered to quite precisely match available cashflows, they also have cash on hand which was raised to be used for growth and that is what they have and are doing.

a2mc have also told us that they will fund the US expansion ($20M) from cashflows and other financial holdings in the same way.

They have been growing at the maximum possible rate that cashflows have permitted, but no faster, hence the close to zero NPAT that we have seen for the last three years.

Earnings will come later from the now four markets Australia, UK, China and US when a2mc decide to level the growth rate off, hopefully no time soon, although I suspect we may well see a modest surplus at FY15 and FY16 as the forward $20M in US growth is not that great within the big picture.

The reconciliation is in the presentation for those who like to step things through.

https://www.nzx.com/files/attachments/208707.pdf

Jasemc

25-02-2015, 04:12 PM

To snoopys credit I would prefer they waited to establish uk china and Asia before USA to ease cashflow pressure. You would think platinum sales in china will take off but in Aussie might fall as I remember someone saying they might be high because Chinese buying in Aussie and sending to china. Uk seems to be tracking in line . Exchange rate should almost be at its worst reserve bank will cut official rate this year and cool of housing using macro methods. So let's hope uk and china pick up. Did I read the increased cost of raw milk in there report so global dairy prices don't seem to matter. Overall predictable and exciting future.

blobbles

25-02-2015, 05:41 PM

In all seriousness though Mayday, I think what a small minority of folk miss is that the rate of a2mc expansion is consciously engineered to quite precisely match available cashflows, they also have cash on hand which was raised to be used for growth and that is what they have and are doing.

a2mc have also told us that they will fund the US expansion ($20M) from cashflows and other financial holdings in the same way.

They have been growing at the maximum possible rate that cashflows have permitted, but no faster, hence the close to zero NPAT that we have seen for the last three years.

Earnings will come later from the now four markets Australia, UK, China and US when a2mc decide to level the growth rate off, hopefully no time soon, although I suspect we may well see a modest surplus at FY15 and FY16 as the forward $20M in US growth is not that great within the big picture.

The reconciliation is in the presentation for those who like to step things through.

https://www.nzx.com/files/attachments/208707.pdf

MAC is on to it, this is what SNOOPY forgets of course, which is why I find his methodology for measuring this company flawed. Basing a growth company's MCAP on EPS is folly - they should be using all that earnings for growth. If they are not, then they are no longer a growth company. For a good example, see DIL who have gone from a growth company to a earnings company as someone pointed out on their thread a while ago. SNOOPY in my opinion is using an Earnings methodology of valuing a company - great if you are looking at ROI currently or over the next year or two. But using the same methodology for a company using all of its earnings to grab market share/enter new markets etc IMO is just silly. What you need to consider is market share, revenue growth (growth trajectory as well), market potential and cash available for growth. The last of these is ~10m, which isn't that hot for a growth company, but for one who is able to offset losses in one market from profits in another, its probably enough until they become profitable. For these other factors, ATM is coming up well.

Sure, ATM is taking a risk hitting 3 markets at once. But I think its a calculated risk as the product (I feel) sells itself to health food and premium buyers in those markets. Having lived in and understood China, I think they will be very successful there at least. The jump to USA may be premature I feel as well, but they have already done a lot of groundwork there so understand it well enough. Having a few people there beavering away and getting market exposure may pay off big time if they are able to sign up a supply contract with a big supermarket or health food chain.

NT001

25-02-2015, 06:29 PM

...ATM is taking a risk hitting 3 markets at once. But I think its a calculated risk as the product (I feel) sells itself to health food and premium buyers in those markets.

I think the company wants to get established in these major markets quickly because some of its IP has time limits, and also because when it's got wind in its sails in Australia this is a good time to expand elsewhere. And I strongly suspect that it is aware of some pretty supportive scientific research that's under way, that we don't know about yet.

As a longterm investor I like the strategy and am not concerned about the lack of profits and dividends at this stage. Just want to see it established and accepted in major global markets, and pleased that blobbles thinks it will do well in China.

Funny that today's NZX summary of market highlights didn't even mention the rise in ATM's SP, even though it has frequently mentioned smaller movements in the past. Must have got lost among a few other big SP movements today.

MAC

25-02-2015, 07:13 PM

The situation looks reasonably good going forward Jasemc, don't you think.

a2mc tell us the UK will be profitable during FY16, and China may very well be profitable in FY16 on fresh milk sales alone.

a2mc also just told us that the US will launch later this year, means FY16, and that they will expand fresh milk sales further into Asia also in FY16.

Effectively, the Australian cash cow will switch from funding the UK and China to funding the US at that time. And, there will thus be three out of four markets profitable.

Doing the math on that, even if Australian growth stabilised where it is right now, that forward growth rate remains comfortably sustainable with $20M in capital going into the US spread over the three years as advised.

Should a2mc meet their goal of $230M in revenues at FY16 we may either see quite a large balance from growth reported as earnings, or alternatively, perhaps we may see yet a further expansion in the US or into Europe.

Onward and forward.

babymonster

26-02-2015, 07:03 AM

I think today it will end up a bit higher...

drcjp

26-02-2015, 09:13 AM

I found this interesting: https://nz.finance.yahoo.com/news/a2-milks-premium-payout-attracts-010100335.html
Doesn't surprise me given the inducements new "recruits" are told to get them to run dairy in NZ.
Was talking with cockie on the weekend whom was told by a certain corporation that "the days of low payouts are gone".
He's not happy right now and actually mentioned A2 as an option.

This of course will be viewed as heresy and will be stamped upon at any cost.

babymonster

26-02-2015, 09:59 AM

one off >1.6 million shares traded before it opens.

GizyGold

26-02-2015, 10:09 AM

one off >1.6 million shares traded before it opens.
would love to know what funds are taking a position and are selling..... come on 60cents today!!!

sb9

26-02-2015, 10:10 AM

one off >1.6 million shares traded before it opens.

Yep, its an off market transaction that went thro....

Jasemc

26-02-2015, 10:21 AM

It will be the big seller over the last few weeks hopefully speeding up their reduction.

blobbles

26-02-2015, 10:32 AM

It will be the big seller over the last few weeks hopefully speeding up their reduction.

We can only hope it is the big seller (from the last few MONTHS, not weeks!) finishing their reduction! That would be especially nice.

blobbles

26-02-2015, 10:38 AM

Another half million sold! Wow, looks like another big day here 2.7m and its not even 11am!

see weed

26-02-2015, 10:40 AM

Any one want to have a laugh...Sold 30,000 yesterday for 55c. and bought 15,000 back today for 58c.:D

Jasemc

26-02-2015, 10:49 AM

Seaweed even at 58 you will be fine by 2025

mayday

26-02-2015, 11:06 AM

hopefully sp can break thru MA200 within a couple of weeks, hopefully some positive news (from Uk, China or USA) will be released on the 2nd half 2015....perhaps just my euphoria :p

see weed

26-02-2015, 11:39 AM

Finally in the green after 7 months in the red:).

Snoopy

26-02-2015, 11:43 AM

Question for you NT.

In your opinion would you consider that camel, sheep, buffalo milk etc would be more effective/potent in ameliorating diabetes, autism, cholesterol, Irritable Bowel Syndrome, Crohn’s disease, hepatitis and leaky gut etc, than a2 milk?

Yes, I assumed that everyone knew that camel, sheep, buffalo etc is a2.
Was attempting to draw out whether any of those milks had better outcomes in respect of autism, digestion, crohns etc, than cows a2.
Sorry if that was a bit unclear. NT has answered it anyway.

I think when there is ambiguity of meaning it is worth being a pedant.

I accept you have got your answer and that you acknowledge your question could have been better phrased. However, IIRC all of those medical conditions you mentioned (diabetes, autism, cholesterol, Irritable Bowel Syndrome, Crohn’s disease, hepatitis and leaky gut etc), are being or have been investigated as being affected by changing from a diet of A1 to A2 milk. Camel and buffalo milk may contain other proteins or other trace elements that make it easier or harder to absorb the A2, and so change the efficacy of the A2 milk protein affecting that list of medical conditions. I now understand Harrie that this, or something like it, is what you were getting at.

However, in your original question made no mention of these things. So the original question read to me like you didn't even know that camel, beef and sheep milk were all A2 (even though I now know you didn't think that). But the "A2 ignorant" may have read it exactly that way, which is why I pulled you up on the question.

The purpose of this post is just to highlight that the question you thought you asked was not the question you actually did ask. And in this instance that difference matters.

SNOOPY

iceman

26-02-2015, 11:52 AM

We have competition from more than just buffalo, sheep and camel milk :ohmy: No see weed, please don't start converting people !
http://www.stuff.co.nz/life-style/well-good/teach-me/66675581/would-you-drink-breast-milk-as-a-fitness-supplement

Snoopy

26-02-2015, 12:19 PM

Forecast PE of 60? I don't think so. PE is share price / eps , with eps measured from net profit. There is no net profit forecast for FY2015. The year just gone produced at net profit of $11,000. Based on the number of shares on issue being 660m this gives eps of:

$0.0011/660 = 0.0000016cps

Based on a share price of 60c, the PE was 36,000,000 (36 million)

I would suggest that ATM is now not only the most expensive food company in the world right now, it is also the most expensive food share in the whole history of the sharemarket globally.

Cash on hand is plummeting as the IP weakens. Markets outside of Australia consume more and more cash. Looks like a death spiral to me. I hope you shareholders have a plan B.

I am not sure you shareholders realise how critical the cash position of A2 has become.

In August 2012, with 664.607m shares on issue, the equity in the company was $37.348m (from AGM presentation 20-11-2012)

That represented an asset backing of:

$37.348m/664.607m = 5.6cps

As at December 31st 2014 shareholder equity is just $9.9m (from 1H2015 presentation dated 25-02-2015). Based on the 660.067m shares now on issue this is a net asset backing of.

$9.9m/660.067m = 1.5cps

Earnings from Australia have not been sufficient to fund growth. Almost all the cash the company had following the 2012 rights issue has gone too.

Co-incidentally the share price back then and now are about the same (60c). However, if you consider what you get for your money, buying shares today is much more expensive, - by a factor approaching 4.

There is no reason for the cash situation to have become so critical. The company has a market cap of close to $400m and could easily raise more money via a rights issue or placement. The company cannot borrow because they have no tangible assets to borrow against and no earnings. They are months from running out of cash completely. It doesn't matter what the sales projections are in two years time. All of you shareholders will be gone, out the back door by then, and it will be the bankers and creditors only reaping the A2 benefits.

SNOOPY

MAC

26-02-2015, 12:37 PM

And, there's the usual disinformation from snoopy, if anyone wants an assessment of company cashflow it can be found in summary here https://www.nzx.com/files/attachments/208707.pdf

mayday

26-02-2015, 12:39 PM

http://www.nbr.co.nz/article/a2-milk-list-asx-first-quarter-2015-bd-165539

Take it easy Snoopy, as A2MC is a fast growing company. Invertors or traders must have their own but different views on how to assess the value of this company. I have somewhat about 10% a2 share sitting in my profolio. It won't hurt me too badly even if they all fall. But at the moment, my a2 share has got a green light on it, so far so good.

DYOR. Don't trade if you can't take the risk.

:t_up:

I am not sure you shareholders realise how critical the cash position of A2 has become.

In August 2012, with 664.607m shares on issue, the equity in the company was $37.348m (from AGM presentation 20-11-2012)

That represented an asset backing of:

$37.348m/664.607m = 5.6cps

As at December 31st 2014 shareholder equity is just $9.9m (from 1H2015 presentation dated 25-02-2015). Based on the 660.067m shares now on issue this is a net asset backing of.

