ATM - A2 Milk Corporation Limited

[see weed]

Like others, I guess David Mair knows what he's doing. Don't think I'll keep chasing ATM down any further so just topped up with another 25K and will now await developments.

Same here at .64c. It's funny how some one keeps putting another 20 or 30,000 up for sale at .64c or is it my imagination? Is somebody feeding the ducks? I hope not.

[see weed]

I dare someone to take out that 30,000 at 64c and see how long it takes for another 30,000 to appear.

[Harrie]

We do have a lot of believers and obviously a number of non believers, question is who knows more. I think I would put my bet with Mair and Milford.
Thanks MAC for your insights, you have obviously done a fair bit of research, and I suspect as a result you are donkey deep in this stock! (no answer required)
I probably do not necessarily share you FY projections, and we may even have a fairly lack lustre result, however that would not IMHO have any bearing on the long term prospects for the company. I like the brand and I like the recent research done on Humans albeit a small sample and the divergent correlation outcomes between the two types of beta casein. This does prove quite a lot and in due course this will be a topic sure to be discussed through the different media outlets. Its the same old free range vs Caged scenario. You pay more to get a healthier product.

[see weed]

I dare someone to take out that 30,000 at 64c and see how long it takes for another 30,000 to appear.

Looks like dare accepted. Thank you whoever it was.

[Harrie]

Looks like dare accepted. Thank you whoever it was.

When I picked up a small 25k I got that in two parcels. One was $20 plus some, the other was $4 plus some
It could have been the left over from one seller dropping a parcel of 30k or it could have been a completely different seller, or it may have been a seller dividing it up into uneven lots to fudge it.
I see that there is a hangover now of 16k @0.64....who knows maybe we are the ducks being fed!

[zigzag]

highly unlikely when a director is also purchasing

I don't think David Mair is purchasing on his own account. It is Forte-Funds that is buying, and David Mair is an adviser to, and non-executive director of, this fund manager. He may or may not have his own cash in the fund. I still take it as a very positive endorsement of ATM.

[Master98]

Here We Go:

A2 strengthens health claims with first human study



http://www.smh.com.au/business/a2-strengthens-health-claims-with-first-human-study-20140810-102h2w.html

[zigzag]

I've recently started buying A2 milk and I'm feeling pretty good. Mind you, I was feeling quite well before, but it does taste nice, so I am sticking with it. If only the share-price would start advancing again, I'm sure that would be even better for my general state of well-being.

[Master98]

I haven't found A2 milk at local countdown today, will try tomorrow.

[see weed]

I've recently started buying A2 milk and I'm feeling pretty good. Mind you, I was feeling quite well before, but it does taste nice, so I am sticking with it. If only the share-price would start advancing again, I'm sure that would be even better for my general state of well-being.

Take advantage of low sp and buy some more.

[see weed]

I haven't found A2 milk at local countdown today, will try tomorrow.

Plenty at Sylvia Park and Onehunga. I always phone first to check if there is any in stock.

[Master98]

Plenty at Sylvia Park and Onehunga. I always phone first to check if there is any in stock.
cheers, will try tomorrow.

[zigzag]

I haven't found A2 milk at local countdown today, will try tomorrow.

I get mine from Countdown in Grey Lynn. Supply can be a bit erratic, but they usually have some.

[zigzag]

Take advantage of low sp and buy some more.

Yeah see weed. Sounds like a plan.

[NT001]

Here We Go:

A2 strengthens health claims with first human study

http://www.smh.com.au/business/a2-strengthens-health-claims-with-first-human-study-20140810-102h2w.html

Good on you for posting that, M98. I think we are witnessing a real turning point. The so-called experts who have been saying there's "no scientific proof" about the advantages of A2 will now have to come up with scientific facts to try and disprove the Curtin results - and they won't be able to. And obviously there's more to come including the full report on the Curtin research, plus a growing body of international research that absolutely correlates with this.

