ATM - A2 Milk Corporation Limited

[gv1]

How much to punt in this one?

[JohnnyTheHorse]

A2 has been included into the NZX50!

https://nzx.com/files/attachments/172064.pdf

Shame it is at PGW's expense, but great news for A2 stockholders....

I've been patiently waiting for this. Should give the SP another boost.

On another note, I'm pretty impressed with the a2 marketing campaign in the UK. After bit of an issue, they have launched their "Try a2 milk for free" campaign. Anyone in the UK can sign up on Facebook for a voucher to get free a2 Milk at their local supermarket. They are certainly spending some coin on the campaign, which is very nice to see (money well spent in my eyes). IIRC, their Facebook likes have gone up a few thousand in the last week or so.

https://www.facebook.com/a2MilkUK?fref=ts

[gv1]

Thanks sparky. Great advise.



Punt nothing. Do your homework and invest wisely.[/QUOTE]

[Huskeez]

Think we might see it touch 59 today, that sell side is rather weak at the moment. Need more buyers above 55 though. Think some of those below 55 will start revising their bids as it dawns that the ceiling has been broken. NZX50 announcement will boost it as well. Anyone want to hazard a guess where this will top out? I don't, looks like its just getting ready for a good run!


Very good question moosie, will interesting to see what happens to the price considering those buy orders @.56 alone are enough to eat up the whole sell side altogether and then some!

[JohnnyTheHorse]

People stacked up at 55 and 56 are starting to up their price. 273k buy shares at 57 now. Should easily get to 58 today.

[Alz99]

Does anyone know where the A2 herds of cows are farmed?
Waikato is one producer also the BOP its possible to run a 50% mixture on any farm thou farmers know there cattle that produce that protein etc http://www.stuff.co.nz/business/farming/5967299/A2-Corp-continues-offshore-expansion

[lou]

Does anyone know where the A2 herds of cows are farmed? I have a feeling their herds are based in Australia as the newest milk processing plant is in Sydney, although the baby formula is to be produced in NZ if I remember correctly.

Reading about droughts and concerns around milk production in the news and the PGW thread makes me wonder if this will have any impact on A2 corp?

I've got a client of mine who is north of Workworth who is looking at converting to A2

[JohnnyTheHorse]

I've been trying to estimate what a "fair" SP should be, but am having some difficulty. Just wondering if anyone could add their two cents (Sparky?).

Looking at a couple of fundamentals:
Price/Sales ratio = 3.7 (based on a projected estimate of $100m full year sales)
PE ratio = 187

In my view, the P/S ratio is quite small for such a high growth company like ATM. Compare this to DIL and XRO, who have P/S of ~10 and ~20 (although this may be somewhat chalk and cheese). Could the low P/S ratio be attributed to the fact that the margins are likely to be much smaller? On the other hand, the PE ratio is extremely high. However, this is justified by their expenditure into growing the business very quickly. The fact that it is positive is always a good sign.

[lou]

I've been trying to estimate what a "fair" SP should be, but am having some difficulty. Just wondering if anyone could add their two cents (Sparky?).

Looking at a couple of fundamentals:
Price/Sales ratio = 3.7 (based on a projected estimate of $100m full year sales)
PE ratio = 187

In my view, the P/S ratio is quite small for such a high growth company like ATM. Compare this to DIL and XRO, who have P/S of ~10 and ~20 (although this may be somewhat chalk and cheese). Could the low P/S ratio be attributed to the fact that the margins are likely to be much smaller? On the other hand, the PE ratio is extremely high. However, this is justified by their expenditure into growing the business very quickly. The fact that it is positive is always a good sign.

ATM is trading on an idea/brand/technology. It is very hard to put sensible valuation on it. It will continue to be a growth stock for a number of years. I would bit my lip an hold on for the ride. Think of Xero 4 years ago.

[gv1]

Would drought have any effect on their earnings?

[JohnnyTheHorse]

Anyone notice that 1.8mil shares went in the first minute of trading this morning...? About a million of those off market, anyone have a hunch about who might be diving in/jumping ship?

Most likely just index based funds getting their holding up to the appropriate level before ATM's arrival on the NZX50 board on Monday.

[gv1]

Sparky did you make the fund managers pump up? Actually, I wanted to sell down but waiting now.

[JohnnyTheHorse]

Quite a big day for ATM, both price wise and volume wise (14.5m shares traded). I imagine the massive off market trades after close would have been the index funds readjusting their portfolios. Hopefully entry onto the NZX50 can push it back to its all time highs!

[Dej]

Superannyuation cease to be SSH:

For last disclosure,--


(a) total number held in class: 32,326,698


(b) total in class: 646,416,979


(c) total percentage held in class: 5.001% (Note relevant interests held


by Managers as follows: AMP Capital Investors (1.905%); Milford Asset


Management (2.379%); Devon Funds Management (0.206%); New Zealand


Superannuation Fund (0.511%))


For current holding after ceasing to have substantial holding:


(a) total number held in class: 30,992,266


(b) total in class: 646,416,979


(c) total percentage held in class: 4.794% (Note relevant interests held


by Managers as follows: AMP Capital Investors (1.905%); Milford Asset


Management (2.379%); New Zealand Superannuation Fund (0.511%))

[Dej]

And I'm sold out as of over the last three-four trading days. Took a big stake in Summerset over the weekend. Didn't need something quite as volatile in the portfolio when Summerset gave me growth but not with the same perceived risk.

Also, have DIL and PEB, so plenty of growth holdings already. Got an average of 59c per share, so nearly 20% since December.

I can't describe it rationally, but this stock gave me shivers. Just wasn't comfortable holding it, as you can see from my previous posts, and if there is a correction, it's the kind of stock that gets murdered.

The SSH statement from the NZ Super Fund is intriguing.

I got out at 59 over the past 1-2 days - Just needed the money more than anything, bills have to be paid. Nothing against the stock but the only next boost I can see in the forseable future is the release of any information on the infant formula. I have always been quite bitter about this stock due to the capital raising but happy(ish) now.

[JohnnyTheHorse]

I can't describe it rationally, but this stock gave me shivers. Just wasn't comfortable holding it, as you can see from my previous posts, and if there is a correction, it's the kind of stock that gets murdered.

Just curious, why do you think ATM would get hammered if there was to be a correction? I would think that the 50 cent support would be pretty darn solid considering the amount traded at and above that.

It has certainly been a fickle and frustrating stock in the last few months. It just cant quite truly break free and get on a run. I suspect that many holders have become frustrated and impatient (probably rightfully so), so money has been pouring out and going into the likes of PEB and the recent SKT and SUM placements. I live in hope that the sellers will dry up a wee bit and it will hit 70 cents soon, but we shall see.

[ratkin]

http://www.southernweekly.com.au/story/1311438/luddenham-farmer-to-re-enter-camden-show/?cs=1252

Here is a little article about an A2 farmer.

[westcoaster]

I understand the selldown by the major shareholders was to create liquidity in order for the company to qualify for a main board listing.

[Xerof]

Correct, and who potentially benefits most from this liquidity going forward?

nothing sinister inferred, just pointing out a side effect of their action

[JohnnyTheHorse]

http://www.stuff.co.nz/business/world/8485511/Aussies-lap-up-A-1-a-litre-milk

Article may be of some interest. Loads of sellers currently in the 58-60 cent range, but 57 seems to be bit of a support. Buyers appear to be slowly chipping through the sellers though - this reminds me of a month or two ago! MACD lines have crossed and RSI is heading down. Still confident that this is capable of producing some very nice returns, however whether this will occur soon or in months I have no idea. Main catalyst for a rise in price would be an announcement on the Chinese baby formula launch I'd imagine. Have stops in place at 55 cents, as if she starts heading back down I feel my money will be of better use elsewhere.

[westcoaster]

I think its still really only a matter of time until everyone gets it, for now imagine 4% of china http://www.heraldsun.com.au/news/national/sales-of-healthier-milk-on-the-rise/story-fncynkc6-1226589396777

[mcdongle]

Hi all you might find this interesting for this thread.

http://www.bbc.co.uk/news/business-22066243#

[JohnnyTheHorse]

Depth currently isn't looking too good. ~2mil sellers up to 60, yet only ~500k buyers from 51-56. Getting to the point where I may be sending my money elsewhere. Any of you chart experts got any views?

[Hoop]

Depth currently isn't looking too good. ~2mil sellers up to 60, yet only ~500k buyers from 51-56. Getting to the point where I may be sending my money elsewhere. Any of you chart experts got any views?


Not a chartist, but I gave up on A2 the other week as you can see.

From what I see of technicals:

MACD is trending down and divergent in a negative way

Bollinger Bands have narrowed, which have usually indicated a changing in trend (but which way?)

Money flow looks weak.

Squeezed BB with down trend often indicates either a reversal or a change of rate of the same trend......because TA indicators reflects past and present trading behaviour one should not be surprised to see weak technicals in this situation it is often the case ... divergences are always nice to see for it increases the odds but they are not a necessity in a reversal.

Which Way is the trend going to go and when???
Looking at the chart there seems to be a possible inflection point at 56c where the MA50 EMA200 trendline and the bottom BB band line are all lining up reducing the wiggle room for the ATM share price and will force the price to break out...Inflection points with a lot of players involved are powerful areas...Keep in mind that the 59 resistance line and the primary trendline are imitating an ascending triangle type of chart pattern (invalid). A valid Ascending triangle chart pattern pattern haa a 70% breakout upwards (Bulkowski) Mind you this is not a true ascending triangle pattern (invalid) so I would lower the breakout upwards odds from 70% also that 59c resistance line looks very strong as confirmed by the depth data........................but probably still odds on as it is a bullish pattern type.

Time will tell whether to buy or sell on which breakout direction

Disc" sold last week at 56c (6% profit)...reason: lowering the overall risk of my NZX portfolio by increasing my cash/equity ratio....

http://i458.photobucket.com/albums/qq306/Hoop_1/Atm110042013.png

[Whipmoney]

Which Way is the trend going to go and when???
Looking at the chart there seems to be a possible inflection point at 56c where the MA50 EMA200 trendline and the bottom BB band line are all lining up reducing the wiggle room for the ATM share price and will force the price to break out...Inflection points with a lot of players involved are powerful areas...Keep in mind that the 59 resistance line and the primary trendline are imitating an ascending triangle type of chart pattern (invalid). A valid Ascending triangle chart pattern pattern haa a 70% breakout upwards (Bulkowski) Mind you this is not a true ascending triangle pattern (invalid) so I would lower the breakout upwards odds from 70% also that 59c resistance line looks very strong as confirmed by the depth data........................but probably still odds on as it is a bullish pattern type.

Time will tell whether to buy or sell on which breakout direction

Disc" sold last week at 56c (6% profit)...reason: lowering the overall risk of my NZX portfolio by increasing my cash/equity ratio....

http://i458.photobucket.com/albums/qq306/Hoop_1/Atm110042013.png

Nice TA Hoop. What software/platform are you using for your charting?

[Hoop]

Nice TA Hoop. What software/platform are you using for your charting?

I use the free version of Incredible charts... I create my chart and save it to my computer as a picture file ...I then use the open source Paint.net software and add the extra lines, text, highlights, expand the canvas and inserts etc and save the edited picture file again ......I upload the picture file to photobucket to obtain an image code.... I then copy and paste the image code to my Post on ST.....It does take some time to do this :)

Sometimes I use Stockcharts (posting on the S&P500 thread) the free version shows the intraday stuff on Wall St exchanges.

The depth insert onto the chart above was done using Paint.net software....I just open a new paint.net program page then push the PrtScn button on my keyboard click the edit and paste the screen scan to the new page...I then cut the part I want from the screen and paste it onto the other program page containing the chart and resize the insert to fit....very quick and easy once you know how.

[janner]

I use the free version of Incredible charts... I create my chart and save it to my computer as a picture file ...I then use the open source Paint.net software and add the extra lines, text, highlights, expand the canvas and inserts etc and save the edited picture file again ......I upload the picture file to photobucket to obtain an image code.... I then copy and paste the image code to my Post on ST.....It does take some time to do this :)

Sometimes I use Stockcharts (posting on the S&P500 thread) the free version shows the intraday stuff on Wall St exchanges.

The depth insert onto the chart above was done using Paint.net software....I just open a new paint.net program page then push the PrtScn button on my keyboard click the edit and paste the screen scan to the new page...I then cut the part I want from the screen and paste it onto the other program page containing the chart and resize the insert to fit....very quick and easy once you know how.

A man after my own heart Hoop..

Keep it simple.. Keep it cheap.. We all would like to be Gordon Gecko.. But .. Sell... Buy ... Sell..
But come on !!.. We have to be realistic.. How often can we really do that.. ???

Take time to research.. Take time over decisions.. Make sure that all the boxes are ticked...

So you have to forgo a few parties .. A new Mercedes.. A wild weekend at ST Moritz.. A Bank Account in The Caymans...

AyyYaaa YAAAA... .. Must get back to the Interrrrrrrrrrrrrrrrrrrrrrrrrrrr... $$$$$$$$$$$$$$$$$$$$$$$

[Hoop]

A man after my own heart Hoop..

Keep it simple.. Keep it cheap.. We all would like to be Gordon Gecko.. But .. Sell... Buy ... Sell..
But come on !!.. We have to be realistic.. How often can we really do that.. ???