$9.9m/660.067m = 1.5cps

Earnings from Australia have not been sufficient to fund growth. Almost all the cash the company had following the 2012 rights issue has gone too.

Co-incidentally the share price back then and now are about the same (60c). However, if you consider what you get for your money, buying shares today is much more expensive, - by a factor approaching 4.

There is no reason for the cash situation to have become so critical. The company has a market cap of close to $400m and could easily raise more money via a rights issue or placement. The company cannot borrow because they have no tangible assets to borrow against and no earnings. They are months from running out of cash completely. It doesn't matter what the sales projections are in two years time. All of you shareholders will be gone, out the back door by then, and it will be the bankers and creditors only reaping the A2 benefits.

SNOOP

bull....

26-02-2015, 12:47 PM

nice profit lol 60c big resistance

Snow Leopard

26-02-2015, 12:58 PM

...There is no reason for the cash situation to have become so critical. The company has a market cap of close to $400m and could easily raise more money via a rights issue or placement. The company cannot borrow because they have no tangible assets to borrow against and no earnings. They are months from running out of cash completely. It doesn't matter what the sales projections are in two years time. All of you shareholders will be gone, out the back door by then, and it will be the bankers and creditors only reaping the A2 benefits.

SNOOP

I have to say Snoopy that even I disagree with you on this.

It might be worth stepping back a bit reading all the report, re-read back a couple of years reports and consider what there true cash-burn rate is.

Yes if they continue as is they will run out of cash in a couple of years but they do have reasonable revenue and profitable business segments, so if the worst comes to the worst they can get probably get by.

Best Wishes
Paper Tiger

Disc: Do not own any ATM these days.

MAC

26-02-2015, 12:58 PM

I'm holding my valuation at FY15 $1.10, no change from my previous update.

All was very much as expected within yesterdays report. I've not significantly altered my DCF aside from minor updates but will revise again should further information on the US market size and timing come to hand.

Happy to share and compare research and analysis with others offline as always.

Base Case:

DCF, WACC 11.0%, 30yr PG 3.0%, NZ$230M in revenues at FY16 as estimated by the A2 Milk Company, a continuation of 50% price point premiums, a continuation of gross margins at 35%, UK segment profitability at FY16, China segment profitability at FY16, US market entry later this year during early FY16, expansion of fresh milk exports into Asia during FY16.[/QUOTE]

sb9

26-02-2015, 01:11 PM

Harrie

26-02-2015, 01:12 PM

I think when there is ambiguity of meaning it is worth being a pedant.

I accept you have got your answer and that you acknowledge your question could have been better phrased. However, IIRC all of those medical conditions you mentioned (diabetes, autism, cholesterol, Irritable Bowel Syndrome, Crohn’s disease, hepatitis and leaky gut etc), are being or have been investigated as being affected by changing from a diet of A1 to A2 milk. Camel and buffalo milk may contain other proteins or other trace elements that make it easier or harder to absorb the A2, and so change the efficacy of the A2 milk protein affecting that list of medical conditions. I now understand Harrie that this, or something like it, is what you were getting at.

However, in your original question made no mention of these things. So the original question read to me like you didn't even know that camel, beef and sheep milk were all A2 (even though I now know you didn't think that). But the "A2 ignorant" may have read it exactly that way, which is why I pulled you up on the question.

The purpose of this post is just to highlight that the question you thought you asked was not the question you actually did ask. And in this instance that difference matters.

SNOOPY

Thanks Snoopy, you have actually given me a further insight into my question, whilst being berated for my linguistic skills.

What I should have clarified is, was there a nutritional difference in a2 camel, sheep, buffalo a2 milk c/f cows a2 milk. This is despite the economics of production, or the feasability of supply. It was a scientific question.

What I now know is that Camel and buffalo milk may contain other proteins or other trace elements that make it easier or harder to absorb the A2, and so change the efficacy of the A2 milk protein affecting certain medical conditions.

I have to conclude from this that all a2 milk is potentially beneficial for certain medical conditions, irrespective of what source it comes from. How effective the a2 milk source is for dealing with the medical conditions its purported to be effective against, is indeterminable at this point.

bull....

26-02-2015, 01:12 PM

yes still 20mil to go - popular song by iron maiden come to mind run to the hills run for ya life lol

mayday

26-02-2015, 01:37 PM

may take other several months until they get rid of other 20m, but long-term investor shouldn't be too worried. I am happy to hold

https://nzx.com/companies/ATM/announcements/261182

AMP dropped their holding from 5.61% to 2.97%.

Sale of 17,433,371 shares between 31/10/14 and 25/02/15

That explains some of recent downtrend then....

MAC

26-02-2015, 01:41 PM

A sell down from 31 October 2014, for which the concurrence with AMP losing their active capital management mandate from the NZ super fund in October is not lost on anyone.

http://www.nbr.co.nz/article/nz-super-fund-dumps-amp-capital-164855

Still, for long term holders, it will be a pleasure to see a return to valuation once AMP are done.

They won't sell down their entire holding. What percentage holding represents a passive NZ50 index allocation for them ?

sb9

26-02-2015, 01:43 PM

yes still 20mil to go - popular song by iron maiden come to mind run to the hills run for ya life lol

Not to worry, sure they'll find some instos from AUS side especially who would be keen to lap them up, just like 15mln went thro the y'day...

Jasemc

26-02-2015, 02:00 PM

Could well be drive price down to make it appeal to Aussie. Makes sense.

see weed

26-02-2015, 02:08 PM

https://nzx.com/companies/ATM/announcements/261182

AMP dropped their holding from 5.61% to 2.97%.

Sale of 17,433,371 shares between 31/10/14 and 25/02/15

That explains some of recent downtrend then....

For every seller there is a buyer. So who is the new holder? Maybe brokers getting ready to feed ASX. Me going to wait for ASX listing.

MAC

26-02-2015, 02:10 PM

I think we may well see a violent correction to the upside once that sell pressure is gone.

Could happen any day too, I don't think Australian intso buyers have to wait for the ASX listing, more likely they have been waiting for the HY results as the trigger, they can transfer shares between exchanges for a loose change fee.

ATM is otherwise a very tightly held stock with low liquidity outside of the 85% of long term large holders.

Analyst consensus price targets are at 80c and have been at that level consistently since October last year, prior to that they were higher, their valuations will be higher than their price targets.

Milford were buying ATM up to 90c last year and would not have done so without seeing long term upside from that point, they increased their holding to around 14% below 90c.

Jasemc

26-02-2015, 02:16 PM

Yep every big sp sale is amp down

Harrie

26-02-2015, 02:24 PM

I don't have any past info on what volume is traded except on the day, but didn't 17m shares trade in just one day a few days ago?.
If so thats the full allocation of AMP's sales going back to October. incidently, this raises an important issue regarding prompt SSH disclosure (at least to the 5% mark anyway).
There has been a heap more shares traded than 17m since october, so there has to be a heap more sellers than just AMP Capital, and in good quantaties.
By the same token a corresponding heap of buyers too, albeit at a lower level. The 5 oclock boys are still there too. They can't all be representing AMP.

mayday

26-02-2015, 02:32 PM

could be shorters? provided if they started shorting in 80c, 70c or even 60c level, they could still make a good profit by buying them back at currenct sp - plenty from AMP for sale :confused:, just be my guess

I don't have any past info on what volume is traded except on the day, but didn't 17m shares trade in just one day a few days ago?.
If so thats the full allocation of AMP's sales going back to October. incidently, this raises an important issue regarding prompt SSH disclosure (at least to the 5% mark anyway).
There has been a heap more shares traded than 17m since october, so there has to be a heap more sellers than just AMP Capital, and in good quantaties.
By the same token a corresponding heap of buyers too, albeit at a lower level. The 5 oclock boys are still there too. They can't all be representing AMP.

Snoopy

26-02-2015, 02:49 PM

I have to say Snoopy that even I disagree with you on this.

It might be worth stepping back a bit reading all the report, re-read back a couple of years reports and consider what there true cash-burn rate is.

The real cash burn is what would happen if every market went as well as Australia ;-P. In practice ATM appointed a dud exclusive distributor in New Zealand, had to buy out their joint venture partner in England, and had to overcome the ban on their infant formula into China. Granted ATM have solved or are working on all of these issues. The point I am making is that 'stuff happens'. Having cash on hand to meet unexpected contingencies is good business practice. ATM might get by, true. But if anything else unexpected happens the bail out cash bin is bare.

Yes if they continue as is they will run out of cash in a couple of years but they do have reasonable revenue and profitable business segments, so if the worst comes to the worst they can get probably get by.

ATM could certainly get by as a stand alone business in Australia. But unfortunately that means a share price starting with a '2' not a '5'. Therein lies the downside risk for people buying into ATM today.

SNOOPY

MAC

26-02-2015, 02:54 PM

At the beginning of 2014 when the SP was above 90c, AMP held around 11%, Milford mopped up a few of those along the way between then and now.

Although the NZ super fund officially gave AMP the boot in October, that would not have occurred without months of prior consultation and clarification, it's entirely probable AMP were selling right through that process as a matter of de-risking on their part.

Astonishing isn't it what just a single shareholder can do when they have to sell irrespective of valuation.

Still though 15M shares were snapped up quick yesterday, the rest could go as easily tomorrow off the back of a report like that.

Snoopy

26-02-2015, 03:00 PM

Bit pessimistic there Snoopy. As the company has stated - sales in the UK are expected to double. That there is cashflow. And China sales are about to start, whilst all the expenses for China have already been incurred in the prior half. More cashflow. That being said, I would not be surprised if they use the ASX listing to bring on a big institutional investor - they all say they arent looking to raise cash, but then when they get an offer to good to refuse, they take it.

The thing that I was puzzled about was that it wouldn't take much to fix the cash position.

660m shares on issue. A 1:4 cash issue at 30c would raise:

0.25 x 660m x $0.3 = $49.5m

All the cash worries would be over, for what is really peanut money in corporate terms. Around $50m is plenty of capital to fast track expansion into the US. Even a 1:8 issue at 30c ($25m) might be enough. So why sail so close to the wind with their cash?

My best logical conclusion: ATM have approached their major shareholders and those shareholders do not support a cash issue, even a modest one. They don't want to see their stake diluted and they don't want to part with more cash. But from the outside that looks like ridiculous gamesmanship. So much at risk for what is in corporate terms a very modest capital injection.

I think KW might be right. Get a new Chairman on board, and make sure a couple of directors are Aussie. Get an Australian institutional investor on board via a placement. Makes sense. But also makes for a soft share price going forwards until the new investor is bedded in.

SNOOPY

Snow Leopard

26-02-2015, 03:47 PM

...But bugger it, if XRO can jump 30% based on no news other than a cap raising, why can't ATM get some love???

https://www.youtube.com/watch?v=ydfH7iuLR0I

Best Wishes
Paper Tiger

blobbles

26-02-2015, 03:57 PM

The thing that I was puzzled about was that it wouldn't take much to fix the cash position.

660m shares on issue. A 1:4 cash issue at 30c would raise:

0.25 x 660m x $0.3 = $49.5m

All the cash worries would be over, for what is really peanut money in corporate terms. Around $50m is plenty of capital to fast track expansion into the US. Even a 1:8 issue at 30c ($25m) might be enough. So why sail so close to the wind with their cash?

