ATM - A2 Milk Corporation Limited

[jim9358]

Quite a price hammering at a 43c drop in a week to date, that's big even for A2.

Good to clean out "chicken little" investors ("...sky is falling in, the sky is falling in...") for all the shares to be taken up by steady (logical), serious investors! ...feeling twitchy on another buy-up soon ;-)

[Muppett]

Good to clean out "chicken little" investors ("...sky is falling in, the sky is falling in...") for all the shares to be taken up by steady (logical), serious investors! ...feeling twitchy on another buy-up soon ;-)

At what price would you buy in again, the 26 week yearly low was $1.38?

[couta1]

At what price would you buy in again, the 26 week yearly low was $1.38? He already bought some last week at $2.10 so anytime about now would be good for him, will be oversold soon so close to bottom IMO, would take a catastrophe to get near $1.38.

[Muppett]

Just wanted to see how big his balls were. No doubt he will tell us when at what price he bought more shares at. As the shakeout has occurred, I await eagerly.

AGM should be good?

[jim9358]

Just wanted to see how big his balls were. No doubt he will tell us when at what price he bought more shares at. As the shakeout has occurred, I await eagerly.

AGM should be good?

Mine? Not very big! LOL Still a learner although been watching and "playing" with little 16 years. . The legal battle has me cautious only coz others could run and make my 2.1 look real bad. Could bound away once the legal biffo goes "our" way! ...do you think?

ATM couldn't do much better than look at the rationales here, well put by several, for their legal argument IMHO ;-)

[sb9]

https://nzx.com/companies/ATM/announcements/288418

Challenger has increased their stake by another 7.5 mln shares, nice...

[sb9]

http://farmersweekly.co.nz/section/dairy/view/coalgate-sale-september-1

Happy Valley to set up new A2 milk plant in Waikato region @Otorohanga...

[Harrie]

http://farmersweekly.co.nz/section/dairy/view/coalgate-sale-september-1

Happy Valley to set up new A2 milk plant in Waikato region @Otorohanga...

I wonder if we are going to hear about a new contract with a Waikato based IF producer at the November meeting, to ensure supply can meet the demand, and that this new plant is in response to increasing demand for a2 IF emanating from that region putting pressure on existing producers? Reading between the lines that announcement unintentionally mentioned a2 IF capability but in so doing suggested a possible announcement along those lines IMO.

[Leftfield]

Nice SP bounce back above 2.00.

[sb9]

I wonder if we are going to hear about a new contract with a Waikato based IF producer at the November meeting, to ensure supply can meet the demand, and that this new plant is in response to increasing demand for a2 IF emanating from that region putting pressure on existing producers? Reading between the lines that announcement unintentionally mentioned a2 IF capability but in so doing suggested a possible announcement along those lines IMO.

They're a smart bunch the A2 team, aren't they? Making sure the supply is slowly but certainly beefed up to meet ever increasing demand. With SML in south island and this new facility in north island, they're making sure the logistics side is also addressed long with supply.

They had cash on hand of about $69m as at time of FY results time, pretty sure some it being pumped into further capacity investments either directly or indirectly.

[Harrie]

They're a smart bunch the A2 team, aren't they? Making sure the supply is slowly but certainly beefed up to meet ever increasing demand. With SML in south island and this new facility in north island, they're making sure the logistics side is also addressed long with supply.

They had cash on hand of about $69m as at time of FY results time, pretty sure some it being pumped into further capacity investments either directly or indirectly.

I'm not sure that a2mc will be making any investment into capacity. Its not their business, as it is not with Synlait. The manufacturers will make their own decisions and invest their own capital to increase capacity based on demand. a2's $69 mio will be spent on increasing sales in their target market. That's my understanding anyway but happy to be corrected on that.

[NT001]

I'm not sure that a2mc will be making any investment into capacity. Its not their business, as it is not with Synlait. The manufacturers will make their own decisions and invest their own capital to increase capacity based on demand. a2's $69 mio will be spent on increasing sales in their target market. That's my understanding anyway but happy to be corrected on that.

Fully agreed Harrie. It's not at all clear where the planned Otorohanga plant might fit into ATM's operations. There seems to be no corporate or shareholder link, nor any hint that the owners/operators have even had contact with ATM. The new group merely say the plant will have A2 capability as well as organic, which doesn't mean much. And they won't be in operation until well into 2018, by which time the dairy scene in the North Island will have further evolved. In my view, ATM needs to be well along the planning road now for starting up NI operations next year.

You're absolutely right that investing capital in new production facilities is not in line with ATM's deeply ingrained modus operandi. There will be other uses for the $69m cash on hand.

[sb9]

"A2 Milk could become a takeover target again: fund manager"

Headline of article from NBR behind pay wall, could someone summarise key points...(I know its illegal post entire article), thx.

[Leftfield]

"A2 Milk could become a takeover target again: fund manager"

Headline of article from NBR behind pay wall, could someone summarise key points...(I know its illegal post entire article), thx.

Speculation that because Harbour Asset Management and Greenscape capital have both increased their ATM holdings since the last results announcement, that ATM is 'undervalued' and 'should feel vulnerable.'
However, it is noted that some ATM execs and Dirs have been selling down small portions of their stakes, e.g. Babidge who recently sold 1 mill shares.
So very much speculation at this stage. Could just be the fund managers pumping. Time will tell.
IMHO any SP decline below 1.90 represents a buying opportunity (disc holding and not recommending.)

[sb9]

Speculation that because Harbour Asset Management and Greenscape capital have both increased their ATM holdings since the last results announcement, that ATM is 'undervalued' and 'should feel vulnerable.'
However, it is noted that some ATM execs and Dirs have been selling down small portions of their stakes, e.g. Babidge who recently sold 1 mill shares.
So very much speculation at this stage. Could just be the fund managers pumping. Time will tell.
IMHO any SP decline below 1.90 represents a buying opportunity (disc holding and not recommending.)

Sweet, thanks for that Left field.

Well, this Friday on 16th the court case is back to hearing between Lion and A2, watch out how it unfolds...

[Leftfield]

Sweet, thanks for that Left field.

Well, this Friday on 16th the court case is back to hearing between Lion and A2, watch out how it unfolds...

Crikey that's quick..... I had thought such litigation would take years.

[sb9]

Crikey that's quick..... I had thought such litigation would take years.

Well proceedings start tomorrow, however might take few days/weeks before we know the verdict. And judge categorically said science isn't the issue behind A2 milk, just the tactics used by Lion promoting their pura milk brand vis a vis A2 milk brand.

[Leftfield]

Well proceedings start tomorrow, however might take few days/weeks before we know the verdict. .

Here's an update.....http://www.smh.com.au/business/consumer-affairs/legal-battle-between-a2-milk-and-dairy-farmers-lion-turns-to-science-20160916-gri2js.html

Looks like the substantive case will not be held until Nov 2017.

[Harrie]

Here's an update.....http://www.smh.com.au/business/consumer-affairs/legal-battle-between-a2-milk-and-dairy-farmers-lion-turns-to-science-20160916-gri2js.html

Looks like the substantive case will not be held until Nov 2017.

Would a2mc succeed in slapping an injunction on Pura to stop it using the labelling a2mc is complaining about until the results of the hearing are known?
Seems to me that if a complaint is made where the public could be misled into believing a product is not wholly what its labelling is leading the public into thinking it is based on another brand, then the offending labelling should be removed until the court case has concluded.

[Sideshow Bob]

http://viewer.zmags.com/publication/2d605a27#/2d605a27/32

A2 and China

[sb9]

Nice bounce in price today after lacklustre past few days...probably due to Chinese Daigous Expo over the weekend in Sydney and Melbourne and apparently they're scrambling for A2 products both Infact Formula and A2 Adult milk powder...

[sb9]

Hmmm...based on ASX closing price of 1.87 y'day it translates to $2 at .935 fx rate, bit an anomaly??

[sb9]

https://www.nbr.co.nz/article/wife-a2-milk-director-builds-stake-b-195606

All in the family :)

[Leftfield]

Another vote of confidence.....

Summary for Challenger Limited (ACN 106 842 371) and its entities in Annexure3.
For this disclosure,—


(a) total number held in class: 67,144,981

(b) total in class: 725,620,065

(c) total percentage held in class: 9.25%


For last disclosure,—


(a) total number held in class: 59,855,519

(b) total in class: 725,320,065

(c) total percentage held in class: 8.25%

[blobbles]

Followed by a loss of confidence?

https://www.nzx.com/companies/ATM/announcements/291401

[sb9]

Followed by a loss of confidence?

https://www.nzx.com/companies/ATM/announcements/291401


A mere 50,000 sold by a director out of his 1,000,000 shares won't qualify for loss of confidence in my opinion. Blame Bega cheese (ASX) and Fonterra for that. I bet it'll recover pretty quick all lost gains...

[dobby41]

A mere 50,000 sold by a director out of his 1,000,000 shares won't qualify for loss of confidence in my opinion.

I'd agree with that.
50k sold - he brought a new boat or needs a few bob for a holiday.

[kizame]

Yep was more the fact that the infant formula market in China is now very competitive and experiencing discounting,according to the agm of Bega.
But ATM are a niche supplier of A2 formula so maybe not so much for them.

[CatO'Tonic]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11739692

[iluab]

Agree with all that from Citi and what they project is contemporary with infant formula volume guidance from ATM's supplier in Mid Canterbury.

FY17 NZ$1.50 valuation from me, expect a drop on agm day when the market wakes up to all this and ATM issue guidance. Synlait will be a much better performer than ATM over the next 12 months I reckon.

[couta1]

Agree with all that from Citi and what they project is contemporary with infant formula volume guidance from ATM's supplier in Mid Canterbury.

FY17 NZ$1.50 valuation from me, expect a drop on agm day when the market wakes up to all this and ATM issue guidance. Synlait will be a much better performer than ATM over the next 12 months I reckon. Not really an issue for long term holders as the article itself points out, the SP could triple looking a few years down the track IMO.Citi may also have ulterior motives in their recommendations.

[sb9]

Not really an issue for long term holders as the article itself points out, the SP could triple looking a few years down the track IMO.Citi may also have ulterior motives in their recommendations.

Well said, anything big players come up with in terms of their recommendation I take it with a grain of salt be it sell or buy.

Looks like Citi are playing a game out there.

[sb9]

FY17 NZ$1.50 valuation from me,

Hope it gets there, I can get another big bite...

[iluab]

Not really an issue for long term holders as the article itself points out, the SP could triple looking a few years down the track IMO.Citi may also have ulterior motives in their recommendations.

It's not just Citi Couta respectfully, Synlait have issued very low growth guidance for infant formula which would have been based on ATM consultation, both SML and ATM assessment through their market analysts based in China, and no doubt through their respective direct communications with Chinese regulators.

Sometimes when emotionally invested in a stock it is hard to accept the reality of the situation, but as you say, over the very long term ATM should recover, the question is if you are invested in ATM at present is, are you prepared to wait up to two years for that recovery, and will this bull market have ended by then.

[King1212]

look at all the big insto sucked up by WYN....you would think with all their best analysts they would safe??? so sometimes I think share market is a luck......

[couta1]

For what it's worth, median target price of $2.22 from 5 analysts, 4 with hold and 1 with sell recommendation, so sell very much the underdog.

[iluab]

For what it's worth, median target price of $2.22 from 5 analysts, 4 with hold and 1 with sell recommendation, so sell very much the underdog.

Not really, analysts adjust their positions and those of their high net worth clients before they release or update their price targets.

You need to consider this as a matter of factual analysis;

Analyst consensus is presently for $514m revenues in FY17 or around 45% yoy growth. To achieve that level of growth ATM would need to achieve around 75% growth in infant formula sales.