Take time to research.. Take time over decisions.. Make sure that all the boxes are ticked...

So you have to forgo a few parties .. A new Mercedes.. A wild weekend at ST Moritz.. A Bank Account in The Caymans...

AyyYaaa YAAAA... .. Must get back to the Interrrrrrrrrrrrrrrrrrrrrrrrrrrr... $$$$$$$$$$$$$$$$$$$$$$$

:D

yep...To earn the $$$$ in this game, life can sometimes be a bitch....

[Entrep]

I got out yesterday too for a small profit.

[janner]

Love the conviction though.

Moosie... Is Conviction Personified :-))

[JohnnyTheHorse]

Why hello there Mr 1 million share order at 55. Have been making progress through them sellers this past week, now only 1 million between 56-60.

[JohnnyTheHorse]

Fantastic huh? Been some big volumes the last few days. I suspect that 59 cents will be getting tested soon :t_up:. You still in or bought back in moosie?

[Hoop]

Considering it. My money is locked away in a certain growth company right now so waiting for that to pay dividends before I move on. Hopefully it happens before ATM takes off again!
.
.
.

lol, yes I know it's all quiet on the Western Front, that's what I'm afraid of! My historical mind is saying "history repeating, time to be very wary!"
you worry too much moosie

concentrate on your day job
If you knew me personally you'd see I'm one of the most laid back people ever. Tea time, so will go have a think about my day job ;)

Hmmm..what did you drink at tea time??...you didn't did you... ;);):D

[JohnnyTheHorse]

The guy buying 1 million shares has pushed his bid up to 57 :t_up:

[bonne vie]

New A2 infant formula heading to China (http://www.google.com/url?sa=X&q=http://www.voxy.co.nz/business/new-a2-infant-formula-heading-china/5/153219&ct=ga&cad=CAcQARgAIAAoATAAOABA-8LIiwVIAVgBYgVlbi1OWg&cd=kSri0LYBk6A&usg=AFQjCNFBQfoRx2qAA2MZqxvl03FjXsHmKA)
Voxy
New Zealand listed dairy company A2 Corporation (NZX:ATM) is ready to tap into the lucrative international demand for New Zealand made infant formula with ...




Maybe this will help the price along ( just when I sold half of my holding)

[JohnnyTheHorse]

Hopefully this can boost it through the 59 resistance and send it towards its former highs. MACD is getting close to crossing. Milford becoming an SSH again is a good sign too.

[Nigel]

New A2 infant formula heading to China (http://www.google.com/url?sa=X&q=http://www.voxy.co.nz/business/new-a2-infant-formula-heading-china/5/153219&ct=ga&cad=CAcQARgAIAAoATAAOABA-8LIiwVIAVgBYgVlbi1OWg&cd=kSri0LYBk6A&usg=AFQjCNFBQfoRx2qAA2MZqxvl03FjXsHmKA)
Voxy
New Zealand listed dairy company A2 Corporation (NZX:ATM) is ready to tap into the lucrative international demand for New Zealand made infant formula with ...




Maybe this will help the price along ( just when I sold half of my holding)

A good write up in todays NZ Herald too. Expect a bit of movement today as awareness spreads.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10878909

New A2 infant formula ready for China

NZX-listed alternative milk company A2 Corporation says the first consignment of its new infant formula brand will be shipped to the lucrative Chinese market next month, followed by distribution in New Zealand and Australian supermarkets soon after.

The company has appointed the China State Farms Holding Company Shanghai, a subsidiary of state-owned China National Agriculture Development Group Corp, as the exclusive Chinese distributor of its Platinum formula brand.

The formula will initially be sold in Beijing, Shanghai, Guangzhou, Tianjin and Chongqing before sales are progressively expanded to other major cities in mainland China, as well as Hong Kong and Macau, A2 says.

The company expects to be generating annual sales of $60 million in China by 2016.

In October, A2 announced a strategic agreement with Canterbury dairy processor Synlait Milk to manufacture A2-branded milk powders and infant formula at its facility in Dunsandel.

A2 sources its milk from cows that are selected to produce A2 beta-casein protein.


Managing director Geoffrey Babidge said A2 milk was more comparable to milk produced naturally by mothers than other beta-casein types.

The fallout from China's 2008 melamine scandal, in which several babies died after the toxic chemical was added to baby formula and milk powder, has driven a massive rise in demand for imported formula brands.

A2 shares closed at 57c on Friday.

[JohnnyTheHorse]

Have broken through the 59 resistance with ease. Big chunk of sellers at 60 (700k) so I wouldn't say we have broken free just yet. Not many sellers after that though!

[blobbles]

I would like to know if their product is arriving in China just as they send it from New Zealand or if it is being sent to Guangzhou /Shanghai first for "processing". This is because I know how Chinese do business here with other imported milk powder which is to take the imported powder in bulk, cut their own ingredients into it then repackage it for mainland customers. This makes them more money but of course introduces Chinese capitalism into the production chain, causing the addition of unknown elements into their product. Anyone know the answer to this or can call the company for clarification? Chinese people will pay top dollar for the real deal milk powder, but anything that has been processed in China they will be highly sceptical of.

[Dej]

I would like to know if their product is arriving in China just as they send it from New Zealand or if it is being sent to Guangzhou /Shanghai first for "processing". This is because I know how Chinese do business here with other imported milk powder which is to take the imported powder in bulk, cut their own ingredients into it then repackage it for mainland customers. This makes them more money but of course introduces Chinese capitalism into the production chain, causing the addition of unknown elements into their product. Anyone know the answer to this or can call the company for clarification? Chinese people will pay top dollar for the real deal milk powder, but anything that has been processed in China they will be highly sceptical of.

They made a deal with Synlait Milk to produce the powder for them. They are based in New Zealand so pretty sure the production of the milk powder will also be in New Zealand!

[JohnnyTheHorse]

It is all sourced and processed in NZ. I believe it is packaged into its individual final tin in NZ as well (based on the image from this article: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10878909).

[blobbles]

Yep by the looks of that Herald article it's being canned for final sale in Dunsandel. Hopefully they haven't simply moved their dodgy practices into their NZ factory... Anyone know the regulatory oversight that goes on to protect our export name? Have been a little worried about this since I saw the big chinese owned factories going up in NZ, if they start exporting low quality / poisonous goods directly from NZ all of NZ's exports will be called into question and severely impacted.

[ratkin]

Announcement looking all good , finally we have some real news and not just endless waffle about market depth.

[futurist]

I would like to know if their product is arriving in China just as they send it from New Zealand or if it is being sent to Guangzhou /Shanghai first for "processing". This is because I know how Chinese do business here with other imported milk powder which is to take the imported powder in bulk, cut their own ingredients into it then repackage it for mainland customers. This makes them more money but of course introduces Chinese capitalism into the production chain, causing the addition of unknown elements into their product. Anyone know the answer to this or can call the company for clarification? Chinese people will pay top dollar for the real deal milk powder, but anything that has been processed in China they will be highly sceptical of.

Mainland Chinese do not trust any milk powder that is locally made or processed; that's why it becomes headline news when Hong Kong introduces a maximum penalty of HK$500,000 and 2 years imprisonment for any visitors taking more than 2 cans of milk powder across the border. In Europe there is no such regulation yet, but all retailers have set straight limits to sell to the Mainland Chinese. I believe we have or used to have something similar in NZ too.

While it is a bit sad to see a country where the people do not trust their own products, and obviously it could be annoying to see them clear out all stocks in supermarkets and pharmacy at a worldwide scale; it is a great business opportunity to export milk powder directly to China without any involvement of the local factory. Hong Kong Government is being naive to control the demand instead of encouraging more supply. In fact, the current supply of milk powder in Hong Kong is at least 20x more than its local needs, so the solution should be speeding up the supply instead of destroying the industry.

Following that line of thought, ATM would only do well if they export directly to China and I think that is the case.

[blobbles]

As an indication from my friend, who has been in the biz over here (I am in China), last year there were 58 different brands of milk powders imported to China. 56 of those were "processed" in China, the milk came in bulk (mainly from NZ) and was "enhanced"/"reprocessed for local needs" in China before being on-sold to consumers as "imported milk". Of course, technically it was "imported milk", but in reality it had whatever the Chinese factory wanted put into it. Hence the melamine scandal of a few years ago and the completely justified scares of Chinese consumers just trying to feed their babies because a lot of them don't naturally produce enough breast milk.

My question is, under what guidelines do Synalit operate in New Zealand? Their website claims it is to NZFSA guildlines which, if true should see the sales of infant milk for A2 go absolutely ballistic and I would suggest their 60 million of sales in 5 years is terribly pessimistic - they could be one of the only suppliers of high quality low allergy milk (remember a lot more Asians compared to Europeans are lactose intolerant) into China. As such they should sell out of the stuff as fast as they can make it, maybe the 60 million figure is only an indication of how much they can supply?

[JohnnyTheHorse]

As far as I'm aware any food product produced in NZ must comply to all NZ regulations, even if it is to be exported. It must obviously then also comply with any regulations in the recipient country.

Also, note that a2 Milk still contains lactose, so is no use to anyone who is lactose intolerant :)

[Hoop]

Announcement looking all good , finally we have some real news and not just endless waffle about market depth.

Market depth ...waffle???....Don't you want to know how many buyers and seller there are in the market and at what price they are willing to buy or sell for ATM.

I would never ever buy or sell a share without checking the market depth first....there are some non-active investors out there that can't obtain depth data...

[Lawt]

My question is, under what guidelines do Synalit operate in New Zealand? Their website claims it is to NZFSA guildlines which, if true should see the sales of infant milk for A2 go absolutely ballistic and I would suggest their 60 million of sales in 5 years is terribly pessimistic - they could be one of the only suppliers of high quality low allergy milk (remember a lot more Asians compared to Europeans are lactose intolerant) into China. As such they should sell out of the stuff as fast as they can make it, maybe the 60 million figure is only an indication of how much they can supply?

Is A2 milk lactose free?

[blobbles]

Sorry, didn't mean to indicate the milk is lactose free, I just meant to indicate that many asians aren't used to a milk rich diet and therefore aren't as tolerant to milk proteins as us westerners. A2 milk has a different protein makeup which theoretically makes it less allergenic to those that aren't used to milk... "theoretically" as its still being argued for and against, as far as I know.

[futurist]

As an indication from my friend, who has been in the biz over here (I am in China), last year there were 58 different brands of milk powders imported to China. 56 of those were "processed" in China, the milk came in bulk (mainly from NZ) and was "enhanced"/"reprocessed for local needs" in China before being on-sold to consumers as "imported milk". Of course, technically it was "imported milk", but in reality it had whatever the Chinese factory wanted put into it. Hence the melamine scandal of a few years ago and the completely justified scares of Chinese consumers just trying to feed their babies because a lot of them don't naturally produce enough breast milk.


Depends on your definition of import, there could be more than 58 brands in total if you count those ones that come through the border by the ant-moving mechanism. Yes, that is a term used to describe how they use hundreds or even thousands of people to each move a few cans of milk powder across the border of Hong Kong every single day. Those human-imported milk powder is the one that is trusted by the middle class Mainland Chinese (the upper class would have different ways to obtain them). They are all sealed and not officially imported to China, even the exact same brand could be found officially from the import list, maybe one of those 56 brands you talk about. But they are not considered imported milk from the consumer's point of view. The local people are smart enough to differentiate.

If you are in China, you should be able to see with your own eye that those enhanced milk powder products are not doing very well at all. It is because the real business opportunity lies only with the true import route and everybody knows that, including A2.

[hilskin]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10879401

Not sure if this is good or bad news for A2

[Snow Leopard]

Time to buy.

Best Wishes
Paper Tiger

[JohnnyTheHorse]

Someone just steam rolled the sellers at 60. Buyers now stacking up there. I've been waiting for this moment for 4-5 months!!

[JohnnyTheHorse]

And there's 61. I smell blue sky in the not too distant future :p (although ATM has managed to prove me wrong nearly every time!)

[Whipmoney]

And there's 61. I smell blue sky in the not too distant future :p (although ATM has managed to prove me wrong nearly every time!)

The sweet sweet smell of ozone.

[blobbles]

The herald article relates to what I was talking about previously about only a few of the people selling infant milk powder being genuinely produced in foreign countries, rather than "processed"/"enhanced" in China. The creation of the New Zealand Infant Formula Exporters Association is a response to that fact, but it is likely the market will continue to be flooded with "enhanced" product (even though the milk powder comes from NZ) due to the lax enforcement of rules in China and the corruption/nepotism that exists here. Chinese consumers often think of "NZ milk" as a single entity, hence the big scare of buying ANY NZ milk last year when the last scandal rocked.

A better approach may be for fonterra and synalit would be to get together and decide to stop all exports of their milk powders to companies which are producing infant formulae. That way they can produce/can the powder in NZ according to NZ regulations and sell directly in China. This may piss a few Chinese businesses off and be seen as anti competitive, but would most likely benefit them in the long term through being able to keep their reputation.

I aren't sure they will be able to convince the average Chinese consumer that a particular brand is better because it has some marking on the packaging as belonging to this group (which is what we do in the west with heart health ticks etc). And besides, as soon as such a marking comes out, it will be forged and put on the cans of the other makers to also include something very similar. Actually, my friend here told me, a lot of places pay to take the genuine infant milk cans back from consumers - the reason is clear as to why - the dodgy companies in China refill them with their own inferior product and resell them to consumers as the real deal at a higher price point. Sad but true, anything goes with Chinese business men. My Chinese wife also tells me there is a fairly new saying in China "Chinese people are the best in the world at killing Chinese people".