It now looks like the nutritionists who understand this issue (as opposed to those who don't) are willing to come out in a much more forthright manner on ATM's side. I think the enemy is on the run. Possibly ATM's lawyers are also finally getting into the act behind the scenes. It was great to see the extraordinary backdown a few days ago by the PR agency for A2's Australian rival Lion-Pura:

A public relations firm engaged by Lion was forced to back down from a claim in an email, seen by Fairfax Media, to nutritionists, saying that its new test meant that people “can enjoy A2 milk at an everyday price”.After attracting the attention of a prominent nutritionist, the PR firm, F4 Consulting, said it was "not authorised to make that claim".
“As will no doubt be clear to you, Pura milk does not only contain A2 protein and does not claim to be the same as milk products that contain only A2 protein,” F4 Consulting wrote.

What we're now seeing is a public re-defining of the A1-A2 issue. It's not just that A2 is good, the claim that has been widely dismissed as dubious marketing hype. It's that A1 is bad, at least for some consumers. It's a delicious irony that ATM's Australian rivals have made A1/A2 a big public issue just at the very moment when the Curtin team was coming out with decisive research results involving human subjects. Love it!

[MAC]

Being published by a European journal too must always be satisfying for the good folk at ATM.

With all the recent debate and media attention Lion have kicked up, I wouldn't be at all surprised to see a wee boost in market share in Australia from it, shouldn’t expect to see it up to 30th June reporting of course but perhaps at HY15, let’s see.

[see weed]

I feel like an A2 coming on, looks like A2 on porridge tomorrow. May even take out that 16,000 at 64c, if nobody else wants it.:)

[NT001]

Being published by a European journal too must always be satisfying for the good folk at ATM.

You're so right, MAC, and therein lies another nice irony. The same journal was the vehicle used some years ago by Professor Stewart Truswell of Sydney University in a rare attempt to discredit the A2 hypothesis with scientific argument. Truswell is about the only scientific authority of any note to have tried to do this, but it needs to be borne in mind that he had been a hired consultant for the NZ Dairy Board in litigation against A2 Corporation. Truswell's article in the journal was absolutely riddled with factual errors and inconsistencies, which were duly exposed in letters of reply. So it's a nice touch that the coup de grace to some of his arguments is now being delivered in the same journal.

[NT001]

SP up only 1c to 65c so far, on very moderate trading. NZ media evidently haven't picked up the story about the Curtin research even though it ran in the Sydney Morning Herald, owned by Fairfax which also owns several NZ papers including the Dom Post. Maybe the Christchurch Press will get on to it - their science man has written well-informed stories about the A1-A2 debate in the past, and Prof Woodford is Christchurch based.

It'll be interesting to see the reaction (if any) from the mainstream dairy sector. Fonterra pretty much has a policy of not commenting on the A2 scientific evidence because it knows which way the research is pointing and just wants to keep quiet about it. I guess the critics might try to discredit the research by pointing out it was funded by ATM. Well so what? It's the results that count. If Fonterra felt it was advantageous to fund research on the issue, it would do the same. The critics can hardly question the findings, except by innuendo. Maybe by saying: "This is no big deal. A small sample of subjects, and a few of them got a bit of a tummy problem, so what? No one died." As others onthis thread have noted, the game is far from over, and entrenched interests won't just lie down. But this is an important development, and a far better result than the possible alternative outcome, that no real clinical difference was found/experienced between those who drank A1 and those who drank A2.

[NT001]

Here's another report from the Australian media - from ABC which has good credibility, and it has some interesting additional detail.

http://www.abc.net.au/news/2014-08-11/a2-milk-research/5658502

Sorry if I appear to be hogging this thread at the moment - where's everyone else disappeared to?

[Ginger_steps_]

Im still here :) All unfolding nicely... Interestingly, those little cards that were hung around the necks of the a2 bottles here in aussie ("naturally contains no A1") only seemed to be on one shipment of a2 - they came and went very quickly... I wonder if its related to the release of this study?

[barleeni]

It has now made it into NZ media (www.stuff.co.nz (http://www.stuff.co.nz))

http://www.stuff.co.nz/business/farming/dairy/10370868/A2-strengthens-health-claims-with-first-human-study

[NT001]

Yeah, but I wonder how many investors and consumers read the farming section of the stuff website.