Synlait have already provided guidance such that infant formula growth will be around 12.5%.

That is an unsurmountable gap for ATM to overcome even at the most optimistic end of the spectrum.

Some analysts may update their valuations prior to the agm, most if not all will probably wait until ATM confirm their guidance which is almost certainly likely to be in line with that of Synlait, as the two companies consult and work closely behind the scenes on such matters.

In my opinion SML will perform much better than ATM over the next 12 months, and I've been rotating from ATM into SML over the last few weeks.

Hope won't make you rich Couta, dispassionate analysis will make you rich.

Trust this assists you and your thought processes, it’s never easy recognising the downside when you’ve held stocks for a long time, don’t ever let them become like your kids, they’re just assets to be bought or discarded.

[Ginger_steps_]

Not really, analysts adjust their positions and those of their high net worth clients before they release or update their price targets.

You need to consider this as a matter of factual analysis;

Analyst consensus is presently for $514m revenues in FY17 or around 45% yoy growth. To achieve that level of growth ATM would need to achieve around 75% growth in infant formula sales.

Synlait have already provided guidance such that infant formula growth will be around 12.5%.

That is an unsurmountable gap for ATM to overcome even at the most optimistic end of the spectrum.

Some analysts may update their valuations prior to the agm, most if not all will probably wait until ATM confirm their guidance which is almost certainly likely to be in line with that of Synlait, as the two companies consult and work closely behind the scenes on such matters.

In my opinion SML will perform much better than ATM over the next 12 months, and I've been rotating from ATM into SML over the last few weeks.

Hope won't make you rich Couta, dispassionate analysis will make you rich.

Trust this assists you and your thought processes, it’s never easy recognising the downside when you’ve held stocks for a long time, don’t ever let them become like your kids, they’re just assets to be bought or discarded.

Or......You could look at this scenario with a hint of optimism and a dash of logic (a touch of respect sure wouldn't hurt either).

Second half Revenue was $213.7M - therefore zero growth from 2nd half would equate to $427.4M annual revenue. A measly 20% growth basically gets us to you analysts consensus of $514 M (hardly an "unsurmountable gap").
Add to that a2 have multiple new distributers in China, growth in adult milk powder as a flow on from exposure from IF, increasing fresh milk sales, cashflow positive UK, NZ sales coming on board in 2017, a2 sales direct to chinese consumers growing rapidly (beasty margins) - and don't forget the 40% increase in babies being born in China at present (which one would assume accounts for the shortage of Stage 1 Platinum IF on the market at the moment).

So, I would say that even the analysts estimates are conservative and expect a share price well north of $2.22 by FY2017. Finally, in conclusion - "You need to consider this as a matter of factual analysis" and I "Trust this assists you and your thought processes" . lol

[Ginger_steps_]

Not really an issue for long term holders as the article itself points out, the SP could triple looking a few years down the track IMO.Citi may also have ulterior motives in their recommendations. Ulterior motives such as trying to get a lower average buy price for the impending boom? See attached image (broker data) for Citi group's net accumulation of 840 000 shares at an average price of 1.87 only a couple days before issuing their Sell rating. 8422

[iluab]

Ha, ok Ginger, do consider though a couple of things, the Synlait 12.% IF growth guidance would place ATM with overall annual revenue growth of around about between 10 and 15%, so your 20% is probably very much actually on the optimistic side.

Secondly, there is also a chance of us actually seeing a drop in ATM IF revenues due to the pending regulatory changes in the first half of FY17, it is hard to imagine, I get that, but CVT just showed us that it can actually happen with the loss they just made when facing a very similar set of cross boarder regulatory changes.

We shall just have to sit tight and wait, one can do that risk free on the sidelines, or one can do that stressed holding ATM shares and riding it through come what may, each to their own really.

[Ginger_steps_]

Ha, ok Ginger, do consider though a couple of things, the Synlait 12.% IF growth guidance would place ATM with overall annual revenue growth of around about between 10 and 15%, so your 20% is probably very much actually on the optimistic side.

Secondly, there is also a chance of us actually seeing a drop in ATM IF revenues due to the pending regulatory changes in the first half of FY17, it is hard to imagine, I get that, but CVT just showed us that it can actually happen with the loss they just made when facing a very similar set of cross boarder regulatory changes.

We shall just have to sit tight and wait, one can do that risk free on the sidelines, or one can do that stressed holding ATM shares and riding it through come what may, each to their own really.
Sorry - are you saying 20% growths is overly optimistic for a company that has grown 125% + in the last FY? Check out their available sales data of late (alibaba, JD etc) - they are one of few IF companies growing in China since the last regs round, and at an impressive rate to boot. It's a VERY unique product that compliments Asian digestive issues rather well according to the studies.

Secondly, the regulations to come into effect in early 17 are already known at this point and will only increase visibility of a2 in China, and in turn boost sales. IMO The only factors that will limit ATMs growth in the coming year is production capability and a regulation that already exists, being the requirement to register any new processor with the Chinese authorities. Safety scare

Yes as we shall wait and see, in the meantime best of luck cycling your equity into SML. IMO it's a sure way to stunt your returns moving forward, but not a bad investment by any means.

[iluab]

It’s a matter of perspective, you said all they need to do is replicate 2H16 revenues, not once but twice, for 1H17 and 2H17, and then perform 20% better than that yet again for good measure.

Do stop and have a think about just how speculative that really is;

Those 2H16 revenues were achieved at the peak of the infant formula and grey market channel boom, and at a time when the regulatory headwinds were not yet in effect.

There are headwinds going forward now,

Companies like Danone are telling us that their infant formula sales to China through online and grey market channels are dropping, and ATM are way way more exposed to the grey channel than the likes of Danone.

Comvita, in the face of similar regulatory changes recently made a HY loss stating that was entirely due to those regulatory changes.

Synlait have provided guidance, it’s telling, and should not be ignored by investors.

If you run the math on that Synlait guidance in respect of ATM, it paints a forward revenue picture, with both 1H17 and 2H17 revenues below that of 2H16.

Let’s wait for the agm to see what that guidance is precisely, my only warning and recommendation to folks, is to shake off any influence from the ATM cult culture, focus on what’s real, and make the right decision, whatever that may be for you.

[Ginger_steps_]

It’s a matter of perspective, you said all they need to do is replicate 2H16 revenues, not once but twice, for 1H17 and 2H17, and then perform 20% better than that yet again for good measure.

Do stop and have a think about just how speculative that really is;

Those 2H16 revenues were achieved at the peak of the infant formula and grey market channel boom, and at a time when the regulatory headwinds were not yet in effect.

There are headwinds going forward now,

Companies like Danone are telling us that their infant formula sales to China through online and grey market channels are dropping, and ATM are way way more exposed to the grey channel than the likes of Danone.

Comvita, in the face of similar regulatory changes recently made a HY loss stating that was entirely due to those regulatory changes.

Synlait have provided guidance, it’s telling, and should not be ignored by investors.

If you run the math on that Synlait guidance in respect of ATM, it paints a forward revenue picture, with both 1H17 and 2H17 revenues below that of 2H16.

Let’s wait for the agm to see what that guidance is precisely, my only warning and recommendation to folks, is to shake off any influence from the ATM cult culture, focus on what’s real, and make the right decision, whatever that may be for you.
ATM cult culture? Ha. It was posters such as yourself regurgitating the Insto's public rhetoric that caused many in this forum to sell out around $1.30 because it so was "heavily overvalued" and miss the leg up to $2.60!

[iluab]

Thanks for asking, I did very well out of my three year investment in ATM and sold at $2.

I think ATM will remain a growth co over years to come, they have all the opportunity in the world to progress the a2 difference as the first mover and potentially market leader in years to come.

But things don't go in straight lines Ginger, and 2017 is likely to be one of those flatish years for ATM. Likely, being an aggregate of forward plausible risk outcomes, that's the best an investor can do and assess.

Cult culture, yes, you just have to look on hotcopper to see just how many folk go no further in investment thinking then "a2 is good" must then buy and hold, then it's faith, belief, hope, practically a religion for them based on very little attention to real analysis and with a myopic view of anything else including investment advice they should really be actually taking note of.

I think ATM could well correct post agm, I would genuinely like to be proven wrong though, it could even possibly correct for up to 12 months.

I expect SML will have a better year, most of their stars are aligning, I've rotated from ATM to SML now.

[smalltrader]

$112.50 Million Revenue Quaterly, if my math is right will be $450 million annually?

[Leftfield]

Yee ha go ATM.......SP doing well this week and now first quarter results indicating FY17 up 27% on FY16.

The investor presentation also does well explaining the A2 difference. https://nzx.com/files/attachments/247651.pdf

[sb9]

$112.50 Million Revenue Quaterly, if my math is right will be $450 million annually?

Well that number is for their quiet quarter where things go boringly normal....later on in the year when all fun starts with lots of online sales (like Chinese new year, Single day (11/11) coming up etc...).

My point being the FY17 will be at least close to $500mln.

[sb9]

Yee ha go ATM.......SP doing well this week and now first quarter results indicating FY17 up 27% on FY16.

The investor presentation also does well explaining the A2 difference. https://nzx.com/files/attachments/247651.pdf

I particularly love this bit from presentation:
-Continued and consistent growth in consumer demand for a2 Platinum® infant formula, in contrast to expectations of volatility in certain research reports

Would say a slap in the face for Citi for their recent downgrade....

[blobbles]

$112.50 Million Revenue Quaterly, if my math is right will be $450 million annually?

Interesting part on the UK in the announcement, 50% pcp. Looks like the start of a growth curve to me. Wait, does pcp mean what I think it means? (percentage points?)?? Be great if the UK takes off, with 3x the population of Aus, would be a huge win for the company. UK reported break even last year so growth there now will add to the bottom line.

Although they may have some issues in China short term, I am liking their figures considering the importation issues which should be having huge headwinds. They haven't grown this quarter from last, but from memory this is their quietest quarter.

And the slap down to the downgrade reports was awesome! A2 are usually conservative with FY estimates, so reaffirming that they are still on target for growth is a big win. Read between the lines I say.

Excellent stuff.

[smalltrader]

Agree with you blobbles. Hope they will shed some more light at the AGM about HY numbers..

[Ginger_steps_]

Thanks for asking, I did very well out of my three year investment in ATM and sold at $2.

I think ATM will remain a growth co over years to come, they have all the opportunity in the world to progress the a2 difference as the first mover and potentially market leader in years to come.

But things don't go in straight lines Ginger, and 2017 is likely to be one of those flatish years for ATM. Likely, being an aggregate of forward plausible risk outcomes, that's the best an investor can do and assess.

Cult culture, yes, you just have to look on hotcopper to see just how many folk go no further in investment thinking then "a2 is good" must then buy and hold, then it's faith, belief, hope, practically a religion for them based on very little attention to real analysis and with a myopic view of anything else including investment advice they should really be actually taking note of.

I think ATM could well correct post agm, I would genuinely like to be proven wrong though, it could even possibly correct for up to 12 months.

I expect SML will have a better year, most of their stars are aligning, I've rotated from ATM to SML now.

It appears this one is going in a straight line, well not entirely - others would say exponential ;)

[Yoda]

For what it's worth, median target price of $2.22 from 5 analysts, 4 with hold and 1 with sell recommendation, so sell very much the underdog.
I think you said on another post that you bought some last week? Well done . Good timing. Im going to wait until it is over its last high point , and see what change i have in my pocket after the election . One more sleep to go ! GOD BLESS AMERICA ... and everyone else too.