[JohnnyTheHorse]

Another big day for ATM? Depth charts showing a 65c open at this early stage!

Looks like it! Nice depth building up showing this run has a support too. I guess everyone has their reasons for selling, but right now is not the time to be selling (in my view anyway).

[Whipmoney]

Sell at the top, buy at the bottom. This puppy has a long way to go yet.

Congrats to all those who bought below 60, you have plenty of support and upside coming your way!

I hope so, I got out of DIL for this one!

[JohnnyTheHorse]

Well we are now sitting on the next major resistance and the all time closing high. It may not smash it today as it has already risen 5 cents, but I can't see the resistance putting up much of a fight!

[JohnnyTheHorse]

Make that 6c :)

What are you talking about??? It's 7 cents :t_up:

[QOH]

Whatever it is, it is pretty to watch.

[000831]

cashed out from lovely RYM with 263% return and bought ATM at 62c heavily. happy to see the price jump up only two trading days.

[000831]

The Chinese Ministry of Agriculture, Mr. Han Chang Fu is visiting NZ now and signed an agreement with Nathan Guy. The first time for Chinese Ministry of Agriculture visits NZ. Nathan Guy will visit China after June.

The agreement is relatied to infant milk formula co-operation with Fonterra and A2.

A2 Chinese business partner, China State Farms Ltd is partially owned by Chinese Ministry of Agriculture.

[000831]

It is encouraged by Chinese government, the Chinese stated owned company is considering buying NZ listed companies shares. China State FARMS lTD owns China Agriculture Resource (Trading Code:600313) at Shang Hai Stock Exchange and it is a proper company to undertake the takeover activities in NZ.

[Snow Leopard]

So end of day is $0.68 which is where it was six months ago.

It would be nice for it continue upwards from here, please.

Best Wishes
Paper Tiger

[janner]

zhu ni hao yun, zhuan da qian PT :-))

[Snow Leopard]

zhu ni hao yun, zhuan da qian PT :-))

Tak. Men penge er ikke alt.

Best Wishes
Paper Tiger

[janner]

Tak. Men penge er ikke alt.

Best Wishes
Paper Tiger

But it does help :-)0

[janner]

Trondheim 1955 :-)

[ratkin]

Where do people see A2 being in five years time?

Milk powder to China has blue sky potential but it would be suprising if its not taken over way before we are able to make really big gains. Given the history of this market anything half decent is soon taken away from us at too low a price

[gv1]

Sparky, have you bought in these again ?

[000831]

hi guys, the online shop starts running today at http://www.nongken.org/a2/index.html, it can pre-order now.

a TV roadshow will be on mid of May and exhibitions in different cities between May and July. The sale starts from Bei Jing, Shang Hai, Guang Zhou, Tian Jing, Chong Qing, all large cities with population over 10 millions.

[gv1]

heh - no. Good luck to holders. Doing very nicely isn't it?

Thanks Sparky.
I sold mine when it went down to 55. Few days later the SP spiked.
Thinking if its good idea to get in again.

[JohnnyTheHorse]

Thanks Sparky.
I sold mine when it went down to 55. Few days later the SP spiked.
Thinking if its good idea to get in again.

Hard to tell whether now is a good time to get in. Risk would certainly be increased. It has broken the resistance of 68 and we are now in blue sky, so it really could go anywhere. It looks like buyers have been outnumbering the short term traders/profit takers, so at a guess I would be expecting it to maybe level out at 75ish. But who knows, time will tell.

If it gets to 80 I will probably sell my entire holding. This would be in no way based on the company (infant powder should be huge!!!) but based on the fact that markets are getting out of control. Would just feel a bit more comfortable with a larger cash position for when the sh*t hits the fan.

[Lawt]

If it gets to 80 I will probably sell my entire holding. This would be in no way based on the company (infant powder should be huge!!!) but based on the fact that markets are getting out of control. Would just feel a bit more comfortable with a larger cash position for when the sh*t hits the fan.

What if the poo poo doesn't hit the fan for another 5yrs?
Given we don't know this (well I don't at least) why bail, you may sit on cash at a few measley % all that time.

[JohnnyTheHorse]

What if the poo poo doesn't hit the fan for another 5yrs?
Given we don't know this (well I don't at least) why bail, you may sit on cash at a few measley % all that time.

Research bull/bear cycles.

[gv1]

Hard to tell whether now is a good time to get in. Risk would certainly be increased. It has broken the resistance of 68 and we are now in blue sky, so it really could go anywhere. It looks like buyers have been outnumbering the short term traders/profit takers, so at a guess I would be expecting it to maybe level out at 75ish. But who knows, time will tell.

If it gets to 80 I will probably sell my entire holding. This would be in no way based on the company (infant powder should be huge!!!) but based on the fact that markets are getting out of control. Would just feel a bit more comfortable with a larger cash position for when the sh*t hits the fan.

Thanks Johnnythehorse.

[GRIFFIN]

So Sparky does that mean that summerset will not be affected by a big correction.

[Lawt]

I admire your optimism Lawt, but this bull market really started in 2009/2010 when shares were once-in-a-generation cheap. I didn't arrive until late 2010, when shares were once-in-a-decade cheap.

If bull markets usually run 3-5 year cycles, then we are coming to the end of a cycle in 2013/2014. Of course, I might be wrong and there may be 5 years of bull markets to come.

Either way, I am not hugely troubled by this because I am holding more cash now and I have bought cheaply enough that losing a quarter of my portfolio value for six months means I'm still sitting on profits.

personally, I'd worry that A2s share price would get hammered in a big correction, irrespective of the smart people doing good things at the business. Hence why I sold out for roughly 60c and bought Summerset, which has also done well.

I'm actually not quite that optimistic, it was just a figure used for example - a bad choice as an example I guess.
I do concur on the liklihood of the likes of A2 (and what I term speculative stocks) being hammered in a big correction - hence these types of stocks only make up 24% of my portfolio - was less a few weeks back too.
Kind of interesting, within the last few posts we have had "the Sh*t hits the fan", a "bear market" and a "big correction" being discussed. Are all of these things the same thing? I don't see it that way, the way I see it is
The Sh*t hits the fan = big crash, 1987, -20% in a day or 3
Bear market = This is how I see this one (http://www.investorwords.com/443/bear_market.html)
Correction = Well that's covered in that link too.
Given the above, I don't see either of the first 2 being likely in the next 3 years, but I'd be surprised if we didn't see the last one some time soon.
But I don't see a correction as an issue for investors. Traders, speculators - they very well may.

The reason why I say I don't see either of the first 2 scenarios for a ways off is because there is a recovery under way and it is being driven from the ground up.
For example, If the sharemarket were to crash tomorrow, Christchurch will still be rebuilt.
In past times (87 for example) the sharemarket crash dragged construction down.
This can't happen this time.
Fletchers are going to turn in a good result. Steel and Tube are very likely to turn in a good result. Their employees and sub contractors are still going to be getting paid and fairly well.
A huge portion ofthe country will be recession proof for several years to come.
America is teetering on the edge of an economic recovery and who knows within 3yrs Europe may even show signs of recovery too.

[000831]

Japanese and USA are still printing hot money into global financial system. RBNZ would not lift up OCR till end of this year. still have few months safely to play if there is negative correlation between interest rate and the price of index.

The big correction would happen if USA suddenly tighten its monetary policy, and other countires fellow it. But now party is not over yet.

Mutual funds receive kiwisavers saving weekly or fornightly and keep buying shares, or keep a bit cash position. Look at RYM，SUM， DIL，DGL， EBOS, all in good trends. NZX 50 also in good position.

Enjoy the profit now, thanks for the bloody liquidity. Worry too much !

[Lawt]

So this bull market is going to look puny compared to the up and coming bull market? Me likey, I think I might just quit my day job!

I would like to guess no!
I mean 24% last year and 12% odd already this year should be damn hard to beat.

But of course, (just like pre 87) when every man and his dog are in and bidding crazy sums on anything with a pulse all bets are off.

I know a lot of people (well 3 but when you consider the people that I don't know there must be many) who have opened accounts as a result of MRP and are "having a flutter".
Quite frankly, I'm hoping for a decent correction to stop this sort of behaviour in it's tracks now.
So yes I realise I may have to eat some of my words from my last post if this behaviour continues.

[000831]

too early to out, hold for two weeks longer

[gv1]

MAYBE, people have realised its worth. Or did their maths.. Possibility.

[000831]

Current PE and price to book ratio does not reflect future growth and fundamentals change. PEG ratio may explain everything

As the share price reaches the record high, it means a new record high would have later on.

A2 milk selling not good as other Fonterra products in NZ supermarket, the profit low. However, the infant power in China is selling at 80NZD with 300% return. NZ population 430million and Chinese population 1.3billion with a baby born boom.

It's difficult to do the math here, but the A2 fundamental changed. If a huge correction occurs, then the takeover would happen from their Chinese business partner, taking the advantage from the market.

[000831]

It is a way for Chinese State owned company doing business in western countries, to avoid politician risks, sharing the profit or relief the pressure from products price increase. They never short of cash to buy overseas assets. The NZ dairy assets would be hot after John Key April China visit. the two gaints Yili Diary and Ya Shi Li Dairy announced that they will invest in NZ. the proposals have been approved by NZ government.

More example in Aussie mining industry, USA oil & gas, technology industry , few examples in NZ, such as F&P, Synlait Milk, but it must be dairy industry.

[janner]

I think we have seen our highs for now. I don't disagree that this company will be on the long term uptrend, I just disagree that buying now/selling in 2 weeks for a short term gain is foolish. I'd expect a retracement back to 65/70 levels followed by another hike, but that is months away. I'm always looking for that low buy-in/high sell-out, and now is time to sell so you can re-buy later! ;)

My two cents. Noah Fence.


Moosie.. You said in post 512 that you are not making as much money with this in and out and back again method.

[janner]

Not as much money as I COULD have, but I am having a lot of fun though. Learning curve and all ;)

We are all still on that learning curve :-)

[JohnnyTheHorse]

What's up with the ATM depth? The 75 cent sells have a 'u' in front of the number of shares on offer, and don't seem to update when someone buys them. Not ideal when I'm looking to sell... (On ANZ/DB).

[JohnnyTheHorse]

I'd sell at 74 Johnny ;)

You reckon it's a sign from the investing gods? Maybe it's trying to stop me from selling? :p

[Snow Leopard]

What's up with the ATM depth? The 75 cent sells have a 'u' in front of the number of shares on offer, and don't seem to update when someone buys them. Not ideal when I'm looking to sell... (On ANZ/DB).

If I remember right u = undisclosed amount but at least 100,000 (shares or $?)

Best Wishes
Paper Tiger

[enzed staffy]

+u - Limit orders can be placed onto the market with an undisclosed quantity.
The undisclosed quantity of the order must be value equal to or greater than
$100,000.

[JohnnyTheHorse]

Well I sold up. Still like the stock and will watch with interest, but I don't think that this price can be maintained and we will be seeing a drop soon. Maybe I'm wrong though. For the sake of those still holding I hope it continues charging!

[000831]

u is approxi half million share, now has been eaten. Some big guys are hidding behind the bids

[Master98]

not much knowledge about this company, but these figures( EPS 0.31c, NTA 7.25c,PE 235.48 )hold me back, hope their products sucessfully landed in china.

[JohnnyTheHorse]

not much knowledge about this company, but these figures( EPS 0.31c, NTA 7.25c,PE 235.48 )hold me back, hope their products sucessfully landed in china.

It's a great company. They are still in a strong growth mode, so EPS is small (although positive) as they are spending heaps on growth. I got out the other day as I saw it as fully priced and likely to drop somewhat. May buy back in in a few months time if its looking cheap. If you are in it for a trade, I'd be selling right now. If you're a long term investor then probably best to just hold on tight assuming the story continues to be positive.

[Master98]

It's a great company. They are still in a strong growth mode, so EPS is small (although positive) as they are spending heaps on growth. I got out the other day as I saw it as fully priced and likely to drop somewhat. May buy back in in a few months time if its looking cheap. If you are in it for a trade, I'd be selling right now. If you're a long term investor then probably best to just hold on tight assuming the story continues to be positive.

cheers, no holding at this moment.

[bonne vie]

Another positive mention for ATM today in the Synlaits's press release - $15m plan upgrade. Sorry having trouble putting the link on this posting. Perhaps someone to add link from NZ Herald or Synlaits website

[000831]

good news arrived, but price down. classic

[JohnnyTheHorse]

good news arrived, but price down. classic

It wasn't really any news for a2, certainly not news that would shift the share price. You also need to remember that ATM has just gone on a ~35-40% run, so I'd expect short term that the price will almost certainly slowly head south.

[000831]

agree, waiting again for buying signal.

[000831]

I sold because I jumped into other boats, like DGL and WHS, then will jump back on ATM again. I do not think this time the price will down by more than 5%.

efficiently use the money,mates

[000831]

orginally thought the PS would reach between 78c and 82c, but the big guy jumped out and sold at 75c, the buying power reduced. got the chance cashed out at 74c then bought DGL and WHS, which have a gain around 5% currently.