My best logical conclusion: ATM have approached their major shareholders and those shareholders do not support a cash issue, even a modest one. They don't want to see their stake diluted and they don't want to part with more cash. But from the outside that looks like ridiculous gamesmanship. So much at risk for what is in corporate terms a very modest capital injection.

I think KW might be right. Get a new Chairman on board, and make sure a couple of directors are Aussie. Get an Australian institutional investor on board via a placement. Makes sense. But also makes for a soft share price going forwards until the new investor is bedded in.

SNOOPY

Why do major shareholders not support a cash issue? Because they are confident ATM have enough cash on hand to see them through to profitability. If they did not think this and did not want their shares diluted, would they not sell their shares? But they are not and for me that gives me confidence that they are happy with ATMs plan. The just released HY shows that ATM are on target or even a little ahead of target with a few unexpected but welcome surprises (biggest Australian fresh milk seller to China, a substantial increase in revenues etc). Next year they will need to achieve a similar growth rate to this year for revenues and they will hit their target of 230m. At that stage they would have been in UK and China for 2 years, USA for 1 and maybe experiencing rapid growth in 1 or more of those markets.

And you yourself just stated how easy it would be for them to raise cash. I would imagine a 50m share placement @50c each based on current SP would be about right, with their current cash burn that would last them 3 years. How long would it take for them to organise this? A month? How long until the cash runs out? 18 months.

Sorry, but your comments SNOOPY sound more and more like "the sky is falling! the sky is falling!". ATM aren't out of options. They have 18 months to see themselves through to profitability which is looking better and better. And what happens if they aren't where they want to be then? They could close 1-2 of their overseas operation and just keep growing in Australia/UK or China. This would likely see them making 20-30m a year or more in a year or more in pure earnings, which isn't too shabby to say the least.

But please keep posting, you do throw up some interesting arguments. Always good to have someone picking things apart!

blobbles

26-02-2015, 03:58 PM

Alright peoples, because I was hit up for not telling anyone about XRO's breakout, here's the dirt on ATM in a timely fashion. ITS JUST CRACKED ITS 100 and 120 DAY MA. RSI is positive. There is volume supporting the move. Still waiting on MACD to move into the positive, and for the daily MA breakout to be confirmed - this should happen over the next couple of days. But remember, we have already had one Fakeout, this could be another.

As always, do your own bloody research and think for yourselves!

7137

Good post KW, thanks for the TA, this time they have solid fundamentals behind them, I am picking its onward and upward.

MAC

26-02-2015, 04:12 PM

Some commentary from Geoff summing things up;

https://player.fm/series/rnz-business-news/a2-milk-says-us-launch-wont-spread-its-resources-too-thinly

Harrie

26-02-2015, 04:31 PM

My best logical conclusion: ATM have approached their major shareholders and those shareholders do not support a cash issue, even a modest one. They don't want to see their stake diluted and they don't want to part with more cash. But from the outside that looks like ridiculous gamesmanship. So much at risk for what is in corporate terms a very modest capital injection.

I think KW might be right. Get a new Chairman on board, and make sure a couple of directors are Aussie. Get an Australian institutional investor on board via a placement. Makes sense. But also makes for a soft share price going forwards until the new investor is bedded in.

Snoopy. Whats the difference between an institutional placement, and a rights issue to existing shareholders. Actually nothing because both have the effect of diluting the shares. If existing institutional shareholders are not happy to fork out more cash now and diluting their stake, why would they be happy to see another institutional investor take a placement of shares and acheive the very thing existing shareholders are supposedly trying to avoid?

Jasemc

26-02-2015, 04:48 PM

very true. The logic is ATM think they have enough cash flow. If not Snoopy will pump in a few Million!:D

Harrie

26-02-2015, 05:04 PM

very true. The logic is ATM think they have enough cash flow. If not Snoopy will pump in a few Million!:D

Yes Jasemc, Maybe Snoopy is trying to talk up a cash issue so that he can get in at a price with a 3 or 4 handle on it! Good luck with that one Snoopy.

On a more serious note, I like a number of posters on this site, appreciate the contribution Snoopy makes. Because most of us are donkey deep in the stock we are constantly looking for affirmation. Without alternative views we run the risk of getting blindsided by factors we are not taking into account or have not considered. The more alternative views the better as far as I am concerned.

Harrie

26-02-2015, 05:19 PM

very true. The logic is ATM think they have enough cash flow. If not Snoopy will pump in a few Million!:D

yes, maybe snoopy is trying to talk up a cash issue so that purchases with a 3 or 4 handle on it can be made. Good luck with that one snoopy.

On a more serious note I like a number of others on this site appreciate snoopys contribution. We have to be careful that because a number of us are donkey deep in the stock that we don't get blindsided by something not taken into account or ignored because it does not reconcile with our affirmation process buying into the stock in the first place. The more negative views the better as far as I am concerned.

5 o'clock boys back in town?

see weed

27-02-2015, 07:15 AM

yes, maybe snoopy is trying to talk up a cash issue so that purchases with a 3 or 4 handle on it can be made. Good luck with that one snoopy.

On a more serious note I like a number of others on this site appreciate snoopys contribution. We have to be careful that because a number of us are donkey deep in the stock that we don't get blindsided by something not taken into account or ignored because it does not reconcile with our affirmation process buying into the stock in the first place. The more negative views the better as far as I am concerned.

5 o'clock boys back in town?

Fully agree. But if the stock is only worth 20c or 30c, then why has over 24,000,000 gone through in the last week or so over 50c?

MAC

27-02-2015, 10:05 AM

blobbles

27-02-2015, 10:28 AM

Well well, that’s sooner than the “later in the year” reported just a couple of days away.

Onward and upward big time !

“A2 milk which will be sold in half gallon cartons for $4.00 to $4.50 with the strapline ‘The milk that might change everything’ – will arrive in several leading grocery stores from Kroger and safeway to whole foods, supported by advertising , in store demos, radio ads and a digital marketing drive.”

http://www.foodnavigator-usa.com/Manufacturers/a2-milk-to-make-US-debut-in-California-in-April

Holy moly! Good find MAC!

Kroger stores = 2640
Safeway stores = 1335
Whole foods stores = ~400

Of course ATM won't be in all of them, only some on the west coast states, but being represented in probably over 500 stores (West Coast states ~15% of US population) is a damn good start. If they are successful and get a nationwide supply deal, that gives them the ability to be in ~4300 stores throughout the US.

Harrie

27-02-2015, 10:32 AM

Read it Mac. I'm excited by the way a2mc is strategically and judiciallygrowing the brand . Setting up in Denver which is over the rockies as a mid way admin point for further expansion in the USA is a real statement of intention. How confident is that!

I'm thinking that things may move a little faster than they are anticipating but I guess its all about supply.
If the demand increased significantly could the supply meet that demand? If so maybe a cash issue could be on the cards but in those circumstances its likely to have a handle of more around the 60 and 70 mark.

MAC

27-02-2015, 10:41 AM

Holy moly! Good find MAC!

Kroger stores = 2640
Safeway stores = 1335
Whole foods stores = ~400

Of course ATM won't be in all of them, only some on the west coast states, but being represented in probably over 500 stores (West Coast states ~15% of US population) is a damn good start. If they are successful and get a nationwide supply deal, that gives them the ability to be in ~4300 stores throughout the US.

Going in straight away with four products too shows some big confidence don’t you reckon Blobbles, there must be some pretty damn positive market research in behind that as an initial move.

Checking retail prices, a half gallon of Kroger milk (home brand) retails for $1.25, a2mc look to enter the market at $4.00 to $4.50.

Thus, it looks like similar margins to the Australian operation, nice !

Rego55

27-02-2015, 10:45 AM

Well well, that’s sooner than the “later in the year” reported just a couple of days away.

Onward and upward big time !

“A2 milk which will be sold in half gallon cartons for $4.00 to $4.50 with the strapline ‘The milk that might change everything’ – will arrive in several leading grocery stores from Kroger and safeway to whole foods, supported by advertising , in store demos, radio ads and a digital marketing drive.”

http://www.foodnavigator-usa.com/Manufacturers/a2-milk-to-make-US-debut-in-California-in-April

Thanks very much for posting that Mac. Really interesting read and I appreciate all the articles/entries you find and post that help lazy buggers like me out!!

babymonster

27-02-2015, 10:47 AM

blobbles

27-02-2015, 10:49 AM

That news article is also on the front page of the food navigator site, which gets 51k daily views. Nice way to get the word out, hopefully the story will be picked up by other sites and reposted...

blobbles

27-02-2015, 10:56 AM

Going in straight away with four products too shows some big confidence don’t you reckon Blobbles, there must be some pretty damn positive market research in behind that as an initial move.

Checking retail prices, a half gallon of Kroger milk (home brand) retails for $1.25, a2mc look to enter the market at $4.00 to $4.50.

Thus, it looks like similar margins to the Australian operation, nice !

I think it is probably necessary to launch with the 4 they have, particularly if you are doing it to a health concious market. But yeah, good confidence shown, looks like the USA team maybe paying for themselves pretty soon.

Just running some numbers:

Say 500 stores @50 bottles per week, per store and A2 making $2.5 per bottle (these are all just guesses really) = ~$3.25m a year in revenue in USD terms?

If they went nationwide at the same ratios it would be ~$28m a year in revenue, but lets not get ahead of ourselves :-)

sb9

27-02-2015, 10:59 AM

http://www.nbr.co.nz/article/steady-she-goes-approach-pays-a2-milk-db-p-169340

Good article in NBR today

babymonster

27-02-2015, 12:27 PM

http://www.nbr.co.nz/article/steady-she-goes-approach-pays-a2-milk-db-p-169340

Good article in NBR today

not a pay customer... ;)

sb9

27-02-2015, 01:00 PM

For those that don't have access to paid content from NBR..

‘Steady as she goes’ approach pays off for A2 Milk..

With its sales going gangbusters in Australia, the A2 Milk Company [NZX: ATM (https://nzx.com/markets/NZSX/securities/atm)] should have a great springboard for global expansion.
But nothing is ever that simple and chief executive Geoff Babidge is the first to admit the company has previously battled to gain traction in markets further afield.
That’s why he’s taking the next phase of A2’s growth extra carefully.
To be fair, some of the company’s previous difficulties have been out of its control: For example, it launched its branded infant formula into China in November 2013 around the same time as Fonterra’s botulism false alarm.
The subsequent regulatory reform in China has slowed that initiative, which is something the company is working hard to get back on track.
At the same time Mr Babidge must be extra pleased with results from the Australian business, which effectively drove A2’s 27% increase in underlying earnings to $3.27 million in the first half.
Total revenue of $74.79 million was up 38% on the previous corresponding period. The company still made a loss due to one-time costs associated with its planned Australian listing, an increase in other operating costs and an income tax charge of $1.56 million.
A2’s share price rose a further 6% to 59c yesterday having put on 10% on Wednesday following the result.
Investors are now focusing on the growth opportunities in the UK, China and the US.
Mr Babidge says the company continues to make progress in resuscitating sales momentum in the UK liquid milk market as well as the infant formula market in China, where it spent $1 million on marketing despite having limited product on the shelf.
“Sales of product in second half will increase,” he says, “and certainly we are looking at [financial year] 2016 being at least break-even up there.”
He expects the company to ramp up sales In the UK in the second half of the 2015 financial year, having gained access into Sainsbury supermarkets as well as Tesco and established a revised business model.
First NZ Capital has an “outperform” rating on the stock, noting yesterday that the result exceeded its expectations.
Leveraging the company’s successful Australia model globally remains key. If A2 can successfully execute that strategy in the UK, China and US it could justify a “spot” valuation of $1.24, the brokerage says in its research note.
First NZ has upgraded its target price from 55c to 76c.
Breaking new ground
The United States looms as another opportunity and A2 is targeting a launch into the fresh milk market of the West Coast in the fourth quarter.
The plan is to launch through a wholly owned subsidiary with packaging outsourced.
Mr Babidge tells NBR the company has been developing a plan for the US for two years now.
“It’s a very attractive market. We are going to be very disciplined how we move with respect to that focusing on one region on the West Coast.”
The idea is to tap what he calls the specialty milk market, which includes organic products and milk alternatives like A2 is renowned for.
“It’s a very large, interesting dynamic sector in the US market - certainly compared to every other key milk market that we have investigated.”
Since November A2’s management team have been presenting their product to key retailers in the US and getting a very good response, he says.
First NZ’s analyst calculates a cash burn of $US20 million spread over the next three years for A2 to implement its strategy up there.
But the payoff looks promising.
“Based on our previous ‘what-if’ analysis for A2, if it were to successfully enter and execute its plans in the Californian liquid milk market, there is clearly significant value that could accrue to the company,” First NZ says, adding that it estimates the upside at 23c a share.
Mr Babidge says the company is focused on balancing revenue and growth with marketing and investment.
“If you look at the real health of the business, it's reflected in the Australian business performing exceptionally strongly in both revenue and earnings. .”
The company also announced a new chairman designate in FMCG industry veteran David Hearn to replace retiring incumbent Cliff Cook, and has lodged an application for listing the company’s securities on the ASX.