[iluab]

It appears this one is going in a straight line, well not entirely - others would say exponential ;)

Not really, I'd settle for flat to low growth though Ginger,

Lets see what guidance comes from the agm, based on the Q1 revenue at $112.5 we are probably looking at revenue guidance of around $450M, perhaps a less depending how much ATM discount for regulatory disruption as Synlait already have, vs $514 which is the present analyst consensus.

So, in my humble opinion, the market is generally still likely to be underwhelmed on agm day, despite today's presentation and all the good work ATM are doing.

We will need to wait and see if they can hit UK&US segment expectations given they fell well short of guidance at FY reporting achieving only 50% of expected revenues. The market has lost confidence a little in the US entry, esp because of the increase capital requirement also.

Still ATM could surprise and avoid some regulatory disruption, and if SML can somehow respond with short notice a2 orders, than both companies could potentially do quite well, especially SML which is well undervalued on the NZX at the moment but is due to list on the ASX before xmas, the ASX will just lap SML up I reckon.

[Leftfield]

And of course we have ATM's successful court action to look forward to in late 2017 :t_up:

My bet is a ATM win, (more than likely settled out of court before the hearing.)

[blobbles]

Big difference in the close prices today, ATM should shoot to 2.14 tomorrow if it matches Aus price.

[smalltrader]

Unless Trump wins :(

[winner69]

I particularly love this bit from presentation:
-Continued and consistent growth in consumer demand for a2 Platinum® infant formula, in contrast to expectations of volatility in certain research reports

Would say a slap in the face for Citi for their recent downgrade....

Good one

Pretty useless some of those guru analysts

[Sideshow Bob]

Big difference in the close prices today, ATM should shoot to 2.14 tomorrow if it matches Aus price.

Picked it Bobbles. $2.13 at the moment (ATM).........

[blobbles]

Picked it Bobbles. $2.13 at the moment (ATM).........


Good way to make a bit of money if you were in there this morning. I tried but aimed too low :-(

[iluab]

Surprising that SML hasn't moved yet on the news also given that's where the infant formula comes from, they must be reconsidering their expectations also to the upside for FY17, a bit for a food chain lag perhaps, excusing all goods puns.

[Leftfield]

Surprising that SML hasn't moved yet on the news also given that's where the infant formula comes from, they must be reconsidering their expectations also to the upside for FY17, a bit for a food chain lag perhaps, excusing all goods puns.

With respect, there has never been much correlation between ATM and SML as this chart shows. (Well since mid 2015 that is.)

8441

[iluab]

Ah yeah, good point there Left Field, good effort with the chart too, we will just have to wait for it to show in the sml guidance I guess, not long now, few days perhaps.

[sb9]

http://www.stuff.co.nz/business/farming/86537607/playing-chinas-infant-formula-game

From the article...

"Recently, I asked an independent Shanghai-based market research CEO as to his impression of the success of the a2 Platinum brand over there. His response was four words: 'it is absolutely huge'.

[iluab]

It's agm day tomorrow, which way will the SP go ?

My bet is a dip on disappointing guidance, analysts are looking for $506m in revenues, my estimate is under $460m, but there may be enough in the commentary to attenuate some of that.

[see weed]

It's agm day tomorrow, which way will the SP go ?

My bet is a dip on disappointing guidance, analysts are looking for $506m in revenues, my estimate is under $460m, but there may be enough in the commentary to attenuate some of that.
Normally sp goes down with good results like it has in the past. Not too worried, holding is still 70k in the green from the 50c days:t_up:.

[Ginger_steps_]

It's agm day tomorrow, which way will the SP go ?

My bet is a dip on disappointing guidance, analysts are looking for $506m in revenues, my estimate is under $460m, but there may be enough in the commentary to attenuate some of that.
"Why thanks for asking" How very optimistic of you to expect Synlait to increase guidance and a2 to deliver a poor guidance. Hasn't got anything to do with you "cycling into Synlait" and missing a2's 15% sp increase has it?

[iluab]

"Why thanks for asking" How very optimistic of you to expect Synlait to increase guidance and a2 to deliver a poor guidance. Hasn't got anything to do with you "cycling into Synlait" and missing a2's 15% sp increase has it?

Wouldn't normally reply to cynics, but yes cycling from ATM into SML is the right call in my opinion as an investor and as a matter of four years of continual analytical research on these companies.

Perhaps you would like to offer and share your estimate for ATM's FY17 guidance.

No one has to do so including myself, but it's useful as an investor to compare notes with rational others who don't just by and sell based on belief, hope, hype, feel.

We may very well see the guidance provided by both co's come together over the next week as they are paddocks apart at present.

The ATM agm is today, SML agm is next Tuesday.

[King1212]

possible dividend payment coming end of financial year:t_up:

[iluab]

"4M17 EBITDA up 22.9% reflecting growth in infant formula sales".

Analyst estimates are presently for 60% EBITDA yoy, so ATM not meeting the market on that one thus far.

"4M17 Revenues $155.2M" implying $465M in annual revenues, not far from my estimate of $460M, but short of market expectations at $506M

Earnings to date look good though ay, $22M is a beat !

[bobxia]

Why share price has gone up 7% if they missed the market expectation?

[blobbles]

"4M17 EBITDA up 22.9% reflecting growth in infant formula sales".

Analyst estimates are presently for 60% EBITDA yoy, so ATM not meeting the market on that one thus far.

"4M17 Revenues $155.2M" implying $465M in annual revenues, not far from my estimate of $460M, but short of market expectations at $506M

Earnings to date look good though ay, $22M is a beat !

Assuming no growth from now. I am betting on ~10-20% growth through the year, so looking at ~510-540m FY17. I believe the first 3 months of this year are usually their slowest, so I think it will only get better from here. They also are always conservative and issue profit/revenue upgrades throughout the year. Never remember them issuing a downgrade...

22m earnings to date is fantastic. Looking like 100m earning full year IMO. Brilliant and sets them up for a potential 10c divi end of the year. Looking very attractive for dividend hounds.

[Leftfield]

22m earnings to date is fantastic. Looking like 100m earning full year IMO. Brilliant and sets them up for a potential 10c divi end of the year. Looking very attractive for dividend hounds.

Agree... hard to fault this company. Exciting news for holders.

[Ginger_steps_]

"4M17 EBITDA up 22.9% reflecting growth in infant formula sales".

Analyst estimates are presently for 60% EBITDA yoy, so ATM not meeting the market on that one thus far.

"4M17 Revenues $155.2M" implying $465M in annual revenues, not far from my estimate of $460M, but short of market expectations at $506M

Earnings to date look good though ay, $22M is a beat !
Bit short of expectations?? haha - look at their 2H vs 1H revenues for the last 3 years - revenue growth in the second half always heavily exceeds the first. Now we have a poss divvy on the cards - i think your timing was terrible. Have you stopped to consider that a2's new agreement with Synlait could basically be taking over all of Synlait's capacity and then adding a further 12.5 growth?? A2 could significantly grow revenue while Synlait has modest growth. My revenue estimate - easily $510M. IMO somewhere closer to $530M.

[okay]

Good presentation and meeting. Both David and Geoff are good at giving a clear, concise and well articulated message.
I was fortunate enough to go to the meeting last year and felt the same that day.

[whatsup]

Great start today up 4% = .09 !!

[sb9]

Thoughts on AGM and Numbers:

- Watched the AGM thro' virtual link and it was great and well conducted.

- Chairman very inspiring with good sense of humour, so does Geoff CEO and rest of board very professional, positive and upbeat.

- As per numbers there were too many positives and very strong growth lines. Couple of key takeaways for me were,
- Sales for Jul-Sep period were 112.5 m from previous update and
Sales for Jul-Oct period were 155.2 m from y'day's AGM

It represents sales for Oct were 42.7 m, make what you out of that and not to mention what'll be for Nov if we include 11/11 or singles day sales ( would say at least 50m)
Based on these, I would be really surprised if they don't exceed $500m for full year.

- 4 additional new products launches planned for 2017 of which notable one is Adult Nutrition.

- All in all 5 start performance from company and for shareholders, couldn't have asked for anything more....

May see another upgrade in few months time once 6 months trading is completed.

Disc- Happy with original parcel from 58c range and topped y'day with another parcel before results were out at 209.

GLTAH :t_up:

[blobbles]

Thoughts on AGM and Numbers:

- Watched the AGM thro' virtual link and it was great and well conducted.

- Chairman very inspiring with good sense of humour, so does Geoff CEO and rest of board very professional, positive and upbeat.

- As per numbers there were too many positives and very strong growth lines. Couple of key takeaways for me were,
- Sales for Jul-Sep period were 112.5 m from previous update and
Sales for Jul-Oct period were 155.2 m from y'day's AGM

It represents sales for Oct were 42.7 m, make what you out of that and not to mention what'll be for Nov if we include 11/11 or singles day sales ( would say at least 50m)
Based on these, I would be really surprised if they don't exceed $500m for full year.

- 4 additional new products launches planned for 2017 of which notable one is Adult Nutrition.

- All in all 5 start performance from company and for shareholders, couldn't have asked for anything more....

May see another upgrade in few months time once 6 months trading is completed.

Disc- Happy with original parcel from 58c range and topped y'day with another parcel before results were out at 209.

GLTAH :t_up:

Exactly what I figured out. On no growth from now revenue per month is 512m. Is a serious upside to this so could easily hit 550m with decent growth. At that rate 100m profit is not looking impossible for next FY. Likely Nov revenue figure is more like 50m with singles day...

I believe A2 only represents ~1% of infant formula market share for China last year too. Plenty of room for movement there...

Plus add in their new adult health products they are due to release, serious upside potential in the pipeline.

Plenty to like, can't see much negative. UK will make a profit this year, will be interesting to see how USA does. Pumping 20m into there is the only way to find out though!

[iluab]

What an outstanding NPAT result, congrats to all ATM holders

Up 6.5% thus far, lets see what the Aussies add this arvo.

Nice to see some volume going through today on Synlait too, SML agm on Tuesday.

[NZSilver]

Surely ATM is a prime takeover target for a larger dairy company exporting or looking to export formula to China.

[bottomfeeder]

Surely ATM is a prime takeover target for a larger dairy company exporting or looking to export formula to China.

Let me see NTA 16 cents, EPS 4.33 cents. Share Price $2.55. Just who is silly enough to takeover this company. A2 milk is produced by a lot of Dairy Farmers in combination with A1.

[see weed]

Let me see NTA 16 cents, EPS 4.33 cents. Share Price $2.55. Just who is silly enough to takeover this company. A2 milk is produced by a lot of Dairy Farmers in combination with A1.
Hello bottomfeeder, welcome to atm. sp is a bit lower than $2.55, but looks like it is heading in that direction:t_up:. As for take over, they had their chance at 50c, as I was telling customers in Countdown a year ago....Look here a2 milk,a nz company, healthier choice, and you can buy shares in a2 for only 50c, get in fast before someone else does:D.

[Ginger_steps_]

It’s a matter of perspective, you said all they need to do is replicate 2H16 revenues, not once but twice, for 1H17 and 2H17, and then perform 20% better than that yet again for good measure.

Do stop and have a think about just how speculative that really is;

Those 2H16 revenues were achieved at the peak of the infant formula and grey market channel boom, and at a time when the regulatory headwinds were not yet in effect.

There are headwinds going forward now,

Companies like Danone are telling us that their infant formula sales to China through online and grey market channels are dropping, and ATM are way way more exposed to the grey channel than the likes of Danone.

Comvita, in the face of similar regulatory changes recently made a HY loss stating that was entirely due to those regulatory changes.