[barleeni]

Yeah, but I wonder how many investors and consumers read the farming section of the stuff website.

Its listed on the business section homepage, so you don't have to navigate to the farming section to find it.

[Joshuatree]

Wow this stuff is really good for me:t_up:. I will spare you the details but I've had health probs in that area as well as Gerd like symptoms in the stomach. A win /win for me atp. Buy it when i see it(countdown NZ mainly). Vol of shares evenly matched at the mo..

[see weed]

Yeah, but I wonder how many investors and consumers read the farming section of the stuff website.

It was announced on the ASB business news at 12.51pm today

[Snoopy]

I don't think David Mair is purchasing on his own account. It is Forte-Funds that is buying, and David Mair is an adviser to, and non-executive director of, this fund manager. He may or may not have his own cash in the fund. I still take it as a very positive endorsement of ATM.


If David Mair was purchasing on his own account within weeks of the announcement of the ATM result he would be done for insider trading! I am surprised there are some on this forum who think he would be that stupid. IIRC corectly there is only a very limited period as an officer or director of a company where you can buy or sell shares in it. Something like six weeks from the announcement of the annual or half year result.

In fact the announcement specifically states that Mair is not purchasing the shares on his own account if you read it carefully. Granted you have to be diligent reading these announcements because of the somewhat clumsy formatting in theway the NZX presents these announcements.

SNOOPY

[Joshuatree]

Breakout @66c hope she holds.:)

[Snoopy]

An advance online abstract has just been published indicating the results of the Curtin University research trial testing the differences in gastrointestinal reaction by humans to A1 and A2 milk. This trial is particularly important because it used 40-odd human subjects (not rats or mice), was very rigorous in its methodology, specifically compared human digestive reactions to A1 and A2, was carried out at a university whose reputation would not be questioned, and its findings have been accepted for publication in a top peer-reviewed journal.

<snip>
" if verified by a larger-scale trial it would demolish the assertions often put forward by many critics of the A2 hypothesis that there is no scientifically proven difference between how the human body reacts to A1 and A2."

The abstract of the trial results notes "a significant positive association between abdominal pain and stool consistency on the A1 diet (r=0.520, P=0.001), but not the A2 diet (r=-0.13, P=0.43). The difference between these two correlations (0.52 versus -0.13) was highly significant (P<0.001). Furthermore, some individuals may be susceptible to A1 beta-casein, as evidenced by higher faecal calprotectin values and associated intolerance measures.”

The questions now are, how big are the differences, are they important healthwise, and do they clearly show that consumers (or at least SOME consumers) are better off drinking A2?

In its conclusions, the abstract states: “These preliminary results suggest differences in gastrointestinal responses in some adult humans consuming milk containing beta-casein of either the A1 or the A2 beta-casein type, but require confirmation in a larger study of participants with perceived intolerance to ordinary A1 beta-casein-containing milk."


I wouldn't market myself as a statistician. But back in the dim dark past I did study some of this stuff so I will put my 2c worth into answering these questions.

In a test like this ideally you want an 'r' value of 1 as a result (where r can vary between -1 and 1). An r value of 1 means straight line predictability. In this example, feed someone a measured quantity of A1 milk and you can predict exactly the associated abdominal pain and stool consistency as a result. Of course peoples' colons are complex biological systems with all sorts of digestive system contents interactions to contend with. And different people may have naturally different tolerances to different foods. Given this, an 'r' value of 1 was never going to happen as a result in a test like this. However, I would have liked to have seen an "r" of up to 0.7 or at least 0.6.

An "r" value of 0.52 is not a particularly compelling result. Especially considering the test participants were made to consume 750ml of milk per day for two weeks on end (that is way above 'normal' consumption for most people). Do an internet search for images and 'r-value 0.5' and you will see what I mean. Squint hard and you can draw a line through an r=0.5 'dot storm'. But for r=0.5 or thereabouts, it really isn't convincing. Keith Woodford is right when he says that he needs to redo this test with a larger sample. The test is positive enough to continue the research, but is no game changing result IMO.