MAC

27-02-2015, 01:13 PM

That’s a little higher than my FY15 $1.10 DCF workup, but I’ve not yet revised for US growth as early as April.

There’s no reason that the SP should not go well over $1 once AMP are done, bring on the ASX listing.

“First NZ Capital has an “outperform” rating on the stock, noting yesterday that the result exceeded its expectations. Leveraging the company’s successful Australia model globally remains key. If A2 can successfully execute that strategy in the UK, China and US it could justify a “spot” valuation of $1.24, the brokerage says in its research note”.

“Based on our previous ‘what-if’ analysis for A2, if it were to successfully enter and execute its plans in the Californian liquid milk market, there is clearly significant value that could accrue to the company,” First NZ says, adding that it estimates the upside at 23c a share”.

Snoopy

27-02-2015, 01:50 PM

Snoopy wrote:
My best logical conclusion: ATM have approached their major shareholders and those shareholders do not support a cash issue, even a modest one. They don't want to see their stake diluted and they don't want to part with more cash. But from the outside that looks like ridiculous gamesmanship. So much at risk for what is in corporate terms a very modest capital injection.

I think KW might be right. Get a new Chairman on board, and make sure a couple of directors are Aussie. Get an Australian institutional investor on board via a placement. Makes sense. But also makes for a soft share price going forwards until the new investor is bedded in.

Harrie Replied:
Snoopy. Whats the difference between an institutional placement, and a rights issue to existing shareholders? Actually nothing because both have the effect of diluting the shares. If existing institutional shareholders are not happy to fork out more cash now and diluting their stake, why would they be happy to see another institutional investor take a placement of shares and acheive the very thing existing shareholders are supposedly trying to avoid?

Good question Harrie. Australia is one step closer than NZ to wider Asian 'first world' markets like Singapore, Hong Kong, Japan and even those East Coast cities in China A2 already targets. I think A2 will be seeking a strategic partner in Australia that has expertise in Asia for longer term expansion. A partner that brings something to the table will shrink the share of existing shareholders - true. But if that same partner can help bake a bigger overall high then all shareholders will benefit.

SNOOPY

Snoopy

27-02-2015, 01:57 PM

‘Steady as she goes’ approach pays off for A2 Milk..

<snip>

With its sales going gangbusters in Australia, the A2 Milk Company should have a great springboard for global expansion.
But... <snip>

To be fair, some of the company’s previous difficulties have been out of its control: For example, it launched its branded infant formula into China in November 2013 around the same time as Fonterra’s botulism false alarm. The subsequent regulatory reform in China has slowed that initiative, which is something the company is working hard to get back on track.

The above comment is ridiculous. In food markets in particular, there are always things that crop up that are outside a company like A2s control. To assume that there won't be is just poor management. "We take the credit for our success but blame someone else for our failures." Anyone running a business on that philosophy doesn't earn much credit with me.

Mr Babidge says the company continues to make progress in resuscitating sales momentum in the UK liquid milk market as well as the infant formula market in China, where it spent $1 million on marketing despite having limited product on the shelf.

So the sales campaign went ahead in China even though they had virtually no stock to sell. Why not postpone the campiagn until the stores were restocked? This is good managment?

“Sales of product in second half will increase,” he says, “and certainly we are looking at [financial year] 2016 being at least break-even up there.”

So probably no profit from China this year. Not a biggie.

He expects the company to ramp up sales In the UK in the second half of the 2015 financial year, having gained access into Sainsbury supermarkets as well as Tesco and established a revised business model.

So the real funding for the US expansion will most likely be coming from a profitable UK. I hope Babbage has a plan B if his 'expectations' in the UK are not met.

First NZ Capital has an “outperform” rating on the stock, noting yesterday that the result exceeded its expectations. Leveraging the company’s successful Australia model globally remains key.

This is a ducks lining up forecast. If Australian growth continues, and if the UK market becomes profitable and if they can replicate the success in other markets then we can justify a high valuation. There are a lot of ifs in that valuation. Yet nothing has fired, in profit terms, outside of Australia yet. And the capital expansion bin is bare.

The United States looms as another opportunity and A2 is targeting a launch into the fresh milk market of the West Coast in the fourth quarter. The plan is to launch through a wholly owned subsidiary with packaging outsourced.
<snip>
“It’s a very attractive market. We are going to be very disciplined how we move with respect to that focusing on one region on the West Coast.”

<snip>

“It’s a very large, interesting dynamic sector in the US market - certainly compared to every other key milk market that we have investigated.”

So more things going on that managment can't get a firm handle on than other markets? Maybe not quite as simple as just rolling out the Australian model?

First NZ’s analyst calculates a cash burn of $US20 million spread over the next three years for A2 to implement its strategy up there.

No they didn't. That $20m development budget is from A2 itself, based on the expected cash available, should things go to plan. It wouldn't surprise me to learn that more than $20m is needed to conquer California, let alone the rest of the US.

“Based on our previous ‘what-if’ analysis for A2 <snip>

I can produce a spectacular valuation with a 'what if' analysis too!

Mr Babidge says the company is focused on balancing revenue and growth with marketing and investment.
“If you look at the real health of the business, it's reflected in the Australian business performing exceptionally strongly in both revenue and earnings.”

Market budget = Cash Generated

How that relates to the actual capital investment needed to conquer a market is not being investigated.

Strategy going forwards is: Earn , Spend, Hope.

SNOOPY

MAC

27-02-2015, 02:03 PM

7138
__________________________________________________ __

babymonster

27-02-2015, 02:10 PM

currently 58c seller is 3x more than 57c buyers.. the sp may go back to 57c today...

sb9

27-02-2015, 02:37 PM

Can tell you there are quite a few offmarket transactions gone thro' today, in multiples of 30k,20k,55k etc....all at 58c

sb9

27-02-2015, 03:51 PM

https://nzx.com/companies/ATM/announcements/261285

ACC on board...

mayday

27-02-2015, 03:52 PM

shares acquisition from director, brilliant!

https://nzx.com/companies/ATM/announcements/261285

ACC on board...

RGR367

27-02-2015, 04:19 PM

Got my very first bundle (at 56 cents) today from the transaction made from selling XRO yesterday :) May we all be right on how see this so GL to us all.

Harrie

27-02-2015, 06:14 PM

I think A2 will be seeking a strategic partner in Australia that has expertise in Asia for longer term expansion. A partner that brings something to the table will shrink the share of existing shareholders - true. But if that same partner can help bake a bigger overall high then all shareholders will benefit.

What's wrong with freedom foods being that partner. Its been noted already that Freedom foods will be one of the big winners out of the Aussie/China free trade deal. Freedom own ~ 17% of a2mc, and freedom already have a fairly comprehensive distribution network in China so it would make sense for a2mc and freedom for a2mc to piggy back on that wouldn't it? No placement of shares required to fund it.

there are always things that crop up that are outside a company like A2s control. To assume that there won't be is just poor management. "We take the credit for our success but blame someone else for our failures." Anyone running a business on that philosophy doesn't earn much credit with me.

In general yes snoopy but to be fair the china registration arrangement could not have been anticipated even by the astutest of management. Fair enough though about stopping the sales campaign though although there may have been a contractual commitment there.
First NZ’s analyst calculates a cash burn of $US20 million spread over the next three years for A2 to implement its strategy up there. No they didn't. That $20m development budget is from A2 itself, based on the expected cash available, should things go to plan. It wouldn't surprise me to learn that more than $20m is needed to conquer California, let alone the rest of the US.

Quite possible, but they are not going to go any further until they can establish some growing market share in California. At that point they either are generating positive cash flow to fund further expansion in other states or really go for it by a rights issue which comes back to your point. They have to be pretty sure they are getting at lot of enquiry/demand from outside California.

I can produce a spectacular valuation with a 'what if' analysis too!
Yes I accept that

If Australian growth continues, and if the UK market becomes profitable and if they can replicate the success in other markets then we can justify a high valuation. There are a lot of ifs in that valuation. Yet nothing has fired, in profit terms, outside of Australia yet. And the capital expansion bin is bare.

This is where I totally agree with you. There are a lot of if's. Its a growth company. Of course there are plenty of ifs. If there wasn't the price would not be where it is now.

blobbles

27-02-2015, 06:28 PM

Director buying in... definitely a good sign. 300k more shares for someone that already has 1.1 million... can't argue that they aren't confident of their plan now, they are literally putting their money where there mouths are.

kizame

27-02-2015, 06:32 PM

Hmmn Did anybody see that aprox. 200,000 shares went through around 5pm,manipulating the share price up by a cent,hmmn is that going to be the way it is now moving forward,the share price drops by a cent during the day then someone obviously secretly accumulating,goes and takes the offer price,I don't like this at all,somethings up. hahaha

In all seriousness its good to see for a change.

NT001

27-02-2015, 06:51 PM

Well well, that’s sooner than the “later in the year” reported just a couple of days away.
“A2 milk which will be sold in half gallon cartons for $4.00 to $4.50 with the strapline ‘The milk that might change everything’ – will arrive in several leading grocery stores from Kroger and safeway to whole foods, supported by advertising , in store demos, radio ads and a digital marketing drive.”

http://www.foodnavigator-usa.com/Manufacturers/a2-milk-to-make-US-debut-in-California-in-April

Hey, that's a cracker of a story, well explained and to a great audience. I was surprised when I read that the US West Coast would only start selling A2 later in the year as I'd heard they were just about ready to start. Whole Foods, I gather, have a big reputation among the health-conscious in the US. And in a huge market like California you only need a small piece of the action to make money. This looks like takeoff year for a2MC.

Snow Leopard

27-02-2015, 07:32 PM

From the first page of this thread back in the good old days (24-Apr-2007)

A2 LAUNCHES MILK INTO LUCRATIVE US MARKET

Major Supermarket Chain Hy-Vee to sell a2 milk(TM) across US Mid-West.

Auckland, 24 April 2007 - A2 Corporation announced today the inaugural launch of its premium a2 milk(TM) into the US market through an exclusive deal with a leading supermarket chain.