Synlait have provided guidance, it’s telling, and should not be ignored by investors.

If you run the math on that Synlait guidance in respect of ATM, it paints a forward revenue picture, with both 1H17 and 2H17 revenues below that of 2H16.

Let’s wait for the agm to see what that guidance is precisely, my only warning and recommendation to folks, is to shake off any influence from the ATM cult culture, focus on what’s real, and make the right decision, whatever that may be for you.
:D :eek2::):p:t_up: Meet the cult Iluab - they aren't such a bad bunch once you "stop" and listen to what they are actually trying to tell you. ;)

[see weed]

If ATM was to pay a dividend at end of financial year, what would be your estimate dividend for the year. I will start by predicting 2c.;) Anyone else care to add.

[blobbles]

If ATM was to pay a dividend at end of financial year, what would be your estimate dividend for the year. I will start by predicting 2c.;) Anyone else care to add.

I raise your 2c to 4.5c.

[see weed]

I raise your 2c to 4.5c.
Which is about 34-35 million payment? to all sh.

[blobbles]

Which is about 34-35 million payment? to all sh.

Yep exactly right. I figure 90m profit, tax, plus others off 530m revenue. Lucrative business... they already have a decent pile of dosh in the bank to fund growth for a few years. Can't see why they would want to build it unless they are looking to buy businesses up or down the supply chain (unlikely IMO). Come on, give us (you and me seeweed!) long suffering sharehoders that stuck by the company from 50c days some relief!

[mondograss]

I think it's likely they will want a good cash balance to do the value-add stuff (which may or may not involve taking a stake in other businesses like a cheese maker etc) so I'd say 2c is a safer bet.

[see weed]

Yep exactly right. I figure 90m profit, tax, plus others off 530m revenue. Lucrative business... they already have a decent pile of dosh in the bank to fund growth for a few years. Can't see why they would want to build it unless they are looking to buy businesses up or down the supply chain (unlikely IMO). Come on, give us (you and me seeweed!) long suffering sharehoders that stuck by the company from 50c days some relief!
I gotta better idea. Why not pay a 2c div every 3 months. It would keep the sp more stable and keep the sh happy. Then gradually move div up every 3 months in line with profit upgrades:). What do ya think bottomfeeder, start low and slowly raise the div every 3 months.

[Leftfield]

I think it's likely they will want a good cash balance to do the value-add stuff (which may or may not involve taking a stake in other businesses like a cheese maker etc) so I'd say 2c is a safer bet.

There is also a possible payout when/if they win their court case.

Can't help thinking the Nov 2017 court date may work out well with the findings from their Chinese, Aus, USA and NZ research.

Interesting times ahead for holders.

[Yoda]

A good uplift in SP last year, and 10 months of consolidation. Now the SP passes its previous all time high, . Most shares continue up 10-20 % past their old high, with good annual growth results , and on expanding products .
It seems to me it is all the natural organic- sort-of-stuff going up. BLT. PIL. ATM .... THE WORLD IS WAKING UP TO "FUNCTIONAL MEDICINE" MAYBE?

[Leftfield]

A good uplift in SP last year, and 10 months of consolidation. Now the SP passes its previous all time high, . Most shares continue up 10-20 % past their old high, with good annual growth results , and on expanding products .
It seems to me it is all the natural organic- sort-of-stuff going up. BLT. PIL. ATM .... THE WORLD IS WAKING UP TO "FUNCTIONAL MEDICINE" MAYBE?

Hope you're right as I hold all three !!:t_up:

[777]

A good uplift in SP last year, and 10 months of consolidation. Now the SP passes its previous all time high, . Most shares continue up 10-20 % past their old high, with good annual growth results , and on expanding products .
It seems to me it is all the natural organic- sort-of-stuff going up. BLT. PIL. ATM .... THE WORLD IS WAKING UP TO "FUNCTIONAL MEDICINE" MAYBE?


All time high was 261(yet to repeat) so looking at 300 on your theory.

[Yoda]

All time high was 261(yet to repeat) so looking at 300 on your theory.
Yes ,thankyou, you are of course right , i was refering to the liniar chart and not that amaizing one day trade in feb. Who can tell the future eh? Maybe 270 and -a pull back? :cool: Anyway, thanks for pointing that out .

[Ginger_steps_]

Nice strong finish on the asx - record close if I remember correctly. Considering singles day wasn't included in the 4M figures and we are about to hit the typically high sales period - the half year report could see this puppy's sp knocking on the $3 door specially if the new adult nutritional products are well received.

[see weed]

Just sold half my ATM holding for 2.39 and made $37,800 profit:t_up:.

[Ninefingers]

Great stuff! Your A2 odyssey has been good reading :cool:

[fiasco]

Just sold half my ATM holding for 2.39 and made $37,800 profit:t_up:.

Congrats! Patience paying off.

Your shout at the next meet up? :D

[King1212]

Just sold half my ATM holding for 2.39 and made $37,800 profit:t_up:.

if u waited a bit longer u could sell at $2.45;)

[sb9]

if u waited a bit longer u could sell at $2.45;)

Think its being rerated at this point of time, not sure where it consolidates this time around.

The fact that they made $22m NPAT for first four months has blown many punters away as to what lies ahead. And that not accounting for singles day (11/11) numbers.

One more positive upgrade soon will see this one soar to $3 quite easily. That's my take anyway, always pls DYOR.

[King1212]

Think its being rerated at this point of time, not sure where it consolidates this time around.

The fact that they made $22m NPAT for first four months has blown many punters away as to what lies ahead. And that not accounting for singles day (11/11) numbers.

One more positive upgrade soon will see this one soar to $3 quite easily. That's my take anyway, always pls DYOR.

tempted to sell now too,,,yes singles day not included..plus first dividend payment on horizon.....so will keep it a bit longer

[longy]

if u waited a bit longer u could sell at $2.45;)

I would care for little if to sell at 2.39 or at 2.45 with that kinda profit ayh. Anyhow, I sold some and left the profit in.

[see weed]

if u waited a bit longer u could sell at $2.45;)
Decided to buy more AIR = 20c div. If ATM pay a 5c div, then I am better off with AIR in the mean time. Can always jump back into ATM at a later date. My remaining ATM shares are still up $39,200, so loving life at the moment:t_up:.

[sb9]

Hmm...keeps rolling, can't help but get feeling that the current run isn't just purely based on earnings outlook as provided at ASM.

Something cooking behind scenes, someone accumulating in large parcels over past few days, a TAKEOVER perhaps??? Must keep an eye for any forthcoming SSHs, shouldn't be too far away for at least one of them to come out.

Also noticed the shorts on this stock on ASX have dropped quite substantially over last week or so. All in all makes for an interesting and exciting few days ahead.

[Leftfield]

Hmm...keeps rolling, can't help but get feeling that the current run isn't just purely based on earnings outlook as provided at ASM.

Something cooking behind scenes, someone accumulating in large parcels over past few days, a TAKEOVER perhaps??? Must keep an eye for any forthcoming SSHs, shouldn't be too far away for at least one of them to come out.

Also noticed the shorts on this stock on ASX have dropped quite substantially over last week or so. All in all makes for an interesting and exciting few days ahead.

I personally hope you are not right about a takeover. It would be a shame to lose this company just as it heads to dividend paying profitability. That said, ATM would be a great addition to many international brands.

Another possibility is speculation that the court case is going to be settled out of court favourably for ATM? (Pure speculation - I stress.)

[Ginger_steps_]

Hmm...keeps rolling, can't help but get feeling that the current run isn't just purely based on earnings outlook as provided at ASM.

Something cooking behind scenes, someone accumulating in large parcels over past few days, a TAKEOVER perhaps??? Must keep an eye for any forthcoming SSHs, shouldn't be too far away for at least one of them to come out.

Also noticed the shorts on this stock on ASX have dropped quite substantially over last week or so. All in all makes for an interesting and exciting few days ahead.

Lots of Aussie brands selling into China have slashed profit guidance below last years while a2 has increased profit by 155% - I would say this is just a significant re-rate and the large parcels are merely large / international investors / istos etc taking a seat on the rocket, expecting guidance to be significantly higher once singles day etc are factored in. Not to mention the latest studies released yesterday. $3 by feb is my call - if not earlier.

[Yoda]

All time high was 261(yet to repeat) so looking at 300 on your theory.
Nearly there :)

Im not sure why people sell down in an up trend.? Its just getting good and you jump off the train as it leaves the station .
I understand the benefits of dividends i think, but ATM made the equivalent of a 5% div today.... And another 20 % to go i think . Im am looking at my weakest players to buy a few more. Ride the train ,i say... DYOR Mine is pretty weak as a newbie.:)

[see weed]

Bit of a sting in it's tail this avo. It is doing what it always does and does it very well.

[sb9]

Bit of a sting in it's tail this avo.

Well, blame it Bellamy's who came out with terrible business outlook. Until now they were lucky basking in ATM's positive ASM glory and now this.

I'm sure being in same industry they all get hammered but I can't help but think that ATM is taking all market share from Bellamy's and Blackmores in recent months.

[whatsup]

Bl22dy D Ters in Aussie getting caught with T + 2 !!

[fiasco]

Just grabbed a few at 6.90, it's as if they noted they are making a loss.

[blobbles]

Just grabbed a few at 6.90, it's as if they noted they are making a loss.

Jeez mate, you overpayed for those, ATM currently selling at $2.33! You trying to influence the price? :-p

[fiasco]

Already an A2 holder :D

[couta1]

Today's sell off either a fine example of irrational selling or Bellamy's providing the catalyst needed by the profit takers to spring into action?

[Ginger_steps_]

Today's sell off either a fine example of irrational selling or Bellamy's providing the catalyst needed by the profit takers to spring into action? Definitely the former. Might be a slow climb back up to recent highs but Im still confident we'll see $3 around FY17. Im quite happy that a2 and Bellamy's will be disassociated once and for all when a2 release their HY results.

[sb9]

https://nzx.com/companies/ATM/announcements/293818

CBA beginning to have substantial holding now....

[Leftfield]

ATM doing nicely these days. Meanwhile over the ditch, HotCopper thread very bullish and predicting a $A 3.00 SP.

One comment I liked is that 'ATM already winning their court case due to positive publicity and general distrust of 'Big Diary'.

DYOR (Disc; Holding and happy)

[winner69]

Just as well A2 not as useless as this Bellamy's mob
http://www.smh.com.au/business/retail/how-life-for-milks-market-darling-turned-sour-in-china-20161208-gt7a3i.html


Cool chart in the story tells it all - A2 is a winner

[Bjauck]

Just as well A2 not as useless as this Bellamy's mob
http://www.smh.com.au/business/retail/how-life-for-milks-market-darling-turned-sour-in-china-20161208-gt7a3i.html


Cool chart in the story tells it all - A2 is a winner Thanks for the link - a somewhat fickle business sector for all participants. Interesting story about the Bellamy success going sour - mixed with a whiff of possible lack of continuous disclosure and insider trading with the CEO and Chairman selling some of their substantial stakes before the share price collapse. All companies need to be vigilant and compliant. They also need to nurture the daigou lest they experience their wrath as happened to Bellamy...

[macduffy]

And another view:

https://www.investsmart.com.au/investment-news/will-a2-milk-turn-sour/138588?utm_source=isgroup&utm_medium=email&utm_campaign=free-weekend-091216

[Leftfield]

And another view...seems Bellamy's woes are ATM's gains.

http://www.brisbanetimes.com.au/business/retail/how-life-for-milks-market-darling-turned-sour-in-china-20161208-gt7a3i.html

8515

[blobbles]

And another view...seems Bellamy's woes are ATM's gains.

http://www.brisbanetimes.com.au/business/retail/how-life-for-milks-market-darling-turned-sour-in-china-20161208-gt7a3i.html

8515

This is more my thinking - they are direct competitors in China. The demand hasn't dropped, so a drop there for one can only be others gain...