[Lawt]

orginally thought the PS would reach between 78c and 82c, but the big guy jumped out and sold at 75c, the buying power reduced. got the chance cashed out at 74c then bought DGL and WHS, which have a gain around 5% currently.

So you told moosie to hold while you sold? I like your style, true capitalist each man for himself.

[biker]

Looks like it will end the week at 70c or so.


72c actually. VWAP .714 today. It has held up surprisingly well this week I'd say.

[ratkin]

People on this thread are so price sensitive, just relax, ignore the daily noise and wait for the white gold to work its magic. China and its demand isnt going away

[Lawt]

Met someone who is closely affiliated to A2 Milk the other day (connected in a corporate linkage rather than industry sense). Not with the company, but affiliated.

He was incredibly bullish on A2's future, using his hands forming a "karate chop" pointing nearly straight up to demonstrate their growth.

Holders should be enthusiastic about the future!

It wasn't a taxi driver per chance?

[Dej]

Met someone who is closely affiliated to A2 Milk the other day (connected in a corporate linkage rather than industry sense). Not with the company, but affiliated.

He was incredibly bullish on A2's future, using his hands forming a "karate chop" pointing nearly straight up to demonstrate their growth.

Holders should be enthusiastic about the future!

Does this mean you are back in Sparky? The company is still a good company and all, just took my profits for now.

[000831]

Wait, watch, not now.

[MAC]

Just yet another good reason to buy ATM on the dips.

http://www.stuff.co.nz/dominion-post/comment/columnists/8751560/Infant-formula-exports-booming

[Snow Leopard]

Quite a fall today and with the highest volume of the last month.
I wonder if articles such as this from today's Herald (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10889015) are part of the cause.

Anyway it had better get it's act together or this will not be a long-term investment.

Best Wishes
Paper Tiger

[kizame]

Dipping on big volume too,but I think maybe just trading in a range,until more positive news.

[MAC]

Possibly media influenced, in conjunction with a technical trend and re-test of the MA50 following what was a relatively confident SP recovery earlier in the year post the capital raising and dilution.

According to the Ministry of Economic Development, the Chinese infant formula market is worth over NZD 7.43 billion (2011), of which NZ contributes around NZD 1 billion per annum. They project that this market will double by 2016.

One would hope that the Ministry of Primary Industries and New Zealand Trade and Enterprise would adequately resource the protection of what is a major growth prospect for the sector. At least protect matters at this end of the supply chain. Who knows if China can ever be influenced on this matter or any other ?

There is just absolutely so much up-side potential for ATM in this market, I would not be concerned about short term moves in SP.

[iceman]

Possibly media influenced, in conjunction with a technical trend and re-test of the MA50 following what was a relatively confident SP recovery earlier in the year post the capital raising and dilution.

According to the Ministry of Economic Development, the Chinese infant formula market is worth over NZD 7.43 billion (2011), of which NZ contributes around NZD 1 billion per annum. They project that this market will double by 2016.

One would hope that the Ministry of Primary Industries and New Zealand Trade and Enterprise would adequately resource the protection of what is a major growth prospect for the sector. At least protect matters at this end of the supply chain. Who knows if China can ever be influenced on this matter or any other ?

There is just absolutely so much up-side potential for ATM in this market, I would not be concerned about short term moves in SP.

While I am/was a long term investor in this one, I am very aware of the huge risks. China is without doubt the biggest growth market for ATMs products and articles like the one PT posted above have potential serious consequences for the industry. I therefore put this stock into the same risk portfolio as where I used to hold DIL a year or so ago. Huge potential uptrend but lots of unknowns.
I am with PT. This was initially a long term investment for me but the silence from the company doesn't give me much confidence. Presently I don't know whether to buy more or dump it !!!

[MAC]

It would be of really great interest to hear from someone with on the ground knowledge of the market place perceptions in China, not something I can assist with having never been there.

Is it possible that ATM with a marketing edge above other non A2 brands may be perceived as the 'best of breed' ?

Is it possible that ATM may even benefit from short term industry safety and quality concerns as one of the top quality and therefore trusted go to brands ?

[westcoaster]

Thanks, but can you please explain what you mean, I am just a Junior!

[westcoaster]

Great Thank you!

[blackcap]

Before we get all over exuberant do we know what the market cap of this company is at 60 cents and where it needs to go to justify that. Its not as expensive as say XRO granted but its getting up there...

[blackcap]

I know its no XRO but... you would really need sales in excess of $387m to justify a 60c share price... so... when is that going to happen and how. That is the question I have for this company. WIll see, am still debating whether to take a nibble :)

[janner]

I know its no XRO but... you would really need sales in excess of $387m to justify a 60c share price... so... when is that going to happen and how. That is the question I have for this company. WIll see, am still debating whether to take a nibble :)

You find yourself in the same position as mouse on HNZ..

The cheddar is there.. Do a little more research on your own behalf.. .

[blackcap]

I know Moosie.. sorry I was too brief, I was talking about future revenues. Didnt convey that well enough I guess. What I am saying is I find it difficult to envision where ATM is going to get that amount of revenue from in the future. It probably is there,but they are going to have to do a lot of work. Will keep watching and may buy in at some stage. I like their product (A2) and can see the markets emerging, but my fear is they cannot keep up with demand.

[000831]

Hi all, Chinese government is considering a trade barrier for foreign infant formula. Now they are working on the wine barrier for French Wine products and Chemical products from Germany, for the next stage, it's turn to NZ milk products. Already gave signals on Chinese National TV Channel.

Because the non-Chinese currencies depreciated, it may cause some trade wars to against "dumping" among the big economy countries. Such as current Euro anti-dump plan against Chinese solar products.

I am more happy to see how the marketing promotion is going on after A2 infant products arrivals in Shang Hai. Need to two months to figure out.

[westcoaster]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10888405 Nice reassurance for A2?. I hope the link works if not just copy and paste it in your browser.

[mcdongle]

Anyone know how much formula ATM have ordered from Synlait ??

[westcoaster]

http://ruralnews.co.nz/dairy-news/dairy-agribusiness/a2-eyes-domestic-launch this should answer your question

[stoploss]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10890965

[MAC]

This will hopefully continue to provide some confidence that the ministry are actively now addressing matters.

It's all up from here.

http://tvnz.co.nz/business-news/milk-formula-exporters-register-brands-5466478

[MAC]

ATM has provided guidance that they are “on track to achieve FY13 EBITDA of $11.2M before intercompany charges”. We also know that ATM have stated publically that they anticipate FY16 revenues “to be at about $280M”. This is around 3 times the anticipated FY13 revenues and if you do the math represents average forward revenue growth of about 45% per annum over the next 4 years.

This is recent but not new news, but how must we assess top to bottom line margins.

ATM’s average margin over the last two years has been 6.5% and we should anticipate this to improve further as the company grows and gains further efficiencies. A present margin of 6.5% is not bad with in a low margin industry, Fonterra’s HY13 margin was only 4.9%.

ATM operate in a global market, have a value added product above their competitors, yet contract a good percentage of their production and have entered into difficult to assess joint ventures.

Have any posters a studied expectation of forward ATM margins ?

[000831]

Fonterra announced that its Anmum brand will start to sell in China this year. Competitiors for A2 one by one.....

[stoploss]

http://www.stuff.co.nz/business/farming/dairy/8814457/Yashili-to-be-bought-by-Mengniu-Dairy

[MAC]

Presentation by Geoff Babidge, CEO, to the 7th Global Dairy Congress in Lucerne Switzerland
19-20th June 2013.

Highlights:

AUSTRALIA:
· In Australia, approximately 25% of consumers are dairy sensitive or intolerant
· 718% growth in the Australian market since HY2008
· Significant price premium over other branded milks and, c.150% premium over home brands

UK IRELAND & EUROPE:
· Joint venture with Robert Wiseman Dairies in the United Kingdom and Ireland. RWD is largest UK milk processor
· Launch of a2™ brand fresh milk into the UK from October 2012. Initial listing in 900 outlets nationwide
· Opportunity to expand the product portfolio in other European markets

CHINA:
· First shipment of infant formula product to be on shelf September 2013

http://www.noodls.com/viewNoodl/19090754/a2-corporation-limited/a2-milk-bringing-consumers-back-to-dairy-a2c-presentation-

Check out the Australian revenue growth curve within this presentation. If ATM achieve similar growth in their other markets this could all just take-off.

I’m also encouraged by the 150% price premium which is beginning to satisfy some of my assumptions on what top to bottom line profit margins ATM will ultimately achieve. ie: what the A2 marketing premium is worth over and above their non A2 competitors.

Mac

[iceman]

Thanks for posting this Mac. It is hard to get much info on progress with this company so I appreciate anything like this, good or bad. Am reasonably invested in ATM and my gut is telling me to accumulate even more, but hard on this information vacuum.

[MAC]

It's good to see a concise consolidation of the scientific and medical research as well, more so than I've seen previously.

I'm also quite curious about such a bold statement by Geoff Babidge in the presentation summary, wow !

"Further scientific developments may drive step change in awareness and public support. Potential for a2™ brand to become the global default milk"

[janner]

It's good to see a concise consolidation of the scientific and medical research as well, more so than I've seen previously.

I'm also quite curious about such a bold statement by Geoff Babidge in the presentation summary, wow !

"Further scientific developments may drive step change in awareness and public support. Potential for a2™ brand to become the global default milk"

From my understanding A2 milk was the norm at one time.. Genetics have changed all of that..
Today you have many Lactose intolerant people.. Unheard of in my youth.. We all drank the free milk at school..

Lactose intolerant !!.. A growing market ..

[westcoaster]

From my understanding A2 milk was the norm at one time.. Genetics have changed all of that..
Today you have many Lactose intolerant people.. Unheard of in my youth.. We all drank the free milk at school..

Lactose intolerant !!.. A growing market ..

Unheard of in our youth because as you say A2 milk was the norm.

Lactose intolerance is a modern day illness and in most cases is very difficult to diagnose accurately.
Until now, I think it is has really just been a convenient way of hiding the fact that it's the BCM7 creating the problem.

[Banksie]

Unheard of in our youth because as you say A2 milk was the norm.

As far as I know (in other words what I can glean from google), the A1 mutation occurred around 5000 years ago. Older breeds of cow such as Jerseys, African and Asian breeds give mostly A2 milk while the black and white cows Friesian and Holstein give A1.

As a kid I remember my mom telling me to drink Jersey or Guernsey cow milk because it was the best. Was there wisdom in this old wives tale?

If the milk you were getting as a kid was mostly A2...has the national herd changed? Were there less Holsteins in the past?

[MAC]

Agree that ATM is looking well oversold now, like a lot of other stocks at present I guess. The SP bounced off support at 60 cents on Friday, MA200 is also 60 cents. We may see a levelling off about here.

[MAC]

Cautiously looking at the charts again today, we may be seeing some consolidation now and a re-continuation of the upward trend line. If the SP breaks resistance at $0.63 within the next week I'd be comfortable topping up at these over sold levels.

[Lease]

Cautiously looking at the charts again today, we may be seeing some consolidation now and a re-continuation of the upward trend line. If the SP breaks resistance at $0.63 within the next week I'd be comfortable topping up at these over sold levels.

Do you really think charting is reliable?

[MAC]

Nope and I don't own a crystal ball, but when stocks are oversold and the fundamentals are good one has to try and decide when ?

[Snoopy]

Like lactose intolerance, many people are self diagnosing themselves as gluten intolerant, they know that something is upsetting their stomach, but its not formally diagnosed. Lactose/dairy intolerance is the same, and A2 should cash in on the dietary trend.

I'm looking to enter, but just watching at the moment due to the market ructions. I could almost live with a current P/E of 80 but I'm assuming it will come down lower :-)


I think you are right about the PE coming down KW.

Credit where credit is due. The fact that a high tech start-up is generating a profit lifts it above 90% of other high tech start ups immediately in my eyes. However to suggest that something like 60c is 'value' in any valuation sense is way over the top. Paint a growth story big enough and any price can look like value to those will starry eyed glasses. I guess if A2 takes off in China, then todays' shareholders will indeed be well rewarded.

However, of greater relevance from my perspective is, why hasn't A2 taken off in New Zealand? This is warning sign to me that no market is a 'done deal'.

Next if you read Professor Keith Woodhouse's blogs on A2, you will see that although containing A2 apparently means that such milk can be consumed by the lactose intolerant, he is not sure why. Possibly something to do with slowing down the digestive tract process is his best guess. But there are other ways to do that. And of course there are other milk substitutes (soy milk, rice milk) that may be better for lactose intolerant people.

What I see with A2 milk is a one product company with probable health benefits, of which satisfying the demands of the lactose intolerant is not one, which will face huge marketing headwinds. Their success in Australia is admirable, but success in other markets must be earned. I believe it is very unlikely that A2 milk will succeed in every market it tackles, and there will be opportunities to pick up shares genuinely cheaply if the boat rocks.

At 60c I would consider A2 grossly overpriced, and with the exception of one or two software shares, the most expensive share on the New Zealand market, period. I will be looking to enter A2 at some stage, but I won't be paying any more than 20c for my A2 shares.

SNOOPY

[MAC]

Snoopy, ATM have a plan to enter the NZ fresh milk market, have a quick look back at their last few presentations. As I understand, It’ not so much that A2 milk hasn’t taken off in NZ, it’s more that ATM own the IP and have been reserving significant entry thus far while they tackle larger and more lucrative global markets.