A2 Corporation's United States subsidiary, A2 Milk Company LLC, in partnership with Original Foods Company LLC, will launch its value-added a2 milk(TM) product through the leading US supermarket chain, Hy-Vee, which has stores throughout the Mid-Western states comprising Nebraska, Iowa, Kansas, Illinois, Missouri, South Dakota, and Minnesota.

Hy-Vee has sales of more than US$4.6 billion and more than 200 retail stores across the seven Midwestern states, and ranks among the top 15 supermarket chains in the United States.

Anthony Lawler, CEO of A2 Corporation says the launch of a2 milk(TM) into the United States is a major platform for growth and follows several years of solid preparation.

"A2 Corporation is very excited to now have its milk product available in the US market which holds tremendous promise for revenue growth and for expanding our business in one of the biggest consumer and beverage markets in the world. We are also very pleased to have achieved entry into the lucrative US market according to the time frame we set last year and look forward to increasing our share of the market as US consumers develop a taste for a2 milk(TM)," says Lawler.

Tim Thietje President of The Original Foods Company says that the company is glad to be the first U.S. based company to partner with A2 to produce a2 milk(TM) for sale to American consumers.

"After two years of planning and hard work, The Original Foods Company is very excited to launch The Original Foods Company a2 milk(TM) into more than 200 Hy-Vee Food and Drug stores across the Mid-West. a2 milk(TM) delivers on our mission to sell premium quality, natural and functional foods, and our close working relationship with A2 and Hy-Vee supermarkets offers the opportunity to work with partners that share our vision," says Thietje.

Lawler also says that the launch of a2 milk(TM) into the US follows a concerted programme to develop the market which the company has been working on for some time and which it plans to extend beyond the Mid-West. Lawler would also like to thank Ideasphere Inc. (A2 Corporation's joint venture partner in USA) whose effort, support and expertise has been critical in the a2 milk (TM) launch.

Cliff Cook, A2 Corporation's Chairman stated that "the company now knows the US beverages market in detail via consumer and market studies as well as in depth discussions we've had with producers, distributors and retailers. We look forward to extending a2 milk(TM) beyond the initial select market of the Mid-West into other parts of the US which provides the best business environment in the world to grow our product."

ENDS

Best Wishes
Paper Tiger

NT001

27-02-2015, 08:13 PM

Yes PT, things didn't go so well in the US first time round - it was too early.

In December 2008 the A2 Milk Company announced it was withdrawing product from sale in the US pending a re-branding and re-launch on a broader scale across the US. According to Keith Woodford's book, it was found hard to market a product where the issues were complex, where there were constraints on the promotion of its health message, and where consumers remained ignorant or confused about the issues.

Things have moved on a lot since then. And there are dairy farmers in the US who geared up for A2 at that time and are still keen to get going again. When messages about A2's now-proven digestive advantages and the benefits to autism sufferers are picked up by US consumers via the media, as they have been in Australia despite constraints there on a2MC actually promoting its health benefits, sales should follow. These benefits were not really known or scientifically documented back in 2007, hence consumer ignorance at that time.

Snoopy

28-02-2015, 03:20 PM

If Australian growth continues, and if the UK market becomes profitable and if they can replicate the success in other markets then we can justify a high valuation. There are a lot of ifs in that valuation. Yet nothing has fired, in profit terms, outside of Australia yet. And the capital expansion bin is bare.

This is where I totally agree with you. There are a lot of if's. Its a growth company. Of course there are plenty of ifs. If there wasn't the price would not be where it is now.

If we take the latest Forsyth Barr report at face value, then if the UK and China and the USA all go according to plan then the share is worth $1.24 (fair value). But this outcome depends on the UK and China going earnings positive to fund the US growth.

If say the chance of success in the UK is 75%, the chance of success in China is 75% and the chance of success in the USA is 50% (after all A2 have had one failed attempt there), then all of these probabilities must be muliplied together to get the chance of overall success.

0.75 x 0.75 x 0.5 = 0.28

So the fair value price to pay today based on Forsyth Barrs conquered USA assessment is:

0.28 x $1.24 = 35c

The price that is worth paying will increase if the business strategy plays out completely. But an ATM price in the mid 50s is far too high to pay now, given the risks going forward.

Personally I prefer to buy my investments at below fair value. 28c is 20% below fair value of 35c. So that's when I start getting interested. Right now from where I sit, ATM is just another grossly overvalued growth share.

SNOOPY

drcjp

28-02-2015, 04:23 PM

Not a fan of Tobins Q then eh Snoopy?

mfd

28-02-2015, 05:24 PM

If we take the latest Forsyth Barr report at face value, then if the UK and China and the USA all go according to plan then the share is worth $1.24 (fair value). But this outcome depends on the UK and China going earnings positive to fund the US growth.

If say the chance of success in the UK is 75%, the chance of success in China is 75% and the chance of success in the USA is 50% (after all A2 have had one failed attempt there), then all of these probabilities must be muliplied together to get the chance of overall success.

0.75 x 0.75 x 0.5 = 0.28

So the fair value price to pay today based on Forsyth Barrs conquered USA assessment is:

0.28 x $1.24 = 35c

The price that is worth paying will increase if the business strategy plays out completely. But an ATM price in the mid 50s is far too high to pay now, given the risks going forward.

Personally I prefer to buy my investments at below fair value. 28c is 20% below fair value of 35c. So that's when I start getting interested. Right now from where I sit, ATM is just another grossly overvalued growth share.

SNOOPY

You've not added the Australian arm there. I think you've suggested a share price in the 20s for the Australian business, lets say 25c. $1.28 - 0.25 = 1.03 for rest of the world. Taking your probabilities,

$1.03 * 0.28 = 0.29

0.29 + 0.25 = 0.54 total

Doesn't take much more optimism to justify the current SP.

Snow Leopard

28-02-2015, 06:37 PM

...If say the chance of success in the UK is 75%, the chance of success in China is 75% and the chance of success in the USA is 50% (after all A2 have had one failed attempt there), then all of these probabilities must be muliplied together to get the chance of overall success.

0.75 x 0.75 x 0.5 = 0.28

So the fair value price to pay today based on Forsyth Barrs conquered USA assessment is:

0.28 x $1.24 = 35c

...

Pretty confident that multiplying those probabilities together is not valid there Snoopy.
A more sensible approach would be to take some sort of weighted average of the three numbers.

Best Wishes
Paper Tiger

Disc: A2 UK have promised me some discount vouchers but I am not influenced by such bribery.

blackcap

28-02-2015, 06:48 PM

Pretty confident that multiplying those probabilities together is not valid there Snoopy.
A more sensible approach would be to take some sort of weighted average of the three numbers.

Best Wishes
Paper Tiger

Disc: A2 UK have promised me some discount vouchers but I am not influenced by such bribery.

Yeah multiplying those probabilities is so wrong. Could not work out what Snoopy is thinking there. The markets are mutually exclusive and each has their own probability of success. WA is definitely better.

Snow Leopard

28-02-2015, 07:45 PM

blobbles

28-02-2015, 10:53 PM

Running with the earlier post and boring the pants off everybody (and that is despite not listing any assumptions):

7148

What the 0.28 (28%) represents is the probability of Success in all three markets.

Success in any two markets has a probability of nearly 47%.
Single market success is nearly 22%
and abject failure across the 3 is 3%.

I expect lots of meaningful discussion based on these figures :D

Best Wishes
Paper Tiger

Ha haa, yes, well. Besides the mathematical problems of basing guesses on flawed methodology and flawed assumptions... actually the whole idea is too flawed to start with. But I will play your game. WARNING: The following contains a lot of guesses, I haven't done enough research yet. Can anyone tell me ATM's revenue per LITRE?

How do you define "success" in any of the markets? Is success grabbing the same market share as in Australia and anything worse considered failure? Because I can tell you, if you grabbed 1% of the UK market, 0.5% of the Chinese market (in fresh milk/UHT/Baby Powder) and 0.5% of the US fresh milk market... they would probably have ~$600m in revenue from just those markets. Not sure I would consider that failure!

The above is based on:
1% of the UK market and you are looking at 50m L per year (based on milk consumption of 1.5L per week per person, 64m people) = ~$100m revenue
0.5% of the Chinese market probably represents 135m L per year (based on 0.4L per week per person, 1.3b people) = ~$250m revenue
0.5% of the US market probably represents 125m L per year (based on 1.5L per week per person, 318m people) = ~$250m revenue

(By the way, this is by volume, it assumes ATM currently have ~3% of the Aus milk market BY VOLUME, and are receiving $2 per litre)

If you can get only a little bit of market share in these countries you can make a LOT of money. And with a lot of rich people in all of these countries willing to pay a premium for a healthier product... well...

These figures approximate with others?

Anyway, say you are using your flawed methodology, 600m * ~40% probability = 240m revenue. Plus Aus = ~$390 revenue?

What happens if they replicate Australia in the UK though? 3% of the market by volume would represent $300m in revenue in just one market. Jeez.

dodgy

01-03-2015, 12:28 PM

Ha haa, yes, well. Besides the mathematical problems of basing guesses on flawed methodology and flawed assumptions... actually the whole idea is too flawed to start with. But I will play your game. WARNING: The following contains a lot of guesses, I haven't done enough research yet. Can anyone tell me ATM's revenue per LITRE?

How do you define "success" in any of the markets? Is success grabbing the same market share as in Australia and anything worse considered failure? Because I can tell you, if you grabbed 1% of the UK market, 0.5% of the Chinese market (in fresh milk/UHT/Baby Powder) and 0.5% of the US fresh milk market... they would probably have ~$600m in revenue from just those markets. Not sure I would consider that failure!

The above is based on:
1% of the UK market and you are looking at 50m L per year (based on milk consumption of 1.5L per week per person, 64m people) = ~$100m revenue
0.5% of the Chinese market probably represents 135m L per year (based on 0.4L per week per person, 1.3b people) = ~$250m revenue
0.5% of the US market probably represents 125m L per year (based on 1.5L per week per person, 318m people) = ~$250m revenue

(By the way, this is by volume, it assumes ATM currently have ~3% of the Aus milk market BY VOLUME, and are receiving $2 per litre)

If you can get only a little bit of market share in these countries you can make a LOT of money. And with a lot of rich people in all of these countries willing to pay a premium for a healthier product... well...

These figures approximate with others?

Anyway, say you are using your flawed methodology, 600m * ~40% probability = 240m revenue. Plus Aus = ~$390 revenue?

What happens if they replicate Australia in the UK though? 3% of the market by volume would represent $300m in revenue in just one market. Jeez.

Hi blobbles,
As you said all is just a guess, a crap shoot, no better than 50% success at best. However one of your assumptions has to be provable fact to lend any credibility to any other assumption. "a healthier product" . Yes? Is this an indisputable fact - back by absolutes?
Please enlighten me - not rumor or implied efficacy.
Thanks in advance.
-dodgy
discl : not holding at present

Snoopy

01-03-2015, 12:35 PM

You've not added the Australian arm there. I think you've suggested a share price in the 20s for the Australian business, lets say 25c. $1.28 - 0.25 = 1.03 for rest of the world. Taking your probabilities,

$1.03 * 0.28 = 0.29

0.29 + 0.25 = 0.54 total

Doesn't take much more optimism to justify the current SP.

You are mixing two methods of analysis there mfd. I had not forgotten the Australian arm. I considered it 100% conquered.