[whatsup]

BAL in a T H in Aussie, good or bad ? whatsup !

[sb9]

BAL in a T H in Aussie, good or bad ? whatsup !

At least they're trying to use TH very wisely this around after their latest fiasco....

Lets wait and see what the announcement might be...

[couta1]

BAL in a T H in Aussie, good or bad ? whatsup ! Probably about to show just how bad things are in terms of affecting their bottom line. That will be another confirmation of how well A2 are doing in comparison, although you wouldn't think so going by the panic selling today.

[Baa_Baa]

As ATM broke down through the short term technical rising trend-line support today, it followed through for a 5% decline. Call it panic selling if you want to, though more likely just savvy traders scalping a tidy profit off the recent rise. Probably has nothing to do with the fundamentals either, as ATM does seem to have settled into range-trading situation for the past year, so hardly surprising traders take advantage of it. I strongly doubt that there's any panic selling, more like savvy selling.

[Leftfield]

As ATM broke down through the short term technical rising trend-line support today, it followed through for a 5% decline. Call it panic selling if you want to, though more likely just savvy traders scalping a tidy profit off the recent rise. Probably has nothing to do with the fundamentals either, as ATM does seem to have settled into range-trading situation for the past year, so hardly surprising traders take advantage of it. I strongly doubt that there's any panic selling, more like savvy selling.

There is little doubt yesterday's ATM SP decline has been caused by the uncertainty of BAL (ASX) in trading halt. This halt expected to be removed/explained/resolved on Wed and it will be interesting to see how ATM's SP responds after that.

The key learning at this stage is that what effects BAL may at some stage effect ATM in the extremely volatile Chinese market. However, in the short term, I suspect BALs loss will be ATM's gain.... time will tell.

Long term there are many dangers for any business too reliant on China. International diversification is the key to a healthy ATM in the long run. (DYOR - ATM holder)

[winner69]

This chart is a great chart

A2 are winners

No Worries

[sb9]

This chart is a great chart

A2 are winners

No Worries

Couldn't agree more there winner, the chart does say a zillion words...

Out of interest, do you own any A2 shares?

[couta1]

As ATM broke down through the short term technical rising trend-line support today, it followed through for a 5% decline. Call it panic selling if you want to, though more likely just savvy traders scalping a tidy profit off the recent rise. Probably has nothing to do with the fundamentals either, as ATM does seem to have settled into range-trading situation for the past year, so hardly surprising traders take advantage of it. I strongly doubt that there's any panic selling, more like savvy selling. You call them savvy sellers, I call them panic sellers and over on hotcopper they call them dumb sellers, the question is which description is correct? Looks like panic to me when the stock sales are going in the opposite direction to the sales of the company in the trading halt, perhaps the hotcopper description is correct after all.

[biker]

You call them savvy sellers, I call them panic sellers and over on hotcopper they call them dumb sellers, the question is which description is correct? Looks like panic to me when the stock sales are going in the opposite direction to the sales of the company in the trading halt, perhaps the hotcopper description is correct after all.

I sold the last of my ATM at 2.44. No panic, and I don't consider it dumb.
Simply a matter of a company getting over-bought and over capitalised. ( worth $1.77 billion? Sometime maybe, but not yet)
There remains the option now, with the price falling through $2.21, to buy back in and end up with 10% more shares or remain out of the market risk free - upside and downside, all the way back to 2.44.
Panic? Stupid? To my simple mind it just makes sense.

[Leftfield]

You call them savvy sellers, I call them panic sellers and over on hotcopper they call them dumb sellers, the question is which description is correct? Looks like panic to me when the stock sales are going in the opposite direction to the sales of the company in the trading halt, perhaps the hotcopper description is correct after all.

Agree Couta, this article (http://www.smh.com.au/business/retail/how-life-for-milks-market-darling-turned-sour-in-china-20161208-gt7a3i.html) from the SMH claims that BAL's losses are ATM's gains.

[couta1]

I sold the last of my ATM at 2.44. No panic, and I don't consider it dumb.
Simply a matter of a company getting over-bought and over capitalised.
There remains the option now, with the price falling through $2.21, to buy back in and end up with 10% more shares or remain out of the market risk free - upside and downside, all the way back to 2.44.
Panic? Stupid? To my simple mind it just makes sense. Well done, I'm only referring to the selling since Bal was put in a trading halt, after all if that wasn't occuring the price wouldn't be at $2.21, irrational selling would be selling for that reason only which is clearly the case IMO.

[sb9]

Well done, I'm only referring to the selling since Bal was put in a trading halt, after all if that wasn't occuring the price wouldn't be at $2.21, irrational selling would be selling for that reason only which is clearly the case IMO.

With all great numbers behind them if this is what A2 sp is treated while BAL in is in TH, wonder what might happen to their sp once the announcement is out.

And as they say a good report does not need 2 trading days to announce, just that they're trying to dress up the best they could or have been asked by ASX to come up with more detailed explanation. In any which case, doesn't look bright for BAL and unfortunately being in the same sector and a competitor A2 will've to bear the brunt in the short term.

Just to refresh everyone's memory A2 came out with trading update/upgrade on 18th Dec last year after their ASM update in Nov and I'm hopeful there'll be one coming out next week which will be after BAL's drama is over...

[sb9]

Well, there we've it.

BAL should've come out with an announcement before trading commenced today on ASX and guess what nothing came out and they're suspended from trading until 21st Dec or before any news out from them, what shambles.... EPIC FAIL on Board and Management Part!!!

[winner69]

Well, there we've it.

BAL should've come out with an announcement before trading commenced today on ASX and guess what nothing came out and they're suspended from trading until 21st Dec or before any news out from them, what shambles.... EPIC FAIL on Board and Management Part!!!

EPIC FAIL ......but indicates that things are really worse than indicated (financially that is)

Obviously beyond the 'clarification' of previous 'guidance'

A2M the winners

[carrom74]

EPIC FAIL ......but indicates that things are really worse than indicated (financially that is)

Obviously beyond the 'clarification' of previous 'guidance'

A2M the winners

The Panic Slide will begin shortly....It can only be arrested if ATM comes out with some kind of re assurance...

[stevevai1983]

Just give your guys some update about china market.

My baby is 4 month old, so my wife joined a quite big online young mother group to learn and share experiences.
In the past 6 month there was very strong trend that suddenly lots of people start to buy A2 infant formula.
In china, the middle class is raising, our logic for baby is : price doesn't matter at all, we just want the best product. So it's not a price sensitive market.
Generally infant formula sells at price range of 160~220RMB but A2 is 250~260RMB. so it's the most expensive infant formula out there.
The really high price is actually helping A2 to establish a best quality "premium product" reputation.
The other thing is some of the young mothers are buying product from daigou. They will listen to daigou's recommendation, A2 has high profit margin for daigou so they always recommend A2 first..
China is a huge market and recently government allowed second baby policy which is extremely important for infant formula.

Now let's talk about some bad side:
The favorable product can change fast, daigou's recommendation can change fast too. The competition is very high.
A2's stock valuation is very rich as well, trading at 52PE. So even if A2 manage to double to profit this year, it will be still 26PE, quite high compare to NZX average.
So A2 needs to continue to grow at least 25% in 2018 and afterwards (the base value s much higher at that time)

[couta1]

The Panic Slide will begin shortly....It can only be arrested if ATM comes out with some kind of re assurance... Might get an update before Christmas. I've learnt the hard way that you should never sell this stock based on fleeting sentiment or recommendations from brokers or others for that matter, have sold parcels for a loss previously and have also sold parcels way too early and missed out on some very big gains. Best just to focus on what they have acheived to date and the fact that they are taking market share off their competitors and what that means for the future, everything else is just noise and should be ignored IMO.

[JeremyALD]

Might get an update before Christmas. I've learnt the hard way that you should never sell this stock based on fleeting sentiment or recommendations from brokers or others for that matter, have sold parcels for a loss previously and have also sold parcels way too early and missed out on some very big gains. Best just to focus on what they have acheived to date and the fact that they are taking market share off their competitors and what that means for the future, everything else is just noise and should be ignored IMO.

Completely agree this share bounces around like a YoYo. It's not unusual to see 5% gains or 5% losses on any given day. I made the mistake of selling this way too cheap and then it significantly bouncing.

I would say with this share don't buy on a high because it appears to drop before going back up again.

[Leftfield]

Sensed a bit of a turnaround in sentiment for ATM today (over $4mill shares traded) so have topped up with another 10k.

News of a proposed $200 mill investment into additional A2 milk production in the North Island has got to be good news for this niche market in the long term. Here's the report. (http://www.stuff.co.nz/business/farming/87509542/200-million-dairy-factory-proposed-for-otorohanga)

DYOR. Disc. Happy holder.

[longy]

Another substantial holder came on board.... Don't really know for sure as to why one decided increase their holding... but I won't neccessary seeing this as negative ayh.

To NZX Limited
and
To The A2 Milk Company Limited (ATM)

Relevant event being disclosed: movement of 1% or more in substantial holding

Date of relevant event: 15 December 2016
Date this disclosure made: 19 December 2016
Date last disclosure made: 13 June 2016
Substantial product holder(s) giving disclosure
Full name(s): Greencape Capital Pty Ltd.

Summary of substantial holding
Class of quoted voting products: Ordinary fully paid shares in ATM
Summary for Greencape Capital Pty Ltd

For this disclosure,--
(a) total number held in class: 60,992,227
(b) total in class: 725,620,065
(c) total percentage held in class: 8.41%

For last disclosure,--
(a) total number held in class: 53,433,733
(b) total in class: 723,300,065
(c) total percentage held in class: 7.39%

[sb9]

Until Bellamy's announcement doesn't come out, I'm afraid A2 is not going anywhere and its perfect opportunity for shorters to go hard at it.

On Bellamy's issue, although they've been given time until tomorrow I had expected some sort of news from them by today, absolutely bollocks in my opinion, no sense of protecting and looking after shareholders capital.

Whatever news might be from them tomorrow there'll be heavy selling pressure to begin with and unfortunately A2 also will not be spared. Unless there is an update/upgrade from A2 in the meantime, my guess is they will only release any new if any once Bellamy's news is out.

What change of fortunes for A2 from their ASM day in NOV to this day (all in a month), unfortunate events outside their control and in a way unrelated to them.

[Leftfield]

Agree sb9. Until BAL end their trading halt with information then ATM will continue to be hit. I'm hoping for an ATM update after the BAL update which is likely tomorrow.

In the meantime the recent increased substantial holdings notices by Challenger and Greenscape both indicate their continued strong support for ATM.

[blobbles]

Yep agree. But if you are looking at buying, there could also be a massive over reaction and a lot of upside when 2 things happen:

1. Everyone jumps out of BAL, severely weakening the SP. They subsequently look for another milk producer that is growing...
2. ATM releases OK-fantastic revenue forecasts.

Even if ATM confirm what the market is expecting in terms of revenue forecast, IMO this will probably see a good SP rise. This is because people might be thinking that it is big Chinese regulatory issues affecting BAL and those same issues might be affecting the whole market. IMO it doesn't sound like regulatory issues affecting BAL, it just sounds like not as large as expected demand for BAL product or a complete screw up by management. Less demand for their product can only be a win for ATM though as the gap in their demand is probably being soaked up by ATM.