Growth stocks are not easily valued and PE shouldn’t be considered as a primary tool in isolation at this stage in a business cycle. Unlike other start-ups in the dairy sector at present ATM is both investing heavily in growth, and, also generating modest profits at the same time, hats off to them.

Average revenue in the last two years was 45% and if ATM meet their expectation of achieving $280M in revenues by FY16 then this also provides us with a forward revenue growth rate of 45% for the next four years.

The challenge in valuing ATM, as I see it, is in estimating where forward top to bottom line margins will ramp up to over the next few years.

ATM have a unique business model with a mix of direct production, contract production, joint ventures and direct sales which does make it difficult to assess forward profitability. However, the common thread is the additional margins generated by owning the intellectual property and through having a niche product which demands a higher over the counter sales price above and beyond all their competitors.

It would seem that most would value ATM higher than yourself, each to their own, but I suspect you will be waiting for a very long time indeed if you really do expect to see ATM at $0.20 or anywhere near to it.

Mac

[biker]

This from Geoff Babidge, MD, "The reason the business in New Zealand is pretty modest is that some time ago, prior to the recent shareholders and board of management, the company issued a whole raft of licences to small operators. That model proved not to be particularly efficient,"

In New Zealand, North Auckland dairy company Fresha Valley has the licence to produce homogenised A2 milk in one and two-litre containers.

[Snoopy]

This from Geoff Babidge, MD, "The reason the business in New Zealand is pretty modest is that some time ago, prior to the recent shareholders and board of management, the company issued a whole raft of licences to small operators. That model proved not to be particularly efficient,"

In New Zealand, North Auckland dairy company Fresha Valley has the licence to produce homogenised A2 milk in one and two-litre containers.


Thanks for the explanation on the failure of A2 to develop in NZ, Biker and KW. I guess this shows the importance of choosing the right partner(s) with which to roll out your product. My point was that with a PE of 80 you are pre-buying assumed success which may not roll out as you anticipated.

Look at all the enthusiasm that the market greeted the involvement of Agria providing a channel for PGW to sell their seeds into China. That enthusiasm saw PGW shares soar into the 45c range. Yet when it became clear there are no quick dollars to be made in China PGW shares lost more than a third of their value. I don't think many people would argue with the pure quality of the Methven plumbing products. Yet they have had a terrible time trying to break into the UK.

My point is just because you have a great product, that is not a licence to print money overseas. IMO A2 faces huge market development risks that are not at all reflected in the share price. That doesn't mean I don't wish them all the best for the future though. But from a risk return perspective I think a share price at anything higher than the last cash issue price is too high at this stage of the development cycle. And if anything does go wrong, the share price is likely to retreat towards the 20c that the shares were trading at before the recent market euphoria.

SNOOPY

[Snoopy]

Growth stocks are not easily valued and PE shouldn’t be considered as a primary tool in isolation at this stage in a business cycle. Unlike other start-ups in the dairy sector at present ATM is both investing heavily in growth, and, also generating modest profits at the same time, hats off to them.


Yes, it was the fact that a growth company was actually generating profits that grabbed my attention in the first place. Personally I would never consider investment in any company that has never made a profit, although I recognize that other investors have different perspectives.



Average revenue in the last two years was 45% and if ATM meet their expectation of achieving $280M in revenues by FY16 then this also provides us with a forward revenue growth rate of 45% for the next four years.


It is very easy to convince yourself of high values if you use extrapolation as an investment tool. Somehow I doubt that revenue will rise 45% in Australia even this year. A 45% rise in revenue for A2 may indeed be possible, but it will take hard work in new markets to achieve it.



The challenge in valuing ATM, as I see it, is in estimating where forward top to bottom line margins will ramp up to over the next few years.

ATM have a unique business model with a mix of direct production, contract production, joint ventures and direct sales which does make it difficult to assess forward profitability. However, the common thread is the additional margins generated by owning the intellectual property and through having a niche product which demands a higher over the counter sales price above and beyond all their competitors.


It sounds like A2 have learned from their 'mistake' in the way their NZ market push was handled. I agree the A2 intellectual property is the kind of 'moat' I look for in evaluating new investments. So there are definitely some positives there. The risk here IMO is overpaying to gain exposure to the business. Not that the product is no good.

SNOOPY

[MAC]

I’m not sure the rest of us are seeing any euphoria.

What we are clearly seeing is steady well managed growth over the last three years as the company progressively de-risks and is now reliably growing revenues at 45% per annum based on ever improving models for monetising their intellectual property.

ATM estimate this growth rate will continue for the next four years as they enter new markets and they appear to be walking the talk. The next step in de-risking should occur when we receive sales reports from the 900 outlets in the UK.

I respect bearish views, they keep us all cognisant, and I wish you luck in your endeavour in wishing to enter at 2011 valuations.

4624

[Hoop]

I’m not sure the rest of us are seeing any euphoria.

What we are clearly seeing is steady well managed growth over the last three years as the company progressively de-risks and is now reliably growing revenues at 45% per annum based on ever improving models for monetising their intellectual property.

ATM estimate this growth rate will continue for the next four years as they enter new markets and they appear to be walking the talk. The next step in de-risking should occur when we receive sales reports from the 900 outlets in the UK.

I respect bearish views, they keep us all cognisant, and I wish you luck in your endeavour in wishing to enter at 2011 valuations.

4624

Hmmm...Mac you quote 45% pa annum growth and I see your chart is showing a 644% price increase over 3 years...That's an unusually rapid uptrend don't you think? A Share price uptrend well ahead of its fundamentals with no long pauses and no healthy corrections???.....I can why some people would take a bearish view...eh

[MAC]

I agree with you hoop, I also equally think that a suggestion of a 320% correction to a share price of $0.20 is rather perma bearish.

Note too that it’s 45% revenue growth p.a and ATM are investing heavily like other growth companies to achieve future NPAT. The SP needs to be justified by analysis of forward NPAT manifesting from this high rate of investment. Consideration of future margins is also important.

[hilskin]

A2 milk now selling yoghurt in the OZ. This from there facebook page about an hour ago.

"Did someone say Yoghourt? a2 Jalna Natural Low Fat Creamy Yogurt comes in 1kg tubs and is available at Coles and leading Independents. ‘Share’ the word!"

[Lease]

I do agree ATM is very expensive. But the overall NZX is not that expensive, therefore I reckon ATM SP still have room to go up until market get crazy.

If ATM is down to below 20C, it's either the Company fundamentals incur serious problems, or the overall market crashes.

[MAC]

I’m continuing with a bout of positivity for ATM, there's just so much negativity in the world to balance.

This is encouraging from the UK;

Tesco are retailing 2 litre bottles of A2 for £1.99. This compares to Tesco’s home brand 2.27 litre (4 pint) bottles retailing for £1.29. Also, seems to be a promotional sale at present of two bottles of A2 for £3.00, all the better to kick things along.

http://www.tesco.com/groceries/Product/Details/?id=275206388

It’s an interesting price point as it appears to have equivalency with the selected Australian premium of 150% times home brand retail prices, and therefore probably very similar margins.

Perhaps we will get some initial indication of sales volumes at full year reporting, 9 weeks away.

It would be nice to see the UK venture de-risking like the Australian operation.

[Snoopy]

I can't understand why ATM is not a $2 billion company and in the NZX 50. What has XRO got that ATM hasn't :confused:


Did you use the wrong smiley KW? I would have used this one ;-P.

Of course, if you pick the one share on the NZX (XRO) that is obviously more overvalued than A2, then A2 is value in that limited comparative sense. But comparing something that is grossly overvalued, with something that is obscenely overvalued, does not identify 'value' in my books.

SNOOPY

PS Looking to get into Xero as well at sub $1

[MAC]

Interesting comments within the back end of this video interview with Geoff Babidge.

A suggestion of a development in conjunction with another partner within the next 12 months. USA and Canada was mentioned.

http://www.foodbev.com/news/interview-with-geoffrey-babidge-about-th#.UdPgMDunq64

[MAC]

Does A1 milk also exacerbate symptoms of neurological disorders such as autism and schizophrenia ?.

This fellow seems to think so.


http://www.jfhc.co.uk/new_research_strengthens_link_between_common_cows_ milk_protein_and_serious_neurological_disorders_81 974.aspx

[hilskin]

According to this article A2 Milk Corp have helped him with funding along with Autism research Institute and National Institute of Drug Abuse.
Don't have a problem with the funding side of things but I don't think we should get tooo excited about this release just yet. Need to see what evidence they have........need to prove to the scientific community as they are the ones that are going to help convert everyone to A2 milk a lot quicker than the rate we are currently going at.

http://www.thegrocer.co.uk/opinion/the-grocer-blog-daily-bread/a2-milk-serves-a-bitter-pill/344976.blog (http://www.thegrocer.co.uk/opinion/the-grocer-blog-daily-bread/a2-milk-serves-a-bitter-pill/344976.blog)

[hilskin]

http://www.sciencemediacentre.org/expert-reaction-to-press-release-on-non-peer-reviewed-research-that-suggests-a-link-between-protein-in-cows-milk-and-autism/

This is what some Professors are saying about the news release.

[MAC]

There is certainly no doubt that taking on such a large entrenched establishment head on shows ATM really do have serious cojones.

I wonder though if they are really stupid enough to have just scored an own goal, or, do they have a larger strategy to roll out for the purpose of initiating debate and for drawing other health professionals into this area of research ?.

Only time will tell, it will be an interesting watch over the coming months.

[MAC]

Considering this a little further.

These types of health assessments can go for years if not decades, and over this time there will be health professionals, investors and consumers on both sides of this debate and others to come. However, open debate and consumer awareness, on top of ATM’s existing marketing, will only serve to further grow their market share from what is presently a low level.

It took ATM several years to achieve 6.9% market share in Australia. In perspective, if ATM were to potentially achieve 6.9% market share across their longer term target market of Australia, UK, Europe, USA and Canada, over let’s say the next 7 or 8 years, then this would make them one of the largest fresh milk companies, if not the largest.

ATM may well be at the early stages of what could potentially be a very solid long term trend. If the Australian growth story may be applied as a precedent, then after less than a year selling in the UK, a 0.5% market share at FY13 would be a satisfactory result.

DISC: Holding, ….., and happy to patiently ride a growth driven up trend.

[hilskin]

ATM looks ready to move upwards again, hope big sellers stay away.

[bull....]

ATM looks ready to move upwards again, hope big sellers stay away.

People might be buying back in now since synliat has done its book build

[hilskin]

Whenever it has it's next run, who knows maybe today???? , I don't think we'll see these prices in the low 60c range again unless something goes wrong.

[MAC]

Well done KW and good timing too I expect, did you pour yourself a nice glass of the white gold to celebrate ?

[bull....]

still in uptrend bounced of uptrend at 61c and fib levels so full yrs result if good should propel it to new highs if its liked by the market , see what happens

[MAC]

It surprises me a little that ATM have not specifically announced the appointment of Susan Massasso into the newly created position as Chief Marketing Officer.

What a dream job this must be for a marketing professional with all the opportunity in the world to pursue with a brand like a2.

She seems well experienced enough coming from marketing juggernauts like Unilever and Campbell Arnott’s, just look what she did for Tim Tams ?

I understand she commences with ATM in September 2013.

http://www.cmo.com.au/article/522043/a2_appoints_its_first_cmo_drive_global_brand_strat egy/

[blackcap]

In a way it is good that they have not trumpeted this appointment. Its not material and in no way are the obliged to. Many companies focus on announcing every sale or event to the market to try and "market" their shareprice. I prefer companies that just get on with the work of doing what they do and leave the noise to others.

[MAC]

Agree, pretty pivotal role this one though for a company whose success depends so much on how well they can dress up and value add a white consumable liquid.

[gv1]

Agree, pretty pivotal role this one though for a company whose success depends so much on how well they can dress up and value add a white consumable liquid.

Yeap...future growth story.

[hilskin]

http://www.cnbc.com/id/100915932

First shipment of A2 baby formula expected to be on the shelf (China) from October. After reading articles like this I can't imagine they will be on the shelves for long.

[hilskin]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10905697

A negative article in the Nz Herald today. Feeling confident A2 corporation have address these issues and should be received well in China. They will need to ensure they start sell their baby formula in NZ and Oz sooner rather than later to help give it credibility.

[Anna Naum]

Article is (as is normally the case with the Herald) about two months behind the news. There have been a couple of +ve articles in the China papers about the response from NZ Inc and the work that is being done. ATM has great partners in China and is a serious niche player so I doubt this will have any effect at all on what actually happens, albeit I agree sentiment amongst NZ investors may be lowered as a result.

[MAC]

Last year before I relocated from Australia I used to order my daily flat white from the local cafe with A2, when I ask here in Christchurch the barristers just look at be blankly. Won't stop me asking, but we do seem to be getting a little behind here now.

[Thor]

I'm a holder and a consumer of A2 milk, and I can say for sure that it does actually taste so much better than regular milk. The A1 beta casein must also affect the taste of the milk. And yes it makes awesome flat whites, so creamy and delicious.

[biker]

I'm a holder and a consumer of A2 milk, and I can say for sure that it does actually taste so much better than regular milk. The A1 beta casein must also affect the taste of the milk. And yes it makes awesome flat whites, so creamy and delicious.