So perhaps instead of what I did write, I should have written:

If say the chance of success in Australia is 100% (they have successed already) the chance of success in the UK is 75%, the chance of success in China is 75% and the chance of success in the USA is 50% (after all A2 have had one failed attempt there), then all of these probabilities must be muliplied together to get the chance of overall success.

1.0 x 0.75 x 0.75 x 0.5 = 0.28

Same result.

SNOOPY

PS That 22.5c (my post 3070) I quoted for Australia only was assuming they abandoned their expansion plans in China, USA and UK. Yoou can think of it as a 'lower bound' valuation, should all the overseas markets turn to custard.

Snoopy

01-03-2015, 12:52 PM

Pretty confident that multiplying those probabilities together is not valid there Snoopy.
A more sensible approach would be to take some sort of weighted average of the three numbers.

Yeah multiplying those probabilities is so wrong. Could not work out what Snoopy is thinking there. The markets are mutually exclusive and each has their own probability of success.

I think you guys need to do some more thinking. The US, UK and China markets may be independent. But the ATM business plan to get into those markets is not country market independent.

The ATM business model is to use the cash generated by one market to conquer the next. A2 have zero earnings (by design) and their asset base is rapidly dimiinishing. That means ATM has no borrowing capacity. Every step of the business plan needs the previous step to succeed. If the Australian market fell over tomorrow (not that I think it will), then ATM as a company (not A2 milk as a product, a different thing) is finished. Doesn't matter how well China, the UK and the USA are going. Shareholders lose all their money. IOW my quick and dirty analysis, multiplying those three market success probabilities together, is correct.

'some sort of weighted average of the three numbers' might work if ATM had the capital to support an attack on three markets simultaneosly. But they don't. Expansion is entirely dependent on cashflow form the Australian market and, for the next stage, cashflow from the UK market (if that ever gets positive).

SNOOPY

babymonster

01-03-2015, 02:05 PM

i think the multiplying is correct. In risk management, it is common to do that (multiplying individual risk) to get an overall risk level.

Leftfield

01-03-2015, 05:28 PM

Can't help thinking there are parallels between XRO and ATM. XRO established and market leader in Australia, Strong gains in UK and now launching into USA with so far questionable results yet great prospects. ATM also strong in Aus and UK, and about to launch into USA (again) and also China. It's going to be an interesting year for holders of ATM and maybe (like XRO) there will be a bit of turbulence in the SP until we see some good progress.

Disc; small holder, like the product, yet consider it a risky part of my portfolio.

Baa_Baa

01-03-2015, 05:41 PM

... XRO established and market leader in Australia ...

Would you bring that over the XRO thread with some evidence?

MAC

01-03-2015, 06:18 PM

I'll have a go,

It's a discussion that’s been had many times on the thread already actually Dodgy if you have time and patience for a look back, I'll take it straight to the end game for you.

a2mc have over 100 studies demonstrating the benefits of a2 milk, some nutritionists and healthcare folk refute some of that evidence, fair enough, although last year a2mc did successfully complete a double blind human trial and have further human trials planned.

But, all that is much less important than the existence of the debate itself.

It's a debate that's been going on for 10 years thus far and may well have another 10 years to go, long may it continue.

The more debate, the more awareness, the more profile it gets by wellness and health interests, the more folk that are prepared to say, I'll give that a2 milk a go for myself.

Debate --> Awareness --> Sales

It's an equation that has seen revenues growing at an average of 40% pa for the last four years, and there are a lot more markets yet to open and products yet to launch.

It’s not the purpose of a2mc to replace a1 milk, they market and sell into a value added premium milk market.

Achieving close to 10% of all fresh milk sales in Australia, and that’s not 10% of the premium market, that’s 10% of the entire milk market, demonstrates that although all international markets are slightly different, their prospects in the very similar UK and US markets is very promising to say the least.

a2mc have competent marketing folk if you should you check their credentials, an entry into the US market will have been predicated with a lot of on the ground market research and discussion with the three retail supermarket chains they have already contracted with.

MAC

02-03-2015, 09:34 AM

I reckon that Californian’s, whom are generally labelled as being open minded wellness and health conscious folk, have the potential to take to a2 milk as readily or possibly even more so than Australia did;

http://www.foodnavigator-usa.com/Manufacturers/a2-milk-to-make-US-debut-in-California-in-April

California itself alone is roughly the same market size as Australia, with yet another Australian size market within the immediate bordering states.

The US price points offer similar margins over ‘home brand milk’ to that in Australia, and they are entering with four fresh milk products, not something they achieved in Australia until quite recently, geographically, there should be lower distribution costs than Australia also.

On a risk/reward basis, this may well prove to be a damn fine investment for just NZ$20M. That investment spread over three years suggests a2mc anticipate US segment profitability as soon as FY18.

Success doesn’t happen through random probabilities, it happens through good management, researched on the ground market analysis, competitive advantage, and applied business strategies.

AUSTRALIA:
Population: 23.1M
Annual drinking milk consumption: 2.541 billion litres

CALIFORNIA:
Population: 38.8M
Annual drinking milk consumption: 2.952 billion litres

SURROUNDING STATES:
Population: 30.4M
Annual drinking milk consumption: 2.345 billion litres

see weed

02-03-2015, 01:40 PM

Another million gone through, up 2c:t_up:.

bull....

02-03-2015, 01:53 PM

http://www.asx.com.au/asxpdf/20150302/pdf/42wzzd0hxk49ty.pdf

pg 17 freedom foods reclassifies a2 as investment for sale

Snoopy

02-03-2015, 02:06 PM

http://www.asx.com.au/asxpdf/20150302/pdf/42wzzd0hxk49ty.pdf

pg 17 freedom foods reclassifies a2 as investment for sale

A true statement bull, but a very misleading series of words nevertheless

"During the period, the Company reclassified how it accounts for the investment in a2MC. This resulted from the resignation of Mr P R Gunner from the a2MC Board in November 2014 and the determination by the Group that it no longer was able to clearly demonstrate that it exercised significant influence over a2MC. Significant influence was deemed to be lost at the conclusion of the a2MC AGM and therefore on this date the group has reclassified the investment to an Available for Sale investment (AFS) under the requirements of AASB 139 Financial Instruments: Recognition and Measurement."

Looks like it is just an accounting standard requirement that has lead to A2s reclassifiaction.

"As a result, the Company intends to maintain a strategic shareholding in the medium term, while retaining the option to realise capital from the investment to support growth opportunities."

So actual position is no different to how it was before.

SNOOPY

bull....

02-03-2015, 02:10 PM

i take it that they cannot take - over a2 anymore so they are saying we will reclasify the investment as just that an investment which can be brought or sold - just my interpretation naturally everyone reads things differently thats what makes the market

bull....

02-03-2015, 02:16 PM

anyway you should all be happy as now milford and acc have ensured it remains a nz company now.

Harrie

02-03-2015, 02:20 PM

http://www.asx.com.au/asxpdf/20150302/pdf/42wzzd0hxk49ty.pdf

pg 17 freedom foods reclassifies a2 as investment for sale

Yes but also intends to keep a strategic holding, question is what is that likely to be.
Also they say on the outlook page that a2mc provide freedom food shareholders a significant value creation opportunity.

Bit of a mixed message here. best bet is that they "may" sell a2mc if the price is right and also dependant on whether they can utilise the proceeds into a better investment opportunity where they receive a better return on funds employed than they get from a2mc.

Worth noting that they also said this a year ago but have maintained their holdings.

bull....

02-03-2015, 02:22 PM

therefore on this date the group has reclassified the investment to an Available for Sale investment (AFS) under the requirements of AASB 139 Financial Instruments: Recognition and Measurement."

this key statement so you probably right if the price right or better investment comes up they might sell

Harrie

02-03-2015, 02:44 PM

Actually, when you get statements that need to be made as a requirement to meet certain statutory reporting obligations, and put those agaist statements such as: " provide freedom food shareholders a significant value creation opportunity" and "intends to keep a strategic holding", it seems more unlikely that they are about to give up that investment opportunity anytime soon IMO.

MAC

02-03-2015, 03:07 PM

Australia and California are quite similar markets, sure uniqueness’s, but as far as global diversity goes they have enough in common to suggest the Australian business model will do quite well.

Both have a big focus on wellness and health internet sites, both have a western culture of relatively high milk consumption per person, they have similar levels of affluence and disposable income, and they both have a growing emphasis on healthy options as a lifestyle choice.

Both geographical areas presently have almost completely a1/a2 dairy herds, and they have quite similar population relationships between heart disease, other conditions and beta casein intolerance.

http://www.betacasein.org/index.php?p=science-overview

7160

MAC

02-03-2015, 03:47 PM

Actually Cali is far ahead of Aus - McDonalds did salads and chicken burgers there long before they were offered elsewhere :-)

And perhaps KW, it may just take one or two wellness focused Hollywood celebs to mention in passing at some function or another that they have tried a2, and boom, a2 milk might fly off the shelves faster than wrinkle cream.
:)

babymonster

02-03-2015, 05:24 PM

Close unchanged. I was hoping at least 58c

Jasemc

02-03-2015, 05:28 PM

still to much big seller.

blobbles

02-03-2015, 06:09 PM

Close unchanged. I was hoping at least 58c

Yeah, spent most of the day at 58-59c (big trades @58.5) then closed at 57... big seller still in control...

Tsuba

03-03-2015, 05:38 AM

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=DACFB142-9E95-FE96-25C576B5E0CD563E

babymonster

03-03-2015, 07:08 AM

I m happy with the target... Still a lot of challenges ahead but looks promising.
http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=DACFB142-9E95-FE96-25C576B5E0CD563E

sb9

03-03-2015, 08:00 AM

I think until it breaks thro' the 60c mark, it might flirt around 57-59c range...

MAC

03-03-2015, 08:59 AM

Last September a2mc told us that they had just initiated the new fresh milk airfreight market to China.

Just last week they told us that they had already become the largest fresh milk supplier to China, I think it’s fair to say then that they are successfully on track thus far.

I reckon fresh milk sales to china will add $6M in revenues to the FY15 result, it may even make the China segment profitable at FY15, let’s see.

Fresh milk is now retailing in China for Y59 (NZ$12.35) was previously Y49 (NZ$10.26). ATM advice is “could be pushing toward three million litres for 2015, according to its Asian general manager, Phil Wohlsen” and “expects demand to at least double each year.”

http://adf.farmonline.com.au/news/ma...2/2713426.aspx (http://adf.farmonline.com.au/news/magazine/industry-news/general/demands-fresh-for-a2/2713426.aspx)

Success doesn’t happen through random probabilities, it happens through good management, researched on the ground market analysis, competitive advantage, and applied business strategies.

Estimated 2015 sales (ATM): 3,000,000 1 litre bottles
Retail Price (Jingdong): 49yuan = $10.1NZD per bottle

That’s annual internet sales revenues of 3,000,000 x 10.1 = $30.3M

The internet retail price in China would have probably been agreed by ATM to maintain a minimum gross margin after transport costs, Jingdong margins and overheads.

Let’s say that COGS overall are around 65%, as per fresh milk in Australia, it could well be a lot better than that given the opportunity value of the market, but that still provides roughly a minimum floor for net revenues = $10M

bull....

03-03-2015, 04:52 PM

looks like the same pattern happening again as numerous other times should know by the end of the week. anyway couldn't get over the 58c - 60c resistance

babymonster

03-03-2015, 07:35 PM

What pattern?