Picking exactly when to buy ATM shares might be a bit tricky though. Quick fingers and constant watching is probably necessary. There also might be the opportunities for bargains if ATM drops like a rock in response to BAL, which will probably drop like a rock coming out of suspension on whatever news they deliver. Whatever news it is, it can't be good.

[blobbles]

Bellamy's trying to kick the can down the road:

http://www.asx.com.au/asxpdf/20161221/pdf/43dwlbzk922x15.pdf

Though does this point to a supply side disruption rather than demand/regulatory disruption?

[mondograss]

Wow, they must be really in the @#$%

[sb9]

Bellamy's trying to kick the can down the road:

http://www.asx.com.au/asxpdf/20161221/pdf/43dwlbzk922x15.pdf

Big sigh and hmmmmm....further extension until 13 Jan 2017.

Numbers must be pretty grave....

Surely this can't be sector specific just company specific, hoping ATM can put a statement to reaffirm guidance given at ASM last month. That will separate milk and water so to speak...

[Leftfield]

Agree more uncertainty due to BAL TH extension to 13 Jan.

Does the silence from ATM mean 'business as usual' and 'nothing material to disclose'? Today's upwards SP movement seems to support this theory.

My big question now is whether to include ATM in my 2017 share pick comp!?

[Sideshow Bob]

Bellamy's trying to kick the can down the road:

http://www.asx.com.au/asxpdf/20161221/pdf/43dwlbzk922x15.pdf

Though does this point to a supply side disruption rather than demand/regulatory disruption?

I think they have a 'take or pay' agreement with their suppliers - so it could be a renegotiation of this in order to realign with any drop in sales??

From The Australian: http://www.theaustralian.com.au/business/companies/bellamys-chiefs-in-crosshairs-as-investors-brace-for-bad-news/news-story/220e3250f94d1e2455d9a93327e72bb5


“There seems to be a serious disconnect between the amount of [raw materials] Bellamy’s has contracted to buy and what it is *actually now selling,” says Mr Fergie.
“They now have a [sales] volume problem, a pricing problem and a margin problem. I wouldn’t have thought that would have tipped them into insolvency, but it could be that their cash situation is dire and they are having problems making their payments [to Fonterra and Bega Cheese] because they have locked in such financially demanding take-or-pay supply contracts.

I notice they mention the F-word?? NZ's largest company.

[carrom74]

ATM just released an update....Merry x mas everyone!

[Leftfield]

Great to have ATM's position confirmed..... go baby go!

21 December 2016

NZX/ASX Market Release

Confirmation of trading performance

At the Annual Meeting of The a2 Milk Company Limited (the "Company") held on
22 November 2016, the Managing Director and Chief Executive Officer advised
that:
o Revenue for the first four months of the 2017 financial year was NZ$155.2
million (up from NZ$79.3 million in the prior corresponding period),
reflecting continued growth in infant formula and milk products;
o The revenue number also reflected significant seasonal build in sales of
infant formula ahead of the key China sales event, '11/11 Singles Day';
o EBITDA for the same period was NZ$35.5 million (representing an
EBITDA/Sales percentage of 22.9%), reflecting continued growth in infant
formula sales; and
o Operating cash flow remained strong.

The Company notes the higher level of recent commentary and interest from
shareholders relating to the infant formula market. In this context, the
Company wishes to confirm that, consistent with the trends communicated at
the Annual Meeting, the business continues to trade very strongly reflecting,
in particular, significant year-on-year growth in its infant formula
business.

[Sideshow Bob]

Great that have re-confirmed their guidance. However think there will be some residual weakness for a little while, due to the general sector. Roll on the February upodate!

[couta1]

ATM just released an update....Merry x mas everyone! Indeed and a nice Christmas present that update is. ATM is set to gain a whole lot of former Bal shareholders come Jan 13th, still cheap buying at current price.

[blobbles]

So over $100m in earnings easy, at this stage, with plenty of room for upside. Remember how well ATM has gone in 2H compared to 1H for the past few years. Could be looking at $120m quite easily.

[Leftfield]

So over $100m in earnings easy, at this stage, with plenty of room for upside. Remember how well ATM has gone in 2H compared to 1H for the past few years. Could be looking at $120m quite easily.

Happy I topped up in recent slump ..... SP heading back to 2.60 and beyond IMHO.

[BlackPeter]

Lets blame the cold weather (well, definitely too cold for the beach) which motivated me to do a bit of research into one of the forgotten companies on my "maybe interesting" watchlist.

I think I do get the idea of A2 milk ... nutritional benefits for some(?) people who have problems to digest normal milk, some IP (I assume), contractors (like Synlait) doing the work, marketing material with happy good looking children and women, and a boon for the Asian (chinese) infant formula market.

I see as well quite amazing sales growth and even revenues - overall reasonable healthy balance sheet (even if the NTA look quite meagre).

So I started to wonder where to find this amazing company ... and realised that the only contacts seem to be the webpage (which could be hosted anywhere), some PO boxes and one NZ and one Australian phone number. Ah yes, and than there is a Sydney address which seems to be part of a shopping mall.

Question - where do they work from? 4 traders mentions an Auckland headquarter and 111 employees (but no physical address). Are these staff all sitting in Geoff Babidge's garage (wherever this might be) or do they have company premises?

Do they have a reason to hide - or do they really work in a PO Box in Newmarket?

Anybody knows?

[forest]

A2 CORPORATION LIMITED (ATM)Former Name NZX
Former (or subsequent) names

FROM TO
THE A2 MILK COMPANY 08/04/2013
A2 CORPORATION LIMITED 08/04/2014
Shareholder links

COMPANY WEBSITE:
ATM email


REGISTRY:
Level 11, Deloitte House, 80 Queen Street, Auckland
Tel : +64 9 375 5998
Fax : +64 9 375 5990
RegistryWebsite RegistryEmail

[BlackPeter]

A2 CORPORATION LIMITED (ATM)Former Name NZX
Former (or subsequent) names

FROM TO
THE A2 MILK COMPANY 08/04/2013
A2 CORPORATION LIMITED 08/04/2014
Shareholder links

COMPANY WEBSITE:
ATM email


REGISTRY:
Level 11, Deloitte House, 80 Queen Street, Auckland
Tel : +64 9 375 5998
Fax : +64 9 375 5990
RegistryWebsite RegistryEmail

cheers, but I think that the physical address used to be the one of the registry. Anyway - today there are 5 companies residing at this address (including AIR, Infratil, Serko and Spark), but not ATM.

[Joshuatree]

25739b566b17d75de5cbe78760c52c3f (http://www.theaustralian.com.au/business/companies/stokes-family-backs-infant-food-float-bubs/news-story/25739b566b17d75de5cbe78760c52c3f) paywall on 2nd view

A new infant milk player(Bubs Australia) on the ASX;.Point of difference is its Goat milk, arguably superior to cows A2.

[NZSilver]

25739b566b17d75de5cbe78760c52c3f (http://www.theaustralian.com.au/business/companies/stokes-family-backs-infant-food-float-bubs/news-story/25739b566b17d75de5cbe78760c52c3f) paywall on 2nd view

A new infant milk player(Bubs Australia) on the ASX;.Point of difference is its Goat milk, arguably superior to cows A2.

at this stage bubs a very small player and has plenty of hurdles, the more I look and research into ATM the more see good continued growth with their Infant formula in china, especially with the issues BAL has had and ATM taking more market share...

[couta1]

at this stage bubs a very small player and has plenty of hurdles, the more I look and research into ATM the more see good continued growth with their Infant formula in china, especially with the issues BAL has had and ATM taking more market share... Yes, Yes and Yes again.

[sb9]

25739b566b17d75de5cbe78760c52c3f (http://www.theaustralian.com.au/business/companies/stokes-family-backs-infant-food-float-bubs/news-story/25739b566b17d75de5cbe78760c52c3f) paywall on 2nd view

A new infant milk player(Bubs Australia) on the ASX;.Point of difference is its Goat milk, arguably superior to cows A2.

One very BIG difference between goat milk and A2 milk is "TASTE"....apparently goat's milk tastes horrible....(never tried myself but heard from few friends)

[King1212]

Yes, Yes and Yes again.


Good for the quick profit...felt sorry for those bought in BUB at $.45c....ho the sp recover today. With $4m revenue n $1.2 loss...BUB has plenty way to go to compare with ATM...

[Bjauck]

One very BIG difference between goat milk and A2 milk is "TASTE"....apparently goat's milk tastes horrible....(never tried myself but heard from few friends) I liked goat's milk feta - in salads etc.

[BlackPeter]

One very BIG difference between goat milk and A2 milk is "TASTE"....apparently goat's milk tastes horrible....(never tried myself but heard from few friends)

Not sure what your friends were drinking. Maybe it was off. I tried fresh goats milk more than once - and while it tastes a bit more salty than (raw) cow milk, I certainly would not describe it as "horrible".

[Joshuatree]

Certainly no comparison at their various stages , timeframes ;..or competition. I wonder if ATM has plans for Goats milk at some point. A very popular and traditional milk in many parts of Asia , and with its own unique health benefits, would broaden their appeal and customer base.

[kiora]

Goats milk IF could be perceived by Asian popn as significantly different
http://www.everything-goat-milk.com/milk-fat.html
First, we'll look at the issue of fat globule size. Fat globules in goat milk are smaller than in cow's milk. This smaller size, combined with the lack of agglutinin, a protein that causes fat molecules to clump together, and which is present in cow's milk, has several implications.

One, because these two factors cause the fat to be more evenly dispersed in goat milk, it has a creamier texture in the mouth (and I personally recommend it as a creamer for coffee!).

Two, it means the fat (cream) does not easily separate from the remaining ingredients, causing the milk to remain naturally homogenized.

It is theorized that the smaller fat globule size, combined with the fact that the globules do not clump together as in cow's milk, also contribute to the higher digestibility of goat milk, and the better tolerance of it for individuals with certain digestive disorders.

[Sideshow Bob]

Bit higher per kg of milk solids for goats. Article bit old but you get the idea. Wouldn't be a cheap end product.

http://www.stuff.co.nz/business/farming/dairy/9584453/Milking-goats-makes-en-e

[sb9]

https://nzx.com/companies/ATM/announcements/295358

Challenger increased their holding to over 10% now...

[sb9]

http://www.skynews.com.au/business/business/company/2017/01/11/bellamys-set-to-restructure-business.html

Glimmer of positive news for embattled Bellamy's holders....if so should be good news for whole IF industry and might see ATM back to the 250 mark where it was before bellamy's saga unfolded.

[hummerh40]

BAL.ASX is back...down 40% on open

[sb9]

BAL.ASX is back...down 40% on open

Irony is CEO Laura has been replaced by her husband Cohen, hmmmm such mess and shambles...

[hummerh40]

I'm just curious to see its effect of the price of ATM! BAL is a dream come true for the traders out there though

[sb9]

I'm just curious to see its effect of the price of ATM! BAL is a dream come true for the traders out there though

True, day traders love these kind of days....

Re ATM I don't think it should impact them much, as the announcement clearly states that the problems are self inflicted by Bellamy's alone not industry specific like China regulation etc, etc..

Do feel sorry for long term holders of BAL though as they were led astray by company management.

[sb9]

WOW...WOW....228 close, smashed it!!!:t_up::D

[whatsup]

BOYO, boyo, is ATM going to open very strong tomorrow, any picks ?

[Leftfield]

Happy Happy I doubled up at recent lows as per post 5657. Here's hoping next results update will add further SP gains. Over in Hot Copper I've seen SP predictions of $A3.00. I'd be happy at that. Time will tell.

[NZSilver]

Nice little rise yesterday arvo, I think $3 is a bit rich at current rev/profits, but $2.50-2.80 depending on results.