Where do you get it? I'm looking for trim A2 in Auckland. Can get non trim from my local supermarket but don't drink full fat milk. Currently using 'Soy Milky' UHT which has a much nicer taste than A1 trim milk.

[Thor]

I'm pretty sure in NZ they only sell full cream milk, so you're out of luck. Full cream taste so much better though, and since the link between saturated fat and heart disease is pretty much debunked now (unfortunately the main stream still push the same old, wrong message, but it is changing slowly), there really is no reason to avoid it.

[blackcap]

And it tastes so much better than skim milk. (personal opinion off course). I grew up in a place where we milked our own cows and drank milk from the vat as it were. To call skim milk "milk" is an insult to me. It's just white coloured water.

[GRIFFIN]

Oh so right blackcap and back in the day you would get in the milk room and drink pure milk straight off the cooler or if you wanted to have it warm before it hit the cooler. So whats with our full milk now days if you put it in a cats dish and it sits for a day it goes jelly like, pure cows milk does not do that.

[MAC]

What better indicator is there than 50% growth in market share within a competitive environment like this.

http://www.foodmag.com.au/news/coles-and-woolies-still-winning-milk-wars

[westcoaster]

More potentially encouraging news...
A2, whose milk contains different proteins to ordinary milk, is another company both Lister and Davies say may surprise investors on the upside.
<a target="_blank" href="http://adclick.g.doubleclick.net/aclk%253Fsa%253DL%2526ai%253DBSgNXJxr8UbqMOs2EkgXL 5IHwCKuS6cEDAAAAEAEgADgAWIuW541kYKvssYXgGIIBF2NhLX B1Yi05MzY2ODY3MTc0MjAzNzcysgEPd3d3LnN0dWZmLmNvLm56 ugEJZ2ZwX2ltYWdlyAEJ2gFQaHR0cDovL3d3dy5zdHVmZi5jby 5uei9idXNpbmVzcy9tb25leS84OTk1NjkzL0NvbXBhbnktcmVz dWx0cy1xdWljay1hbmQtdGhlLWRlYWSYAuBdqQLWqXxUpk2qPs ACAuACAOoCHTY2NzQvb25sLnN0dWZmLmJ1c2luZXNzL21vbmV5-AKB0h6QA6ALmAOgC6gDAeAEAaAGHw%2526num%253D0%2526si g%253DAOD64_3BDYifWNaeY1OZgPfLbvS24qmEcg%2526clien t%253Dca-pub-9366867174203772%2526adurl%253Dhttp://www.mixandmash.org.nz/"><img src="http://pagead2.googlesyndication.com/pagead/imgad?id=CICAgIDQx-WcQRABGAEyCNg5WIaZnZ-_" width="300" height="250" border="0" alt="" galleryimg="no"></a> http://www.sharetrader.co.nz/newreply.php?do=postreply&t=2318

Davies says a planned update about A2's entry into the United Kingdom and China is worth watching and could send the share price soaring, as did the company's April announcement regarding the introduction of a new infant formula to China and Australia.
"The UK operation is looking to follow in the footsteps of its success in Australia, where A2 currently enjoys a 6.9 per cent market share by sales value," he says.
"The level of penetration they get in the very competitive UK market will be of great interest (and) China also has great potential."

[MAC]

The expansion into the UK market is indeed potentially enormous being a much larger market than that of Australia, aggressive advertising with Kylie Minogue, sales in 900 Tesco supermarket stores, and a newly appointed Chief Marketing Officer coming on board in September to drive a consolidated global strategy. The growth prospects for ATM are truly huge.

What impresses me most is that ATM are growing revenues at 45% p.a, but unlike other growth stocks (eg XRO) they are also concurrently managing margins and are generating positive NPAT as they grow.

Though, we shouldn't get ahead of ourselves in anticipating the reaping of all ATM's good efforts and investment.

ATM have been selling into the UK via the Wiseman JV for less than a year to June 2013, so we should not expect too much just yet in the way of revenues at FY13 reporting in a month’s time, and there will be, as a matter of growth JV costs to consider. I would be satisfied if ATM have entered with an inaugural part year (9 month) market share of 0.5%, IMHO this would represent a very good result in respect to the Australian ramp up when at that stage.

Infant formula product doesn't come onto shelves in China until September 2013 so therefore we will not see any revenue contribution at FY13, but we may see ramp up costs. We will have to wait until HY14 reporting to gauge the effectiveness of this venture.

The Australian revenues may be impacted by the 10% move in exchange rate, however, a month out from reporting ATM have not altered guidance of FY13 EBITDA of 11.2M before intercompany charges which last year were 1.5M or so.

I would be interested in the analysis of others ?

I'm calling for FY13 revenues of 92M (+48%) and NPAT of 5.0M as being a good solid result whilst ATM are investing heavily in future growth.

[janner]

Oh so right blackcap and back in the day you would get in the milk room and drink pure milk straight off the cooler or if you wanted to have it warm before it hit the cooler. .

Aah !!.. Memories.. and there was a muck heap.. Pitch forked onto a cart.. Muck spreading was an art in those long forgotten days.. .. ..

Keep the milk.. Please.. I prefer the stainless way we do it today though..

Agree with comments on ATM's future..

[Joshuatree]

On a diff tangent I remember trying out A2 a few years back and not noticing much diff in taste but noticing itsfridge life wasnt as long. I also read at the time an article saying a study that said their were NO health benifits and i lost int. Seems that article was wrong but will allocate a little time looking for this and scanning A2 threads.
With a PE of 218 and mkt cap of $433 million and one prediction of $5 million NPAT one needs to be a believer in massive growth potential ahead. In 2 years price has gone from re 47c to 67c re 21% a year. Certainly a great leap of faith re ..." A2's entry into the UK and china is worth watching and could send the price soaring". Anyways could be a soft market for a while for white gold stocks , an op to buy in if one is a believer. Holding fonterra and synlait atm.

[MAC]

Either way ATM are happily growing revenues at 45% p.a without any infant formula sales in China.

It is easy to forget that China has not got an open democratic government and bureaucracy and it does seem from recent media commentary that the regime there may intend to generally knock the quality and therefore price of imported infant product. The latest Fonterra news may probably provide some further fodder for this aim.

It would be interesting to hear from posters with a ‘having lived in China’ perspective as to what the retail market perceptions on the ground are really like. Would A2 as the brand with the greatest premium health benefits have greater traction over its competitors in such an environment, or, is the market booming to the point where all infant formula brands are simply just golden ?.

ATM are well diversified across other markets and infant formula sales don’t commence in China until next month. Thus there can be not much short term impact, longer term I don’t see the Chinese market getting smaller for NZ brands, in fact it is estimated to double by 2016.

[MAC]

Joshuatree, given the present investment by ATM in new markets, have you considered what FY14 results may look like ?. I would encourage you to DYOR, you may be presently surprised.

[Joshuatree]

Thanks MAC , will do.

[blobbles]

Either way ATM are happily growing revenues at 45% p.a without any infant formula sales in China.

It is easy to forget that China has not got an open democratic government and bureaucracy and it does seem from recent media commentary that the regime there may intend to generally knock the quality and therefore price of imported infant product. The latest Fonterra news may probably provide some further fodder for this aim.

It would be interesting to hear from posters with a ‘having lived in China’ perspective as to what the retail market perceptions on the ground are really like. Would A2 as the brand with the greatest premium health benefits have greater traction over its competitors in such an environment, or, is the market booming to the point where all infant formula brands are simply just golden ?.

ATM are well diversified across other markets and infant formula sales don’t commence in China until next month. Thus there can be not much short term impact, longer term I don’t see the Chinese market getting smaller for NZ brands, in fact it is estimated to double by 2016.

I live in China. Consumers here are mostly relieved, they are holding up Fonterra as a model for how Chinese companies should operate! Actually recalling a product that has potential safety implications is unheard of in China so they are amazed its happening and most free thinkers (who are very popular in social network sites) are saying Fonterra is doing a good job. Chinese companies would simply let products go to markets with huge problems, if they find out there is something wrong with them, they wait until consumers report a problem before 1. Trying to cover it up and if that doesn't work 2. Saying its isolated and 3. Recalling product ONLY if its forced to by the government. Then, most of the time, they will mix in the recalled product with fresh stuff to dilute problems. Amazing, but it happens all the time.

The problem here is the government reaction. They are on the verge or in process of recalling EVERY Fonterra product. Which, by the sounds of it, is a complete over-reaction. The government has been doing quite a lot of anti-foreign company/anti-foreigner activity recently however, trying to instil a greater sense of nationalism in its people while falsely trying to portray foreign companies as being the bad guys, or having just as many problems as Chinese companies, if not worse. This is a worrying trend in China and appears to be the government gearing its citizenry up for a future war. A bit scary. The media here is all under the thumb of the government so the result is they can control what people believe. Fortunately there are social networking systems which aren't as easy to control which show what people really think.

[blobbles]

The sentiment is almost always anti foreign company, making them out to be evil. Most likely if its a milk scandal, it doesn't matter which companies are involved all foreign milk will take a hit. Although it will most likely be a blip. If its a food they need, they will have the attitude "What can we do?" and keep using it, mostly likely without coming to any harm.

Chinese people have a modern saying about this though (roughly translated): "The best people in the world at killing Chinese people are: Chinese people".

[MAC]

Blobbes, if Fonterra product is suspended, and there was already a shortage of supply on the shelves, do you think the local producers will be able to pick up the slack or will retail prices just temporarily leap ?

[blobbles]

It will take a while for stocks to run down in most places except the East coast cities. Its unlikely locals are in any way able to replaces the shortage of supply, you are talking about thousands of tonnes of milk powder being produced/packaged/distributed in a short time span. It is likely locals may switch to normal fresh milk though - not the best supplement obviously but if they have no choice, they will do it.

Likely though they will simply keep using it as there is nothing really comparable on the market. There are a few other foreign brands that can take up some slack (Nestle is one, but I wouldn't trust Nestle products as far as I could drop them) but you can only milk a cow for so much! And likely if the government issues recalls and demand spikes, the products will still be sold or will find their way out the back of the governments trucks into the highest bidders hands. No I aren't joking.

[MAC]

At least the exposure for ATM is only one shipment of product, nothing in the big picture. Anticipate FSF and SML to a lesser extent to be impacted though at the opening tomorrow.

[blobbles]

To show you how dodgy China can be - about 6 months ago some rice was imported from China to the US. They found traces of heavy metals, something like 10x the allowable limit, so sent the shipment back to China. When it hit Chinese shores, it simply vanished. Nobody knows where it went. But most people believe it is back in their food supply, diluted through other rice. Or ground up and used for baozi (little Chinese buns) pastry.

Just the other day I heard of another producer not far from here who was soaking cardboard in acid to soften it so it could be used as filler for baozi pastry. Then there is the fake meat that is everywhere (made from god knows what). Then there is the oil they get out of the drains of restaurants and "reprocess" it into cooking oil (which means taking out some dirty bits) which they sell back to other restaurants.

Frankly the locals have a lot more to be scared about than the one in a billion chance that they could possibly get botulism from whey protein (which sounds absurd considering the post processing which should kill most bacteria).

[MAC]

Must be fascinating to watch over there. Do appreciate your posts Blobbles, if you could keep us all informed over the coming days that would be just fantastic ?

[QOH]

thanks for your interesting posts Blobbles, good to hear from the coal face.

[janner]

very higly doubt that, read above posters views from within china. they are going through an intensive anti western brainwash at the moment. fonterra IS new zealand, so they will all get tarred with the same brush.

remember, propaganda panders to the very lowest common denominator...

Nope !!.. disagree with that statement moosie..

Mothers in china have the same fears.. They will continue to buy the best alternative.. Any thing Kiwi..

[blobbles]

Nope !!.. disagree with that statement moosie..


Mothers in china have the same fears.. They will continue to buy the best alternative.. Any thing Kiwi..


After talking to my wife who is Chinese and her sister, a new Chinese mother who is feeding her newborn milk powder we imported directly from NZ - Karicare Gold, is that Chinese mothers will still choose and stick with the powder they were using before... as long as its available. They would not switch to Chinese made milk powder as they say "because Chinese milk powder, we know, to be so much worse". When asked why, they say "because Chinese business men are the worst in the world [will do anything to make money]".


My previous postings were mainly my opinion, this is straight from the mouth of 1 soon mother to be and 1 current mother in China.... so a bit more accurate! I suspect you are right janner, not much will change unless the Chinese mothers can no longer buy the milk powder they are after. Then, likely they may switch to another... but it will be a foreign brand over a Chinese one, even then.

Again this is Chinese government over-reaction pushed likely by in country milk suppliers. Chinese consumers will still want and demand foreign milk powder even though it may not be on the shelves. So the effect on the NZ companies is pretty much all up to the Chinese government to see how far they want to push their luck (i.e. not break the free trade agreement). While the govt here brain washes anti western sentiment into the people, the people are mostly aware of the brain washing and will see through it when it comes to the health of their babies... most likely. Its early stages at the moment, hence my non definitive answers of how consumers will react.

NZ has built up a good reputation though and, surprisingly enhanced this in the eyes of most consumers here, by releasing and recalling the products in question. That separates western companies from Chinese companies which gives them more confidence.

My pick is though that ATM will take a big hit tomorrow as well as FSF etc. So be ready to pounce on some potentially good deals!