Xerof

03-03-2015, 08:02 PM

The seller who turns up at the end-of-day bun-fight, along with most other non-retail interests, where they (usually) provide the best liquidity and price discovery, during the closing auction

more an event than a pattern

these are not the plonkers who fiddle about all day with their bots, these are the BSD's :drool::drool:

bull....

04-03-2015, 07:46 AM

the pattern was after big news the price had big spike this followed by gradual sell down next two weeks to previous levels before news which would indicate around 50c - 51c this time.

MAC

04-03-2015, 08:52 AM

It’s going to be really interesting this ASX listing, not a capital raising, but AMP have got around 20M shares to offer to Australian investors, it might as well be an ‘IPO’ then by any other name.

For those whom haven’t caught up, AMP have to sell because they got dumped by the Super Fund and are moving from active to passive portfolio management, lucky Australians.

http://www.goodreturns.co.nz/article/976502488/rumours-amp-dropping-active-stance.html

Analyst price targets for ATM presently range up to 92c, and a hypothetical book build would be higher than those price targets.

Should be a fascinating watch to see how competitive it gets for that block of shares, a2mc is a very high profile company in Australia indeed, and a lot of funds are still diversifying away from mining interests.

A2mc are working with Goldman Sachs for the listing, one would presume that AMP are presently working hard behind the scenes with their Australian broker also.

I would not be surprised to see ATM list on the ASX shortly at over 80c actually.

ziggy415

04-03-2015, 09:27 AM

MAC

04-03-2015, 09:41 AM

My valuation for ATM is FY15 $1.10 actually,

The only substantive matter that has dropped the SP since March last year has been AMP selling into an illiquid NZX market, ATM is very tightly held.

AMP had 11% of the company when the SP was over 90c last year, they've been selling consistently ever since, down to 2.7% now, and in doing so dropped the SP to where it is now at about 60c.

My feel is that a2mc under pressure from the major shareholders, inc Freedom, have finally decided to remove the overhang and bring in keen Australian fundies to help AMP out through an ASX listing.

Once the AMP overhang is gone, what do you anticipate will happen ?

ziggy415

04-03-2015, 10:03 AM

so do you think freedom will look to sell down as well....im a believer in the A1 versus A2 debate so hoping the company does supply better service to nz market,its a bit of a pain haveing to go to different supermarkets to find A2 then only able to buy 2 litres...as for the sp...I started digging the hole at 76 cents and kept digging all the way down to 50 cents so do have a considerable holding so any upside will be appreciated

MAC

04-03-2015, 10:11 AM

I'll sell down one day too and take some profits, won't be anytime before the four year strategic plan to FY16 plays out.

I would anticipate that Freedom are content holders also until at least that time given they assisted in the capitalisation of that very strategic plan.

a2mc is a growth stock, many inc myself would be happy to hold until the company becomes cyclical, there's no sign of that at this time.

The US market should break even at FY18, and there's still plenty of growth potential beyond that point.

Harrie

04-03-2015, 10:17 AM

Not being negative, but that's a pretty positive spin Mac.
The fact is that AMP have dropped ~17m shares since October 2014. That sort of volume went through in just one day recently.
You would have to say that there are a heap more sellers out there than just AMP. Also it is possible that AMP will not sell all of their remaining shares. Going from active to passive management has nothing to do with growth stocks vs dividend producing stocks. You are either an active manager or a passive one irrespective of whether growth stocks or dividend producing stocks are held in the portfolio, (although passive management is usually related to "following the index"). Active management is all about being tactical. Absolute returns management is something else again.
So AMP is going passive may also include retaining some of the a2mc shares. AMP are obviously not the only sellers by a long way in my calcs!

MAC

04-03-2015, 10:35 AM

My calculator says an 11% sell down to 2.97%, from early last year to now, thus far, is around 53M shares sold in a little over a period of around 12 months.

That’s not the entire churn during that time of course, never said it was, it is though a pretty damn big overhang, clearly big enough in a very illiquid market to drop the SP directly and/or by down draft.

Not long to go now though, does anyone know what day is the ASX listing ?

babymonster

04-03-2015, 10:55 AM

No news yet.. Asx website has no information either. If its a new listing with another name, it should take a bit more time I guess.

blobbles

04-03-2015, 11:53 AM

I think I remember reading somewhere it can take up to 6 weeks from ASX listing application. So up to 6 weeks from 25th February... mid to late March is my guess, seems like it shouldn't be that difficult for a company that is already listed under a fairly similar legal environment.

blobbles

04-03-2015, 06:26 PM

Ahhh yes, the big dump at the end of the day. So very predictable. If only there was a way to make money off it?

The pattern is: See where it trades for almost the entire day. Wait for the buyers to build up to that level, take out all buyers to 1c below.

drcjp

04-03-2015, 07:23 PM

kizame

04-03-2015, 07:46 PM

Don't worry,this is only short term stuff,let them sell,at the end of the day the company is still doing what you bought them for.
Whether it's a steady slow climb when the selling ceases,or a big jump on news,the shareprice will reflect the potential in the end.

babymonster

05-03-2015, 10:03 AM

bid for 55c and ask for 58c.. just starting the trading day.. good luck guys...

sb9

05-03-2015, 10:07 AM

bid for 55c and ask for 58c.. just starting the trading day.. good luck guys...

Lets see who blinks first...

JohnnyTheHorse

05-03-2015, 10:15 AM

ziggy415

05-03-2015, 10:23 AM

Expect ASX listing announcement late next week, or early the week after. Unlike other NZ companies to list on the ASX in recent times, I'd be expecting ATM to do quite well on it as it is a prominent brand over there, and a good diversification from mining.

any idea how its going to work...as far as i see no new shares are issued so can nz holders sell on aussie market

see weed

05-03-2015, 10:29 AM

any idea how its going to work...as far as i see no new shares are issued so can nz holders sell on aussie market

The broking houses have got that covered.

babymonster

05-03-2015, 10:54 AM

Lets see who blinks first...

still no blink... very calm...

ziggy415

05-03-2015, 11:15 AM

The broking houses have got that covered.

so the broking houses have an unfair advantage.....they havent asked me if id like to sell some to the Aussies

MAC

05-03-2015, 11:28 AM

Here’s the ASX listing 'information memorandum'

http://www.asx.com.au/asxpdf/20150303/pdf/42x15kkb6r15k0.pdf

sb9

05-03-2015, 01:50 PM

Back in the downward trend....again

Harrie

05-03-2015, 02:49 PM

see weed

05-03-2015, 03:08 PM

Here’s the ASX listing 'information memorandum'

http://www.asx.com.au/asxpdf/20150303/pdf/42x15kkb6r15k0.pdf

Too much to read. I'll take your word for it. Would have to be positive would'nt it?

ziggy415

05-03-2015, 03:11 PM

Too much to read. I'll take your word for it. Would have to be positive would'nt it?

i read it and still dont see where the shares are comin g from....bit like advertising A2 milk for sale but we havent actually got any cows

ziggy415

05-03-2015, 03:13 PM

but thanks anyway Mac it was a good read....lucky it was a quiet day at work

see weed

05-03-2015, 03:24 PM

Back in the downward trend....again

Good aye. Sold a bunch 2 days ago i'd bought 3 weeks ago at 3000 profit. come on 45c for another run:t_up:.

Snoopy

05-03-2015, 03:39 PM

How do you manipulate the market and get discounted shares you want to own if you are a big institution like acc or NZ gov't superfund.
Here is a theory. Appoint a manager like AMP capital, provide them with large amounts of funds to go on a merry share buying spree including "growth" stocks, which are relatively less liquid, fire them as a manager and ask for your cash back. The manager is then forced into selling, depressing the price.
The institution then picks up the same shares up at heavily discounted prices c/f to what they were purchased for by the manager, as the cash starts rolling in from the selldown. Possible?

One bit of your theory is inconsistant. If one big seller can artificially push down a share price of an illiquid share (a seller such as AMP), why wouldn't this same effect manifest itself in reverse? Surely AMP would have artificially pushed up ATM the share price originally when they bought their large holding? How can one shareholder artificially push down a share price without artificially pushing it up going the other way? I am suggesting here that ATM at 90c was always an artificial price.

SNOOPY

MAC

05-03-2015, 03:45 PM

I don’t bother to comment on short term matters much, but it would seem most probable Ziggy don't you think that around 15M to 20M shares will come from AMP and go to Australian investors, funds and/or brokers on or shortly after listing day.

AMP will undoubtedly be working behind the scenes right now with whatever Australian broker they have to solicit the best possible off market (ASX) deals they can.

It will be interesting so see what price premium that competing Australian interests will be prepared to pay for a block of shares like that in taking up an initial position.

It will be a pleasure for shareholders to have the overhang lifted, and a drift back to valuation also.

blobbles

05-03-2015, 05:04 PM

Boom, regular as clockwork, take out orders to 1c below todays starting price. So predictable, the same pattern played out over the past few weeks/months.

As a tip to people looking to invest in ATM ATM (???? ATM At The Moment!): Wait until the current seller runs out. Will be good buying and will occur probably not long after the ASX listing. Keep an eye out for an SSH notice and your finger on the button when it happens!

babymonster

05-03-2015, 05:24 PM

Errr, so frustrated

MAC

05-03-2015, 05:37 PM

Errr, so frustrated

Just relax, there’s literally years of growth ahead, and valuations will be recognised and will grow commensurately too.

AMP have to sell at a whatever price to meet their new policy objective, if it happens that such an event drops the shareprice of such a prospective company as a2mc by 43%, then one may look at that as a gift.

Anyway, what happens to a rubber band when pulled down and released ?

drcjp

05-03-2015, 06:49 PM

Yep, just a bit more patience.
whoever is doing this is a) not there at NZ8am and b) timing it to run out in the next 4-5 weeks

its a classic, dull and uninspiring shaking the tree.

they must be grumpy, wonder why? Bwah hahahahaha

mattwanz

05-03-2015, 07:46 PM

http://quotes.morningstar.com/stock/analysis-report?t=XNZE:ATM&region=nzl&culture=en-US&productcode=MLE&cur=

Harrie

05-03-2015, 11:58 PM

Well, the 5 O'clock boys are still in town it seems. Blobbles is right on the button with a trend that has been going on for quite some time. Let the buyers build up and then hit every buy order at the current price and also buyers 1c below at the end of the trading day. This sort of trend will act to make buyers a little nervous IMO. Unfortunately SP will continue to drift down until the sellers have nothing more to sell.
It looks to me that there are more sellers than just AMP and worse it appears that they are willing to sell preferably at anything above 50c but lower if that's what it takes to eradicate the stock from the portfolio. That all looks like institutional selling from placements made at 50c when A2mc listed on the main board a couple of years ago. That leads nicely into what Mac has mentioned above and that is when a fund manager has made a decision to sell they prefer to expedite orders as quickly as practical. The trend looks a lot like that.
If selling is because of portfolio realignment with current fund management philosophy, and nothing to do with fundamentals then we are short term losers and long term winners all things being equal.
Morningstars fair value assessment of 0.70 is encouraging too.

kizame

06-03-2015, 09:12 AM

If you look at the behaviour of FSF and SML and compare the charts to ATM,you will see there is a close correlation between their performances lately,milk is not flavour of the month right now,that will change,so until there is either very positive news from ATM or milk prices rise again,I think we will drift.

kizame

06-03-2015, 10:00 AM

not sure if you know what you are talking about kizame............ SML and ATM won't be adversely effected by low milk prices.......if anything they will benefit by way of bigger margins.
Likewise if farm gate milk prices go up they will face a negative margin squeeze.
There most certainly is no benefit for ATM if farm gate milk prices go up.

snapiti read what I wrote, I'm talking about the charts of all three,not margins.
If you look at those 3 charts,then you will see the similarities in price trend,to maybe most out there (unless there is bullish news by one or other)they tend to be placed in the same basket regardless of what they do.This seems to be the case.

babymonster

06-03-2015, 02:29 PM

back to 56c atm... fingers crossed..

sb9

06-03-2015, 03:19 PM

back to 56c atm... fingers crossed..