[sb9]

Nice little rise yesterday arvo, I think $3 is a bit rich at current rev/profits, but $2.50-2.80 depending on results.

Remember it went up to 248 I think after ASM trading update in Nov and bellamy's saga pushed it down unfortunately. I would say immediate (short term) target is to breach that 250 mark and 1H results in Feb should determine further course of action.

Also keep in mind they've signalled new product launches in early part of 2017 from their ASM update like Adult nutrition etc, which will also determines where the sp goes. All in all with bellamy's news out of the way it can find its own path.

[NZSilver]

Remember it went up to 248 I think after ASM trading update in Nov and bellamy's saga pushed it down unfortunately. I would say immediate (short term) target is to breach that 250 mark and 1H results in Feb should determine further course of action.

Also keep in mind they've signalled new product launches in early part of 2017 from their ASM update like Adult nutrition etc, which will also determines where the sp goes. All in all with bellamy's news out of the way it can find its own path.

yeh seems like people are speculating that people will dump BAL and move money to A2m so we should see a rise this when asx begins trading, ya have to take the hotcopper rants with a large grain of salt.

[Sideshow Bob]

Its a curious one. BAL is obviously in the brown stuff that comes out of a cow's backside, and just come out of a trading halt - seemingly then the catalyst for ATM to increase yesterday by 15c or around 6-7%, with another 7c today thus far. BAL have been in a trading halt for near a month, and come out with revised forecasts and sales - but saying their online market share is stable and up on January 2016. But more stocks being held in market.

They have almost 50% of their forecast turnover as stock (not good for Fonterra?) with a change to their 'take-or-pay' contract and also some additional rights put in.

They see their GM going from 39-40% 1H 17 to 32-34% 2H 17, EBIT being around $22-26m FY, after $12-14m 1H17, and EBIT going from 6-9% 1H 17 to 4-6% 2H 17. Only have $1m in cash but compliant with all banking covenants. But conditions obviously worsening later in the year.

They've gone from sales of $25m in 2014 to $125m in 2015 to $245m in 2016. They got some speed wobbles on and haven't got the right route to market.

So what am I missing? :confused: Why is this the shot in the arm for the A2 price list and add $160m to their market cap? The announcement from ATM reconfirming their recent AGM guidance gave the share price a lift, but was short-lived - which would have thought that more meaningful than an update by BAL and coming out of a trading halt.

[Leftfield]

Nice little rise yesterday arvo, I think $3 is a bit rich at current rev/profits, but $2.50-2.80 depending on results.

Agree.......

[Leftfield]

So what am I missing? :confused: Why is this the shot in the arm for the A2 price list and add $160m to their market cap? The announcement from ATM reconfirming their recent AGM guidance gave the share price a lift, but was short-lived - which would have thought that more meaningful than an update by BAL and coming out of a trading halt.

Essentially it is a shot in the arm for ATM because ATM was incorrectly assumed by the market to be tarnished by the same problems that have seen BAL's SP decline from $12.00 to around $4.50.

Both ATM and BAL have now released info' that indicates the market over-reacted re ATM. Essentially BAL's problems (demand drop in China, poor stock control and poor purchase contracts) are not effecting ATM.

Thus in the light of the info' released this week, ATM's SP could be expected to return to it's pre BAL scare highs around $2.60 however IMO further ATM updates are needed to cement any upside.

DYOR

[Sideshow Bob]

Essentially it is a shot in the arm for ATM because ATM was incorrectly assumed by the market to be tarnished by the same problems that have seen BAL's SP decline from $12.00 to around $4.50.

Both ATM and BAL have now released info' that indicates the market over-reacted re ATM. Essentially BAL's problems (demand drop in China, poor stock control and poor purchase contracts) are not effecting ATM.

Thus in the light of the info' released this week, ATM's SP could be expected to return to it's pre BAL scare highs around $2.60 however IMO further ATM updates are needed to cement any upside.

DYOR

Agree LF that both are tarred with the same brush, but there was little/nothing to give confidence to the ATM share price from BAL's announcement or resumption of trading. The update/reconfirmation pre-Xmas from ATM was more pertinent than BAL this. Sure there was an over-reaction, but exactly as you say - BAL's problems are not effecting ATM - and the only thing there is market demand - not stock control, purchasing etc.

I see was trading at $2.35 this morning but dropped back to $2.25 after Australia opened.

[Leftfield]

Nice little gain today, possibly as a result of another substantial investor taking up a stake.

Substantial product holder(s) giving disclosure
Full name(s): Colonial First State Asset Management (Australia) Limited
Summary of substantial holding
Class of quoted voting products: Ordinary Shares
Summary for Colonial First State Asset Management (Australia) LimitedFor this disclosure,—


(a) total number held in class: 36,752,078

(b) total in class: 725,620,065

(c) total percentage held in class: 5.065%

[couta1]

Nice little gain today, possibly as a result of another substantial investor taking up a stake.

Substantial product holder(s) giving disclosure
Full name(s): Colonial First State Asset Management (Australia) Limited
Summary of substantial holding
Class of quoted voting products: Ordinary Shares
Summary for Colonial First State Asset Management (Australia) LimitedFor this disclosure,—



(a) total number held in class: 36,752,078
(b) total in class: 725,620,065
(c) total percentage held in class: 5.065%

Maybe, or is it following Bal which is also up today for the first time in a while.

[sb9]

Maybe, or is it following Bal which is also up today for the first time in a while.

Its just heading back to ASM trading range of 250s (after being hammered by unrelated and unfortunate Bal's events)...very strong buying support at the moment heading into HY results to be released next month. And am sure they'll be an update around new product launches around that time like Adult nutrition etc.

[winner69]

Last paragraph of long post early last year


Overall though, it looks like at north of $2, the share price has got way ahead of the underlying business. I re-iterate my warning to shareholders. Fundamentally ATM is severely overvalued, and still has the potential to halve in price overnight.

SNOOPY

Posted 17 Feb last year when share price was $2.10

Snoops - are you impressed as to how ATM have grown and their current levels of profitability?

You did say in several posts that there are lessons to be learnt. From your analysis of ATM over the last couple of years and subsequent events any learnings you could share with us?

[Snoopy]

Posted 17 Feb last year when share price was $2.10

Snoops - are you impressed as to how ATM have grown and their current levels of profitability?

You did say in several posts that there are lessons to be learnt. From your analysis of ATM over the last couple of years and subsequent events any learnings you could share with us?


The strengths of ATM as I see it are:

1/ Their ability to enter the Oz supermakrket duoopoly and successfully market a premium product in a wider market atmosphere of milk discounting.
2/ Their ability to take a significant dollar stake in the premium Chinese infant formula market.

Latterly I am not sure from an investment perspective whether 1/ and 2/ really are different markets, and whether the success of 1/ has been greatly boosted by Chinese travellers and former Chinese natrionals living in Australia sending A2 formula back to their homeland, and hence boosting 'Australian' sales. The rest of the business is apparently 'going to plan'. But do the UK or the USA make any money once head office costs are apportioned? There are obvious currency headwinds too that will reduce NZD returns from those markets (although if A2 are losing money in those markets, ironically I guess a high NZ currency is good!)

ATM shareprice gains seem largely on hype and anticipation. I can see every success for ATM going forwards from a business operational perspective. But with the company already valued by the market so highly, I see little prospect of any investment returns for the forseeable future. The fact that so far A2 looks to be a 'one trick Chinese pony', albeit a pony that 'looks good' and is 'very well trained', introduces a market concentration risk factor that I am not comfortable with. I intend to keep following the company, but for me the investment equation does not add up.

SNOOPY

[couta1]

The Elevator has started.

[sb9]

The Elevator has started.

Was only a matter of time, it had to move up. Looks like with HY results due out on 15th, shorts must be covering their positions.

[Sideshow Bob]

Herald reporting that Reckitt Benckiser are in talks to buy Mead Johnson Nutrition at a 30% premium totalling $16.7b USD.

[Bjauck]

Herald reporting that Reckitt Benckiser are in talks to buy Mead Johnson Nutrition at a 30% premium totalling $16.7b USD. Interesting move by RB with a generous premium in these uncertain times - a bit of a departure from household and home health. Covering their options with further diversification away from Europe during brexit. Perhaps they like the look of the Chinese market and the prospect of more babies needing formula.

[sb9]

Interesting move by RB with a generous premium in these uncertain times - a bit of a departure from household and home health. Covering their options with further diversification away from Europe during brexit. Perhaps they like the look of the Chinese market and the prospect of more babies needing formula.

Guess everyone wants a share of upcoming baby boom from china thro' some sort of product offering and quicker way to get that is through baby products, specifically infant formula. And who has first mover advantage here... ATM!!!

[sb9]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11794040

Here is the link about the story of RB going for Mead...

[Sideshow Bob]

Up 5c to 230 on the ASX today. Positive start to the short week coming.....

[sb9]

Up 5c to 230 on the ASX today. Positive start to the short week coming.....

Might see testing the 250 mark sooner before the results are out next week.

I'm picking there might be some sort of announcement this week either a trading update or new product launch news....

[777]

Might see testing the 250 mark sooner before the results are out next week.

I'm picking there might be some sort of announcement this week either a trading update or new product launch news....

Considering that they announced the half year results on the 17/2/16 then this years half year should be about the same time so any "trading update" now would be unlikely.

[sb9]

Considering that they announced the half year results on the 17/2/16 then this years half year should be about the same time so any "trading update" now would be unlikely.

Yes there could be none, just my hunch...

By the way HY results to be announced on 15th next wed, notified on their website.

[sb9]

Article in NBR behind paywall titled...

Takeover bid for Mead Johnson lights a fire under A2 shares (https://www.nbr.co.nz/article/takeover-bid-mead-johnson-lights-fire-under-a2-shares-jr-p-199154)

[longy]

Article in NBR behind paywall titled...

Takeover bid for Mead Johnson lights a fire under A2 shares (https://www.nbr.co.nz/article/takeover-bid-mead-johnson-lights-fire-under-a2-shares-jr-p-199154)

It is only speculation at this stage.

[Yoda]

BoA upped their shares by a good amount. notice out NZX yesterday.
That's got to be positive ...right ?

[sb9]

BoA upped their shares by a good amount. notice out NZX yesterday.
That's got to be positive ...right ?

Well, literally 3 more trading days after today before all will be revealed. Am expecting there will be some good update around new product launch as that'll be key driver for growth this year in my opinion.

[Sideshow Bob]

BoA upped their shares by a good amount. notice out NZX yesterday.
That's got to be positive ...right ?

Well up 10c and almost through 250. Expectations for a positive update, especially after they reiterated their position after the BAL issues.

[winner69]

From The Australian

UBS consequently raised its price target on the dual-listed A2 Milk from $NZ2.45 to $NZ2.75 ($A2.60) and altered its view from ‘neutral’ to ‘buy’, mirroring the outlook of Goldman Sachs and Bell Potter.

A2M also the best performing 'market darling' since Trump victory - up 21%

[sb9]

From The Australian

UBS consequently raised its price target on the dual-listed A2 Milk from $NZ2.45 to $NZ2.75 ($A2.60) and altered its view from ‘neutral’ to ‘buy’, mirroring the outlook of Goldman Sachs and Bell Potter.

A2M also the best performing 'market darling' since Trump victory - up 21%

Very true, over on HotCopper plenty of banter of a possible takeover of A2. All rumour I suppose at this point of time...

[blobbles]

Big jump like this in a short time - watch for profit taking. Just look at the chart history of ATM to see how people treat this puppy!