[zymwh]

Seems some guys here forget thatvthis is a nz issue...russian blahblahblah...china blahblahblah...do u guys know what ..botulism is sry if my spelling is wrong...over reaction..maybe..but simply in beijing there are 20million population. Imagine if just one chinese baby is killed then byebye china. U dump 1/3of ur milk to the sea...someone seems has a lovely anti chinese chinese wife..someone laught about chinese kill chinese at thr same time insist chinese shuld just buy nz milk product no matter what happen..isn't this funny...

[RTM]

Yes Moosie. I guess its good to see Fonterra taking one for the team ! Silver lining in every cloud eh !

[slimwin]

I don't think the Chinesse reaction is an over reaction. It's the only reaction and I'd hope the same one our govt would take in a role reversal. It only has to go wrong once, with a child death, to become a very serious criminal investigation.

It's where they go from here with it. Only time will tell.

[False Profit]

So are we going to see the cash from these sell offs going to Dil, PGW etc etc...

[MAC]

Astonishing a drop of 4.5% in SP and a drop of 20M in market cap for an exposure to one shipment of product sent to China worth ??? for which ATM have probably already received revenues.

Being a small and dynamic entrant into the China infant formula market they will probably just send the next shipments to SE Asia and get similar prices.

Good luck buyers, there may not be enough sellers to go around this afternoon.

[blobbles]

So China banning all dairy products from New Zealand... Oh and Australia and oh... Let's just throw coke in there too, isn't an over reaction? Lucky A2 doesn't have another shipment on the way or it would be turned back even though it has nothing to do with the problem!

I wait with baited breath for any casualties or people getting sick... I suspect the number will be zero. Meanwhile another 3 children died in the province I am in a few days ago from being fed the wrong mushrooms in their school lunch. Yeah, milk is such a big problem here!

My wife isn't anti China, she just lives in the place and understands it.

[The BOWMAN]

So China banning all dairy products from New Zealand... Oh and Australia and oh... Let's just throw coke in there too, isn't an over reaction? Lucky A2 doesn't have another shipment on the way or it would be turned back even though it has nothing to do with the problem!


Hey blobbles, where did you get the confirmed information about China banning NZ and AUS dairy products? I don't see any Chinese media reporting this overall ban. Fonterra is rejecting this claim as well. Did you get the news from NZ media or from Chinese source? It could be NZ media trying to make the story more dramatic than it should be?

[zymwh]

I guess he got the news from his wife

[blackcap]

Just discovered they are listed on the ASX too, so scratch that, I DID buy Fonterra today :D

Can you not buy NZ stocks with AUD funds KW? Do Australian brokers not have access to the NZ market? Because our brokers here offer access to the Australian market and we do not have to have AUD to be able to buy Aussie shares.

[lascar]

So China banning all dairy products from New Zealand... Oh and Australia and oh... Let's just throw coke in there too, isn't an over reaction? Lucky A2 doesn't have another shipment on the way or it would be turned back even though it has nothing to do with the problem!

I wait with baited breath for any casualties or people getting sick... I suspect the number will be zero. Meanwhile another 3 children died in the province I am in a few days ago from being fed the wrong mushrooms in their school lunch. Yeah, milk is such a big problem here!

My wife isn't anti China, she just lives in the place and understands it.

Hi blobbles,

According to the news (http://www.bloomberg.com/news/2013-08-04/china-halts-fonterra-milk-powder-imports-in-blow-to-new-zealand.html)here, China bans "all whey protein and milk-based powder sourced from Fonterra, whether exported from New Zealand or Australia". Where did you get the information saying "China banning all dairy products from New Zealand"?

[blackcap]

Yes, but the commission is horrendous. US $130 through Comsec!

Geez that is terrible. I guess there is not much demand for NZ stocks across the ditch. Vice versa its a different story. We get commision (internet broker) of $29 AUD on stocks bought in australia and can settle in NZd or AUD.
But to keep on topic, this stock may well benefit longer term from the fallout. Tis interesting to see that the exposure A2 has in NZ is so low. I cannot find it anywhere (wellington area) but hear from friends in Australia that its all the rage there.

[blobbles]

Hi blobbles,

According to the news (http://www.bloomberg.com/news/2013-08-04/china-halts-fonterra-milk-powder-imports-in-blow-to-new-zealand.html)here, China bans "all whey protein and milk-based powder sourced from Fonterra, whether exported from New Zealand or Australia". Where did you get the information saying "China banning all dairy products from New Zealand"?

Sorry, yes for accuracy this was taken from Western media... I will go have a look at the Chinese sites...

It does appear some western sites are sensationalising it a bit, according to the Chinese government main portal though there are certain sets of milk powder which are affected and being recalled according to the official site. You can find the information from the Chinese government website:

http://www.gov.cn/

If you do a search for New Zealand (新西兰) you can find the link to this:

here: http://www.gov.cn/gzdt/2013-08/04/content_2460949.htm

Which translated roughly says "The quarantine and inspection agency of China has received word from the NZ government departments of a recall of 3 batches of Nutricia Karicare infant formula (then lists them and how to check the batch number). Consumers should not be feeding their babies with the products indicated. The recall does not involve an other companies products. This decision is based on advice received by Fonterra on the night of August the 3rd. Fonterra said a batch of raw materials used to produce the milk powder may be contaminated so in a preventative measure is recalling these goods. The General Administration of Quality Supervision, Inspection and Quarantine (the agency in China doing the inspections and action on this) says something like (I aren't 100% clear on this, my Chinese isn't that good!) the product is not imported in the normal way? Seems a strange thing to say but yeah.

After that, it appears it should only affect these fonterra goods, so bag a bargain in ATM I say!

Western news is reporting it to be worse than it is, like:
http://www.bbc.co.uk/news/world-asia-23565651
http://www.radionz.co.nz/news/dairy2013/216071/china-and-russia-ban-fonterra-milk-products

Note that I can't find anything about a blanket ban on NZ milk powder on the Chinese sites. This does not mean it isn't happening, it could be happening and not being reported on the Chinese side, which is very common.

This is my opinion:
I suspect more accurate information about what is being banned will come out from the west before it comes from China, so its entirely possible all milk powder goods are being stopped at the border and/or have been banned for a set amount of time as punishment (classic Chinese tactic!). This is likely being pushed to include as many products as possible from elements inside China, the milk industry here who has been getting a beating (rightly so) for being ridiculously unsafe.

[janner]

Really, its a storm in a teacup.

If I had NZ funds, I'd be buying Fonterra today.

Think that there is more to be gained from ATM than Fonterra KW..

Took the opportunity to top up @.64

[biker]

Nice to see some buyers getting a discount and good to see the market returning the share price to where it finished last week.
A serious situation for Fonterra but the Media does love to beat these things up. Good to see the market not over reacting.

[MAC]

Absolutely, has been a good opportunity for new investors to enter today also, congratulations if you picked up some of the 1.5M shares traded earlier today, welcome aboard.

[waikare]

My understanding is that ATM start selling their baby formula to China next month, it appears they have been tainted by Fonterra.

[lascar]

Sorry, yes for accuracy this was taken from Western media... I will go have a look at the Chinese sites...

It does appear some western sites are sensationalising it a bit, according to the Chinese government main portal though there are certain sets of milk powder which are affected and being recalled according to the official site. You can find the information from the Chinese government website:

http://www.gov.cn/

If you do a search for New Zealand (新西兰) you can find the link to this:

here: http://www.gov.cn/gzdt/2013-08/04/content_2460949.htm

Which translated roughly says "The quarantine and inspection agency of China has received word from the NZ government departments of a recall of 3 batches of Nutricia Karicare infant formula (then lists them and how to check the batch number). Consumers should not be feeding their babies with the products indicated. The recall does not involve an other companies products. This decision is based on advice received by Fonterra on the night of August the 3rd. Fonterra said a batch of raw materials used to produce the milk powder may be contaminated so in a preventative measure is recalling these goods. The General Administration of Quality Supervision, Inspection and Quarantine (the agency in China doing the inspections and action on this) says something like (I aren't 100% clear on this, my Chinese isn't that good!) the product is not imported in the normal way? Seems a strange thing to say but yeah.

After that, it appears it should only affect these fonterra goods, so bag a bargain in ATM I say!

Western news is reporting it to be worse than it is, like:
http://www.bbc.co.uk/news/world-asia-23565651
http://www.radionz.co.nz/news/dairy2013/216071/china-and-russia-ban-fonterra-milk-products

Note that I can't find anything about a blanket ban on NZ milk powder on the Chinese sites. This does not mean it isn't happening, it could be happening and not being reported on the Chinese side, which is very common.

This is my opinion:
I suspect more accurate information about what is being banned will come out from the west before it comes from China, so its entirely possible all milk powder goods are being stopped at the border and/or have been banned for a set amount of time as punishment (classic Chinese tactic!). This is likely being pushed to include as many products as possible from elements inside China, the milk industry here who has been getting a beating (rightly so) for being ridiculously unsafe.

Ok, I should have disclosed that I am a Chinese living in NZ. So reading either Chinese or English news is not a problem for me.

From what I read, I dont think China bans all dairy products from New Zealand. The Chinese government link you gave above is just a kind of warning and it seems you misread it. The real content in that statement is warning that Nutricia recalls 3 batches of Nutricia Karicare infant formula which are selling in NZ market. The part which you aren't 100% sure about is just saying people should avoid those 3 batches of formula if they bought them from other sources (because those 3 batches aren't selling in China officially). Nutricia's Chinese official website (http://www.karicare.com.cn/shengming.html) still sells Nutricia Karicare infant formulas with a statement saying "product recall - New Zealand only" . If you can read both Chinese news and English news you will find all news are bull**** sometimes although the western media do have a bit more credibility than the Chinese one.

And I dont think the Chinese government is over-reacted. Dont you think that is what a government should do? Especially when you consider that the Fonterra claimed only stage 1 is affected at first but now stage 2 is recalled as well. Who knows what else could happen? At this stage, my relatives in China do switch to the infant formula made in Dutch temporarily.

This event could hurt Fonterra but it should be fine from the long-term perspective. There are no illness or death reported after all.

[lascar]

It is such a beat up, especially since no one has actually gotten ill from the product, and that it is limited to such a small amount of product. Food products are recalled all the time - check out http://www.recalls.gov.au/content/index.phtml/itemId/952823 for the list of recent recalls, both Fonterra and A2 have been on that list in the last few years. I'm not sure why the media are sensationalising it, which is probably making customers and countries much more nervous than is necessary. Some media are behaving as if NZ entire national GDP is been eliminated over night!

As far as I'm concerned, we have a track and trace food safety system so that things like this DO happen. The system works. If I were Chinese, I'd rather use NZ formula that is subject to rigorous testing, than Chinese formula which is not. There are always inherent risks with the food we eat - lysteria, salmonella, botulism, blah blah blah - I still eat oysters and seaford despite suffering food poisoning twice (once from eating at Disneyland in LA, but pretty sure Disneyland is still open and going strong!).

Chinese do prefer foreign brand formula if they can afford. Discovering Botulism is not the major problem. The real problem is it take so long for Fonterra to react.
NZ formula is just one of foreign brands.

[goldfish]

Well said KW I agree. You would think tv3 wants to ruin fonterra, and our economy.

[MAC]

Here’s some new numerical sales data and targets released today by Peter Nathan.

In regard to Australian and Chinese infant formula sales;

"We'll be on shelf by the end of August and we are looking at a 5 per cent market share. We are looking at selling 400,000 units of 900 grams per tin in Australia," he said. It expects to ship $60 million worth of formula to China by 2016”.

In regard to Australian fresh milk sales;

"We have over 7 per cent market share in grocery and our sales are up 50 per cent on the prior year. We are still the fastest rising dairy product," he adding, saying a2 is the No. 1 and No2 branded milk within Coles and Woolworths respectively”.

Great news from Australia, over 7% market share in milk now achieved, now have their sights on 5% market share in infant formula also.

To put the China story in perspective, at FY12 ATM total revenues were 61M, they are now aiming at 60M in revenues from China infant formula sales alone by 2016.

And, of course, all that market share comes with an A2 price point premium over all their A1 competitors.

http://www.news.com.au/lifestyle/food/formula-scare-source-of-new-business-for-australian-company-specialising-in-8216a28217-digestionfriendly-milk/story-fneuz92c-1226691601421

[MAC]

Back in June, Geoff Babidge whilst at a conference in Europe, suggested that ATM may potentially also enter the USA and Canada market within the next 12 months. There's no shortage it seems of market or ambition.

[MAC]

You know, ………. at a time when one of their A1 competitors has botulism and sat on the matter putting the entire industry at risk, ATM could well have just put an announcement into the market saying, not our problem, wasn’t our factory, we’ll be right mate.

But instead they chose to be bold, engaged directly with the media, conveyed a positive vision for the future, and affirmed their current place and position within the market and with facts in support.

I have to say that I’m increasingly approving of the management style of both Geoff Babidge and Peter Nathan.

ATM are already a growing NZ success story, something for other local companies to aspire to I say.

[gv1]

You know, ………. at a time when one of their A1 competitors has botulism and sat on the matter putting the entire industry at risk, ATM could well have just put an announcement into the market saying, not our problem, wasn’t our factory, we’ll be right mate.

But instead they chose to be bold, engaged directly with the media, conveyed a positive vision for the future, and affirmed their current place and position within the market and with facts in support.