Looking at the depth, all I can say is 54c written all over it by the time 5pm rolls around....

kizame

06-03-2015, 04:13 PM

Looking at the depth, all I can say is 54c written all over it by the time 5pm rolls around....

Yep 54c by 5pm but some good volume though,only thing is if it ends up at 53c the volume has a dramatic effect on OBV on the charts.
But par for the course.

blobbles

06-03-2015, 05:05 PM

Seller took the end of the day off. Wonder if that is also a pattern? Friday drinks? Out on the harbour in a yacht? Down at the golf course? Probably one of these...

Harrie

07-03-2015, 11:37 PM

Seller took the end of the day off. Wonder if that is also a pattern? Friday drinks? Out on the harbour in a yacht? Down at the golf course? Probably one of these...
Maybe, but more likely that the 5pm boys have made a strategic move by letting the price build up in the next couple of days and by the end of the week hit the buyers and those 1c or 2c below whatever the last traded price was. They don't want to frighten off any intending buyers by going in too overtly.

NT001

08-03-2015, 11:40 PM

It looks like the anticipated Australian listing of a2MC could be well timed to coincide with a shift in investor sentiment away from mining and in favour of the ag sector. Here are selected paragraphs from an article in The Australian that is possibly paywalled for some.

IF Melbourne stockbroker Hugh Robertson had any doubts that agricultural and food companies had become the new favourite of the stock exchange, they were quickly erased this week.

“Agriculture is unquestionably the new ‘cool’ in the market and it’s not all that surprising. It’s something this country does really well, is sustainable and, with the world running out of food, you couldn’t wish for better macro settings,” says Robertson.
“We are starting to see a sea change among some of the smartest individual investors moving into the sector, and when that happens you know other investors will follow hook, line and sinker.”

There is no doubt that the eyes of savvy investors are already *focused on the floats flagged in the sector for this year....

A2 Milk, with a health-linked brand that is the envy of every other milk processor, is “seriously contemplating” a listing this year to fund its expansion.

iceman

09-03-2015, 07:26 AM

Thanks NT001. Yes the timing is probably good for an ASX listing and hopefully it will provide some support for the lagging SP. Not quite right what they say though about "listing to fund its expansion". As far as I understand it, they will not be raising any funds from the listing !

It looks like the anticipated Australian listing of a2MC could be well timed to coincide with a shift in investor sentiment away from mining and in favour of the ag sector. Here are selected paragraphs from an article in The Australian that is possibly paywalled for some.

IF Melbourne stockbroker Hugh Robertson had any doubts that agricultural and food companies had become the new favourite of the stock exchange, they were quickly erased this week.

“Agriculture is unquestionably the new ‘cool’ in the market and it’s not all that surprising. It’s something this country does really well, is sustainable and, with the world running out of food, you couldn’t wish for better macro settings,” says Robertson.
“We are starting to see a sea change among some of the smartest individual investors moving into the sector, and when that happens you know other investors will follow hook, line and sinker.”

There is no doubt that the eyes of savvy investors are already *focused on the floats flagged in the sector for this year....

A2 Milk, with a health-linked brand that is the envy of every other milk processor, is “seriously contemplating” a listing this year to fund its expansion.

sb9

09-03-2015, 03:24 PM

Buckle up for another bumpy ride this week.....downtrend forming :confused:

babymonster

09-03-2015, 04:24 PM

Yes, hopefully the 5pm boy won't push it down further.
Buckle up for another bumpy ride this week.....downtrend forming :confused:

MAC

09-03-2015, 09:06 PM

http://www.examiner.com/article/the-new-a2-milk-makes-its-debut-at-natural-foods-expo-west

NT001

09-03-2015, 10:33 PM

http://www.examiner.com/article/the-new-a2-milk-makes-its-debut-at-natural-foods-expo-west

Well, examiner.com is not exactly the New York Times but it does apparently get quite a lot of viewers, so on the basis that all publicity is good publicity, this won't have hurt a2MC and its A2 milk message one bit. It's actually a kind of alternative news blogsite that pays for contributions even from untrained journalists, so it's not surprising perhaps that this article contains the odd factual inaccuracy. Such as saying that cow populations originally had a mix of A1 and A2 protein, when the whole point about A2 is that it was the original milk, before A1 came along through a chance genetic mutation and created havoc in cows milk. But hey, the writer got quite a bit of the explanation right and it's a complex subject for newbies, so let's give credit where it's due.

It's good to see that a2 milk is getting noticed at the Anaheim natural foods expo, and there was one little detail in the article that stood out: the company is aiming to have a2 milk on the Californian market "within the next couple of months". Great.

MAC

10-03-2015, 11:44 AM

Has anyone a commentary update from Craig’s,

This time last year they initiated coverage with a price target of 90c

I understand following the recent HY a couple of weeks ago they increased their price target back to 92c

http://www.odt.co.nz/news/business/297765/genuine-opportunities-a2-milk

see weed

10-03-2015, 12:11 PM

I have a good gut feeling about a2 milks future:t_up:.

silu

10-03-2015, 12:40 PM

I've been waiting for an entry point for quite some time now. Still waiting.

MAC

10-03-2015, 01:19 PM

The US website’s gone live, looks well, just like all the others really;

http://www.a2milk.com/products/

see weed

10-03-2015, 01:53 PM

I've been waiting for an entry point for quite some time now. Still waiting.

Depends on what price you want to pay. If you want to pay 60c then keep on waiting. Personally, I got excited on 2/7/14 and bought my first lot at 69c and have bought 26 more lots since then from 69c down to 47c. Just scored 37,000 this morning, must be crazy:eek2: but hay, as I said, there is a good feeling in my see weed gut. I like the scatter gun approach:).

see weed

10-03-2015, 02:25 PM

If sp goes down buy more. If good ASX listing report comes out and share price starts going up, buyers will still buy more. My niece inlaw living in Melbourne told me on the weekend that she sees a lot of a2 milk addvertising on tv. Thats another reason why my gut tells me every man and his cat will want their glass full of the a2 company. Not to mention woman and their kitty's , they'all be in like a rat up a drawn pipe:D.

Harrie

10-03-2015, 03:03 PM

Xerof

10-03-2015, 03:30 PM

Hmmm, ATM, Synlait and Fonterra all together in a trading halt......

sb9

10-03-2015, 03:30 PM

Yes a trading halt:

https://www.nzx.com/files/attachments/209428.pdf

Takeover or ASX listing ?

Also, SML and FSF placed in trading halt...hmmmm wonder what's the connection might be....

hilskin

10-03-2015, 03:31 PM

Very interesting indeed. :-)

Jasemc

10-03-2015, 03:35 PM

Investigation maybe?

bull....

10-03-2015, 03:42 PM

china bans nz milk pending investigation?

Xerof

10-03-2015, 03:42 PM

A press conference by NZ Police and Min of PI according to the halt on ASX

Threats to contaminate formula from 1080 protesters

bull....

10-03-2015, 03:44 PM

nz dollar flucuating wildly on this news

Jasemc

10-03-2015, 03:47 PM

Yes stuff says signifacnat announcemet 3.45

noodles

10-03-2015, 03:47 PM

http://www.mpi.govt.nz/news-and-resources/media-releases/mpi-supporting-police-with-infant-formula-contamination-threat-response/

relief. Not foot and mouth

trackers

10-03-2015, 03:47 PM

A press conference by NZ Police and Min of PI according to the halt on ASX

Yup this ^

goldfish

10-03-2015, 03:47 PM

Hope not foot n mouth

westcoaster

10-03-2015, 03:47 PM

http://www.nzherald.co.nz/business/news/www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11414980

MAC

10-03-2015, 03:48 PM

china bans nz milk pending investigation?

Well at least ATM wouldn't have much if any exposure, it's only around 1% of (infant formula) revenues, the a2 fresh milk to China is sourced from Australia.

iceman

10-03-2015, 03:48 PM

A threat to contaminate baby milk formula. Blimmin nutters

stoploss

10-03-2015, 03:49 PM

http://www.nzherald.co.nz/business/news/www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11414980

And Stuff

http://www.stuff.co.nz/national/67183655/police-reveal-threat-to-poison-baby-formula

bull....

10-03-2015, 03:50 PM

lol these things cause wild speculation a

iceman

10-03-2015, 04:50 PM

Just came from a trip to Countdown where they were emptying all shelves of all infant formula !

bull....

10-03-2015, 04:57 PM

yes could get worse - hope not but does add extra risk to theses stocks now

hilskin

10-03-2015, 05:06 PM

https://www.nzx.com/files/attachments/209444.pdf

https://www.nzx.com/files/attachments/209443.pdf

bull....

10-03-2015, 05:33 PM

reading the reports 31 march is the deadline to stop 1080 use or they will poison milk formula

robbo24

10-03-2015, 05:34 PM

yes could get worse - hope not but does add extra risk to theses stocks now

What's this I see? A buying opportunity based on other people's fear?

Robbo enters... :D:D

bull....

10-03-2015, 05:39 PM

people should know the risks

Joshuatree

10-03-2015, 05:52 PM

What's this I see? A buying opportunity based on other people's fear?

Robbo enters... :D:D

Thanks Robbo you pushed it up. You're a legend:D;)

Xerof

10-03-2015, 06:22 PM

Just came from a trip to Countdown where they were emptying all shelves of all infant formula ! only to put behind the counter for sale to customers, rather than put security guards with AK47's in the aisles. As robbo says, great buying on a decent dip, if there is one after the halt is lifted

babymonster

10-03-2015, 06:38 PM

Fuk those ppl who did this. My babies need milk... I will check carefully to see whether there is holes or cracks on the tins now.

NT001

10-03-2015, 06:51 PM

lets all be honest.
Price appreciation will only happen when the following come to fruition:
1. The 5pm boys leave town
2. UK gains over 1% of the market in the short term, the shorter the better in terms of market penetration expectations.
3. Sales are encouraging in the USA, the shorter time frame the better per above
4. Improved market penetration of baby formula and UHT and fresh milk into China
5. More scientific evidence of health benefits of a2 milk.
6. Margins are maintained

I'm expecting a small boost in SP when A2M is listed on the ASX but in order for it to be maintained all the above factors need to be a reality.
Until then speculation on a2's SP is futile

I think that's a bit arbitrary Harrie. It may be your list of essentials, but that doesn't make it fact. Most investors wouldn't even know if those criteria were being met. Whereas just a couple of good news stories in the Aussie media about sales in the UK, US, China or Australia or a new scientific finding could be enough to lift the SP. And once the Aussie listing goes into effect, I would have thought the market there might develop a self-generating dynamic that's not reliant on such specific analytical details but driven more by broader investor/broker perceptions and sentiment. Not to mention perhaps some news from the company itself.

The continuing overhangs in insto-held ATM stock and the news that the chairman is planning to sell down will also be potential factors as analysts pore over the Aussie listing. It's also not clear what the brokers are planning. If they're sitting on a stockpile of ATM shares as some reports have suggested, they'll be wanting to nudge the SP upwards. Not that I'm predicting a sudden big surge. Nor am I worried about the 1080 scare.