[sb9]

Big jump like this in a short time - watch for profit taking. Just look at the chart history of ATM to see how people treat this puppy!

ATM's spikes and drops are at the mercy of shorters across the ditch most of times, if you can time them well you'll make a nice trade out of them....
On the other hand if you believe in their story and in for long haul, those short term aberrations shouldn't of much worry.

[whatsup]

ATM on fire atm , $2.56 the pending ann/results must be great imo

[Leftfield]

$2.60 and beyond soon? More than happy I topped up during the Bellamy's gloom back in post 5657. Currently 'overweight' with ATM representing over 30% of my portfolio...... Percy might call this 'well positioned.' Roll on results next week.

[sb9]

ATM on fire atm , $2.56 the pending ann/results must be great imo

Mind you, 256 (on 1st Dec '16) was the high point post ASM update back in Nov. So, we're really back to where we were supposed to be mainly due to Bellamy's saga...

[see weed]

From The Australian

UBS consequently raised its price target on the dual-listed A2 Milk from $NZ2.45 to $NZ2.75 ($A2.60) and altered its view from ‘neutral’ to ‘buy’, mirroring the outlook of Goldman Sachs and Bell Potter.

A2M also the best performing 'market darling' since Trump victory - up 21%
Last years results/update was on 17/2/16. Not long to wait for this years:t_up:.

[couta1]

Last years results/update was on 17/2/16. Not long to wait for this years:t_up:. Less time to wait this year because it's on the 15/2/17(That's right only 2 more sleeps to go, or not due to over excitement)

[King1212]

https://www.nbr.co.nz/subscribe/199393

can anyone summarize above article?? thanks.

[sb9]

Dramatic lift in A2 Platimum brand recognition in China: survey (https://www.nbr.co.nz/article/dramatic-lift-a2-platimum-brand-recognition-china-survey-jr-p-199393)

Headline from NBR this arvo behind paywall though....looking good with a day and bit to go before results out on Wed 15th.

[couta1]

I wonder if the share price will spike up on tomorrow's results or will it drop like it did upon the last set of good results? Should be a lot more meat in tomorrow's result than the previous one, whoops I mean milk. All will be revealed soon either way.

[sb9]

I wonder if the share price will spike up on tomorrow's results or will it drop like it did upon the last set of good results? Should be a lot more meat in tomorrow's result than the previous one, whoops I mean milk. All will be revealed soon either way.

I actually like today's trading pattern, market not getting ahead of itself in terms of price action.

More than actual numbers tomorrow my key points to look for are:

- New product launch information

- US trading update (from the banter on HC looks like they're tracking very well)

- China regulation/registration update if any

- More info on brand awareness survey as reported in NBR y'day

- And last but not least the lawsuit against Lion, any new information

[see weed]

I wonder if the share price will spike up on tomorrow's results or will it drop like it did upon the last set of good results? Should be a lot more meat in tomorrow's result than the previous one, whoops I mean milk. All will be revealed soon either way.
Yes it certainly will, and good luck to all holders. Have just finished topping up another 91k in last 5 weeks. Av. price $2.023c. The sp should spike up $2.70+, then from there who knows where:t_up:.

[Leftfield]

Yes it certainly will, and good luck to all holders. Have just finished topping up another 91k in last 5 weeks. Av. price $2.023c. The sp should spike up $2.70+, then from there who knows where:t_up:.

Like your style see weed, you and sb9 have been long term fans of this stock, so I wish you well.

My own holding is more humble, however with an average holding price of less than $1.00 I consider myself 'well positioned.'

IMHO a SP of $3.00 plus is possible this year, with the Lion court case being the only potential hiccup. However I would be v surprised to see ATM lose this case.

The other interesting prospect is A2M being aggressively marketed in NZ when the current arrangement with Fresha Valley ends.

One more sleep to go 'til interim results and the speculation is over (for the moment)... Good luck to holders.

[see weed]

There was mention of a potential div payment? at end of financial year at the 22/11/16 AGM by Chairman David Hearn that..... provided that these positive trends continue, and also provided that there is no need for substantial additional capital expenditure, the Board currently expects to adopt a dividend policy following completion of this financial year...

[whatsup]

Todays the day , should be interesting, GLTA.

[blobbles]

Headline revenue figure of $256m.

On no growth for the year we are looking at $512m revenue. Right where I was hoping! Will be looking at ~530-540m full year result and 80m in NPAT profit.

Looks to be way above guidance. Expect some good buying and a lift today!

[couta1]

Fantastic all round result from a great company. I particularly like the conservative inventory management(Not falling into the BAL trap)

[Bjauck]

Fantastic all round result from a great company. I particularly like the conservative inventory management(Not falling into the BAL trap) A good amount of generated cash too. Results seem to be at top end of expectations.

[Joshuatree]

5.37c EPS; how does that compare with previously.?

[Joshuatree]

4.43c EPS FY 16.

[blobbles]

Cash on hand of $108m. $108m!!!

And growing...

They have to be paying a dividend this year, can't see how they can maintain such a large amount of $$ in the bank without giving back to shareholders.

10c divi this year?

[Leftfield]

There was mention of a potential div payment? at end of financial year at the 22/11/16 AGM by Chairman David Hearn that..... provided that these positive trends continue, and also provided that there is no need for substantial additional capital expenditure, the Board currently expects to adopt a dividend policy following completion of this financial year...

"Board expects to adopt a div policy following the completion of FY17."

Love the early USA expansion plans..... indeed what is there not to like in these results?? Congrats to all holders.

Overview – financial results for the half-year ended 31 December 2016 (NZ$m)


 -Total revenue of $256.1 million – an increase of 84% over the prior corresponding period (pcp)

 -Operating EBITDA1 of $64.1 million – 243% ahead of the pcp

 -Net profit after tax of $39.4 million – 290% ahead of the pcp

 -Continuing strong growth in sales and market share for a2 Platinum® infant formula in Australia and China

 -Sales growth for fresh milk and whole milk powder in Australia

 -Broader distribution and growing sales of fresh milk in the United States

- Increased sales and positive operating earnings in the United Kingdom

 -Operating cash flow of $38.1 million – $48.1 million more than in the pcp

 -Conservative management of infant formula inventory
The a2 Milk Company (“a2MC” or the “Company”) delivered a further step upward in performance in the first halfof the 2017 financial year, with operating earnings and net profit at higher levels than those for the full 2016financial year.

[blobbles]

4.43c EPS FY 16.

One is HY, one is FY right? May want to factor that into your equation...

[blobbles]

Also they are being sold in Trader Joes AND Target in the US. Two huge stores... great wins. Should drive a lot of sales this/next year if its backed up by a solid marketing campaign. Throwing 35m at it should hopefully have a good positive effect!

[BlackPeter]

Correct, but just to clarify: The 4.43 cents have been the earnings for the full 2016 year. The 5.73 cents have been the earnings for the first 6 months of the 2017 year.

Quite pleasing result.:t_up:

[couta1]

Correct, but just to clarify: The 4.43 cents have been the earnings for the full 2016 year. The 5.73 cents have been the earnings for the first 6 months of the 2017 year.

Quite pleasing result.:t_up: Coming from you, that's high praise.:) As an aside, I reckon they might need to revise that $2.75NZ target price up some.

[Leftfield]

Cash on hand of $108m. $108m!!!

And growing...



A great war chest to win their legal case with!!

[Joshuatree]

Congrats holders.I will have a double shot latte today in empathy and for a caffeine sorry for selfpick me up.:mellow::sleep::D
And you too :)KW

[silu]

Wow! ATM just became my best performer in my portfolio. +400% :) :) :)

[BlackPeter]

Coming from you, that's high praise.:) As an aside, I reckon they might need to revise that $2.75NZ target price up some.

Praise where praise is due ... ;)
You might have a point re revising the target price (even if 4-traders increased the consensus just only to NZ$2.64).

Sometimes analysts are a bit slow when following the market.

[sb9]

A great war chest to win their legal case with!!

I may add they may not need that war chest to fight that battle, as am expecting an outside court settlement before that and a hefty payment for the damage. Or else damages could be substantial for Lion if they take it all the way to court in Nov.

Anyway, back to results which as per fellow posters are stupendous!!!

$108m of cash on hand as at end Dec 2016, that alone is massive in my opinion.

Although they've flagged lower IF sales in 2nd half of this year compared to 1st half but higher than 2nd half of 2016, my guess is they're being conservative with their estimates and err on being cautious. And if we know them well enough, they always "UNDERPROMISE and OVERDELIVER".

We could be looking at a maiden divvy of at least 5c at end of FY reporting in August or even 10c if cash reserves keep building up the way they are....:t_up::D

[Sideshow Bob]

Sitting in chch koru, looking at the screen to see what happens once the price updates on the screen at 10.20am......:eek2:

[777]

Sitting in chch koru, looking at the screen to see what happens once the price updates on the screen at 10.20am......:eek2:

Traded to a high of 285 and a low of 270 after opening at 274.

[Bilbo]

A couple of points from the half year presentation - pg 18 "conclusion and outlook" section.
https://www.nzx.com/files/attachments/252930.pdf

"Anticipating infant formula sales in 2H17 to be lower relative to 1H17 (but materially higher than 2H16)"
"Assuming current trends in earnings and cash flow continue and in the absence of significant capitaldemands, the Board expects to adopt a dividend policy following completion of the financial year"

Would be nice to have more detailed guidance on 2H.

[sb9]

Traded to a high of 285 and a low of 270 after opening at 274.

That's a good sign, always notice NZX gets way to ahead of itself and ASX comes along spoils the party. Let's wait and see till what the shorters have in plan for the day when ASX opens...

[sb9]

https://nzx.com/companies/ATM/announcements/296790

I encourage all to read up on the enclosed presentation from ATM, superbly put together as usual.

Of particular interest for me are slides 13 (brand awareness), 14 (China regulation) and 15, 16 (US and UK trading update)...

[blobbles]

1.3m of shares trading hands in the last 10m off market. Sheesh!

[Joshuatree]

Jeepers that fell flat just as fast . Mkt cap close to $1.9 billion. All built in?

[sb9]

Jeepers that fell flat just as fast . Mkt cap close to $1.9 billion. All built in?

Totally expected, shorts must've opened fresh positions after seeing the results, mostly around what company flagged lower IF sales in 2nd half of this FY.

[see weed]

Maybe another wave of buyers tomorrow after reading all the positive news in the papers.:t_up:

[couta1]

Maybe another wave of buyers tomorrow after reading all the positive news in the papers.:t_up: Maybe, but will be overbought soon, wonder what the new bottom will be, maybe $2.40.

[Beagle]

Totally agree with consensus of other posters, outstanding result. Assuming 11 cps earnings at 2.64 that's a current year PE of 24. Seems very reasonable to me considering the growth rate.

[couta1]

Totally agree with consensus of other posters, outstanding result. Assuming 11 cps earnings at 2.64 that's a current year PE of 24. Seems very reasonable to me considering the growth rate. You must be buying or about to then mate? Go on you know you want to.:cool:

[blobbles]

Usually takes a little bit to digest news. I think Aus shorters are in control of the SP a lot and were expecting a poor report, or more negative language, based on BAL's latest issues.

Personally can't see anything wrong here. Company growing like crazy (50-55% this year), has $108m in the bank, can pay a 10c divi this year if they want, which would equate to around a 4% return based on todays SP.

What is not to like? Only one slightly negative statement about slowing IF in China. Huge growth oppourtunity in the USA if they hit it right and with a 35m kick start, based on our knowledge of management skills, they will hit it right. The UK is profitable meaning they have got 2 western markets right. Anyone think they aren't the people to do it again? I wouldn't bet against them now...