I have to say that I’m increasingly approving of the management style of both Geoff Babidge and Peter Nathan.

ATM are already a growing NZ success story, something for other local companies to aspire to I say.

Yes, I agree with you. This co to watch for.

[janner]

Nice little trade, in at $5.85 out at $6.17 (AU$) - not a bad return for 2 days of no work :D

Of course you are correct on that one KW.. Mine is long term..

[JohnnyTheHorse]

68 cent resistance has been broken, so a potential trade could be on the cards. Only a few weeks until a results update too. Will be watching closely over the next few days.

Disc: Not currently holding, sold out at previous peak.

[MAC]

This article on the Perich Family’s success in Freedom Foods and A2 Corp seems to be a fair commentary on ATM’s present position. The bottom line for me though is articulated well as below which summarises simply and succinctly why this company has such long term value as an investment within global markets.

“A2’s success goes some way to show the importance of differentiation in a market crowded by similar products. While generic branded fresh milk at the big supermarkets sells for as little as $2 for a two-litre bottle, A2 sells for $5 for a two-litre bottle”.

http://www.brw.com.au/p/business/tony_perich_rise_fortune_milk_rich_68iUGOny1CQRIhf hFNqaML

[Joshuatree]

"the business has identified a product which has substantial potential" Geoff Babbage. How long ago was that and why havnt they proved it has benefits?

"There is NO evidence to suggest that A2 milk has any additional benefits to health than other types of milk" says Eithne cahill, a nutritionist for Dairy Australia.

Maybe its that that took if off my watch list. More fool me , so far ; seems its the Marketing which is making the diff?

[MAC]

It's ultimately the family that assess the benefits at home and then vote at the supermarket, and voting for A2 they are. The health professionals will debate the benefits, perceived or otherwise, for years if not decades to come.

The more debate, the more awareness, the more growth in market share for ATM.

Could well be a multiyear trend here, suspect 70c will be looking cheep looking back.

[MAC]

Look, ....., here’s another one, the debate goes on, fantastic !

“A1 causing cardiovascular disease and insulin dependent diabetes”

What a great prelude to ATM moving into the US & Canada market.

http://www.prweb.com/releases/2013/5/prweb10782325.htm

[Joshuatree]

Am going thru threads in order to be better informed; the Australian post is helpful page 14 post 207 by sparky.

[Joshuatree]

For anyone researching like me
My suspicions that A2 Milk are doing well is proven correct. Check out this story from The Australian:


http://www.theaustralian.com.au/business/companies/as-supermarket-price-war-continues-premium-a2-milking-success-for-all-its-worth/story-fn91v9q3-1226546274296



As supermarket price war continues, premium A2 milking success for all it's worth


WHILE dairy farmers and processors blame the supermarket milk price war for cutting margins to unsustainably low levels, one high-priced brand is raking it in.

Coles and Woolworths have been selling their in-house branded milk for $1 a litre since January 2011, driving a shift in consumer spending away from name-brand milk.

But A2 milk -- which sells for $5 for a two-litre bottle, a premium of 150 per cent to private label -- has seen its sales skyrocket.
"We've grown tenfold in the past five years, it's been phenomenal," said A2 Australia chief Peter Nathan, adding much of this growth has been recorded since the milk price war began.

"Our growth has accelerated in the past two years, particularly in the past 12 months, which has been our strongest period of growth both in percentage and absolute terms."

Figures from industry researcher Aztec National Grocery show two-litre bottles of full-cream A2 are now the most popular milk purchase in Australia, and the 19th most-purchased grocery item overall.Despite ongoing price deflation across the grocery sector and with milk in particular, A2 has held its prices steady. "Some of our branded competitors have reduced their prices in response to the price war, but we've maintained our premium price position," Mr Nathan said.

The milk takes its name from the A2 protein found in milk produced by a minority of dairy cows, which for some is more easily digested than the more common A1 protein in most cow's milk.

"We help farmers find cows that only produce the A2 protein and form herds with them, and people who say they can't ordinarily drink milk tell us they can drink A2 without discomfort," Mr Nathan said.

"There's a bit of a lactose-intolerance myth in Australia -- our research has found 25 per cent of people identify themselves as intolerant to dairy, but only about 5 per cent of those are actually diagnosed as lactose-intolerant, so we think the rest are reacting to A1." The A2 milk is also free of permeate, a milk byproduct from the cheese manufacturing process that has been used to bulk out whole milk in order to save costs.

Public outcry over news that some milk processors were adding permeate last year led major processors to phase out its use -- but Mr Nathan said the the damage to the brands was already done, all to the benefit of A2.

"We were always permeate-free -- it's allowable under the food standards code, but we believed consumers wanted to know what was going into their milk, and that transparency has enhanced the trust in our brand through that period," he said.
"For the brands that have taken it out, consumers want to know why it was there in the first place, so there's a degree of scepticism about those brands."

A2 also pays farmers a premium for producing A2 milk --a welcome relief in an industry squeezed by falling global dairy prices and the shift to supermarket brands.

"It's all natural and there's never been any permeate, and consumers are willing to pay a premium for that, so we can pay farmers a premium," Mr Nathan said.

"Consumers respond to a brand when they perceive they're getting value, but if they think the only difference is the label, they'll trade down to the supermarket brands."

A2 is listed on the New Zealand Stock Exchange, and last year raised $20 million in capital to fund foreign expansion.

[hilskin]

ATM looking like it is about to push new highs. A bit of volume recently and buyers support to boot.

[blackcap]

And its got through that irksome 70 cent mark which seemed to block it continuously ;)

[JohnnyTheHorse]

It appeared like there were a couple of big sellers drip feeding out at 70 cents. Quite possible that the off-market transactions have been them selling their last few. If so, I'm sure new highs could be happening soon (Annual report in a week or so too).

[blakecb]

Yeah I feel really positive about this company and the stride upward today was excellent. I think there is every chance it will move up fast.

Disc: Holding

[blakecb]

Now 73cps and it doesn't look like there is much resistance to it going higher, looking better and better for a strong move upward!

[Ginger_steps_]

Hey Guys - First post! Thanks for all the good info Ive read around the forum the last 6 months - Im an absolute amateur so I need all the advice I can get!

Regarding A2 - Im (kiwi) living in NSW Australia - I searched A2's website looking for supermarkets that stocked A2 - according to the website none of the supermarkets around me stock it - but they actually do stock A2 (which i drink now - call it investing in myself!) - I take this as a good sign for the next report. FYI - these are small supermarkets in a town with 4000 population.

Furthermore, I caught up with a dairy farmer at a chamber of commerce meeting a month back - with only 100 cows he was in the process of splitting the herd to separate the A2 cows. He said previously the organisation taking the A1 milk wouldnt allow him to split the herd - but now they have eased up a bit. He recons as a result many farmers in this region (mid coast NSW) are starting to do the same as they are fetching a higher price for the milk.

Also for those not aware - A2 now also have TV adverts in Aussie.

Onwards and upwards for A2!

[MAC]

Welcome aboard to you Ginger Steps.

Alas it seems A2 is not much known here in NZ like it is in NSW and VIC, even Wagga had A2 when I lived there. Onwards and upwards indeed, in the UK now, next the US then Europe.

[blakecb]

Hey Guys - First post! Thanks for all the good info Ive read around the forum the last 6 months - Im an absolute amateur so I need all the advice I can get!

Regarding A2 - Im (kiwi) living in NSW Australia - I searched A2's website looking for supermarkets that stocked A2 - according to the website none of the supermarkets around me stock it - but they actually do stock A2 (which i drink now - call it investing in myself!) - I take this as a good sign for the next report. FYI - these are small supermarkets in a town with 4000 population.

Furthermore, I caught up with a dairy farmer at a chamber of commerce meeting a month back - with only 100 cows he was in the process of splitting the herd to separate the A2 cows. He said previously the organisation taking the A1 milk wouldnt allow him to split the herd - but now they have eased up a bit. He recons as a result many farmers in this region (mid coast NSW) are starting to do the same as they are fetching a higher price for the milk.

Also for those not aware - A2 now also have TV adverts in Aussie.

Onwards and upwards for A2!

Yeah great first post Ginger steps and really good Aussie info, so thanks!

[bull....]

what day are there results announced? is it next week

[hilskin]

FYI
Just been on the A2 facebook page and discovered that a2 Milk is a proud sponsor of MasterChef Australia (https://www.facebook.com/MasterChefAustralia?directed_target_id=0) 2013.
Great way to push the brand in front of millions of Australians.

[MAC]

My take is that ATM are fairly valued at present, and I’d be content with them adequately meeting guidance and continuing the steady up-trend.

ATM have been selling into the UK via the Wiseman JV for less than a year to June 2013, so we should not expect too much just yet in the way of revenues, and there will be as a matter of growth, JV costs to consider. I would be satisfied if ATM have entered with an inaugural part year (9 month) market share of 0.5%, IMO this would represent a very good result in respect to the Australian ramp up when at that stage.

Infant formula product sales in China were not planned until September 2013 so therefore we will not see any revenue contribution at FY13, but we may see lead in and ramp up costs.

Australian revenues will be impacted by the move in exchange rate.

ATM guidance is FY13 EBITDA of 11.2M before intercompany charges. I'm calling for FY13 revenues of 92M (+48%) and NPAT of 5.0M (+18%) as being a good solid result whilst ATM are investing heavily in future growth.

[blakecb]

We'll we will soon find out....annual results announcement tomorrow.

You'll likely be pleased to know Mac that I'm holding A2 "long-term" !

[MAC]

Well done blakecb, hope we all prosper together.

[blakecb]

My take is that ATM are fairly valued at present, and I’d be content with them adequately meeting guidance and continuing the steady up-trend.

ATM have been selling into the UK via the Wiseman JV for less than a year to June 2013, so we should not expect too much just yet in the way of revenues, and there will be as a matter of growth, JV costs to consider. I would be satisfied if ATM have entered with an inaugural part year (9 month) market share of 0.5%, IMO this would represent a very good result in respect to the Australian ramp up when at that stage.

Infant formula product sales in China were not planned until September 2013 so therefore we will not see any revenue contribution at FY13, but we may see lead in and ramp up costs.

Australian revenues will be impacted by the move in exchange rate.

ATM guidance is FY13 EBITDA of 11.2M before intercompany charges. I'm calling for FY13 revenues of 92M (+48%) and NPAT of 5.0M (+18%) as being a good solid result whilst ATM are investing heavily in future growth.

You were pretty much on the money there MAC, well done.

[iceman]

Nice 1,000,000 bid in at 74c as well!!

Could be Sparky !

[Hoop]

The depth is showing an opening at 75c a break of resistance at 74 and therefore adding another buy signal to add to the collection
All excellent news TA wise

http://i458.photobucket.com/albums/qq306/Hoop_1/ATM28082013.gif (http://s458.photobucket.com/user/Hoop_1/media/ATM28082013.gif.html)

[iceman]

The depth is showing an opening at 75c a break of resistance at 74 and therefore adding another buy signal to add to the collection
All excellent news TA wise
http://i458.photobucket.com/albums/qq306/Hoop_1/ATM28082013.gif (http://s458.photobucket.com/user/Hoop_1/media/ATM28082013.gif.html)

Thanks for that snippet Hoop. I'm a happy holder and very keen on adding a few more this morning after this good result.

[MAC]

A good solid result indeed with clear reinforcement for the forward growth initiatives in both products and markets. Entry into the US could be potentially enormous, you just have to google to get a feel for the awaiting demand.

7.4% market share in Australia now, up from 4.8% at FY12. It makes their FY16 1.8% UK market share target seem a little conservative to me.

It’s also very satisfying to see ATM in a position to successfully uphold legal proceedings against those that may infringe their IP.

I’m not sure about the merits in joint listing on the ASX, it does seem for now that ATM are prepared to fund growth in the UK and China markets from Australian cashflow. They have $20M in cash and no debt so we shouldn’t expect a capital raising.

I've adjusted my HY14 valuation slightly to $1.10

[blakecb]

Yeah I'm thrilled with the result and with the prospects of this company. There just seems to be enormous take-up of A2 and the company seems to be succeeding extremely well when entering new markets.

I particularly liked the guy from Aussie saying many farmers over there were now separating their A2 cows out so as to sell more milk to A2 Corp. It definitely reveals demand is going up.

Charts are a go, so as I see them, all things are in alignment for this company.

[SirPrize]

Hi guys, first time stock buyer and new member here! Bought in at 0.77 - big mistake? :)

[MAC]

Hello SirPrize, welcome to the forum and ATM.

No I really don't think so, continue to research, hang in there for a few months, and you may well be quite pleased with that buy, lots of growth ahead for ATM and good fundamentals.

[SirPrize]

MAC & Sparky, thank you for the prompt replies!

Sparky // what I value it at?

[Hoop]

Hi guys, first time stock buyer and new member here! Bought in at 0.77 - big mistake? :)

probably...

And welcome :)

[nextbigthing]

probably...

And welcome :)

What makes you say that Hoop?

[SirPrize]

Hoop! Thank you.

In all transparency I invested nickels and dimes. This will be a good learning experience for me.

I did my research on A2 milk and I found it to be a healthy stock to invest in. Evidence suggests I'm helping the world become healthier.

[Lawt]

Evidence suggests I'm helping the world become healthier.

And you are - I feel much better just knowing that you are pushing up the price of ATM for me.