SNOOPY

[Joshuatree]

Hi latest 100 s/holders

Security

IssuerName





ATM.NZ

The a2 Milk Company Limited










Rank



Cur: 04-Aug-2014

Prev: 21-Jul-2014

Difference





Cur

Prv

Shareholders

Shares

Held(%)

Shares

Held(%)

Shares

Simple(%)

Relative(%)





1

1

NEW ZEALAND CENTRAL SECURITIES DEPOSITORY LIMITED

309370381

48.8685

309779306

48.9331

-408925

-0.0646

-0.132





2

2

FREEDOM FOODS GROUP LIMITED

116936129

18.4714

116936129

18.4714

0

0

0





3

3

MOUNTAIN ROAD INVESTMENTS LIMITED

57558701

9.092

57558701

9.092

0

0

0





4

4

ULRIKE MCLACHLAN

7135163

1.1271

7135163

1.1271

0

0

0





5

5

JBWERE (NZ) NOMINEES LIMITED

5865962

0.9266

5865962

0.9266

0

0

0





6

6

DAVID MAIR

5000000

0.7898

5000000

0.7898

0

0

0





7

7

GREGORY HINTON & ROSSLYN HINTON

5000000

0.7898

5000000

0.7898

0

0

0





8

8

SUPERLIFE TRUSTEE NOMINEES LIMITED

4571641

0.7221

4571641

0.7221

0

0

0





9

9

FORSYTH BARR CUSTODIANS LIMITED

4128940

0.6522

4065190

0.6421

63750

0.0101

1.5682





10

10

TP TRUSTEE BENDEMEER LIMITED

4000000

0.6318

4000000

0.6318

0

0

0





11

11

CUSTODIAL SERVICES LIMITED

3301494

0.5215

3621494

0.5721

-320000

-0.0505

-8.8361





12

12

GREGORY HINTON

3000000

0.4739

3000000

0.4739

0

0

0





13

13

HOLEM PTY LIMITED

2750000

0.4344

2750000

0.4344

0

0

0





14

14

NEW ZEALAND DEPOSITORY NOMINEE LIMITED

2535518

0.4005

2392136

0.3779

143382

0.0226

5.9939





15

15

FNZ CUSTODIANS LIMITED

2306245

0.3643

2227083

0.3518

79162

0.0125

3.5545





16

16

PETER HINTON

2193064

0.3464

2193064

0.3464

0

0

0





17

17

INVESTMENT CUSTODIAL SERVICES LIMITED

2098949

0.3316

2098949

0.3316

0

0

0





18

18

RESOLUTION INVESTMENTS LIMITED

1710000

0.2701

1710000

0.2701

0

0

0





19

19

LEVERAGED EQUITIES FINANCE LIMITED

1692061

0.2673

1659561

0.2621

32500

0.0051

1.9583





20

21

FORSYTH BARR CUSTODIANS LIMITED

1628052

0.2572

1480616

0.2339

147436

0.0233

9.9577





21

20

MARINT LIMITED

1500000

0.2369

1500000

0.2369

0

0

0





22

23

CIRCADA LIMITED

1400000

0.2211

1400000

0.2211

0

0

0





23

24

PHABEN HOLDINGS LIMITED

1200000

0.1896

1200000

0.1896

0

0

0





24

25

FORSYTH BARR CUSTODIANS LIMITED

1166800

0.1843

1166800

0.1843

0

0

0





25

26

ROTORUATRUST PERPETUAL CAPITAL FUND LIMITED

1000000

0.158

1000000

0.158

0

0

0





26

27

FORSYTH BARR CUSTODIANS LIMITED

968519

0.153

954519

0.1508

14000

0.0022

1.4667





27

29

CUSTODIAL SERVICES LIMITED

900599

0.1423

894599

0.1413

6000

0.0009

0.6707





28

28

ROSSLYN HINTON

900000

0.1422

900000

0.1422

0

0

0





29

30

MARTYN REESBY

800000

0.1264

800000

0.1264

0

0

0





30

31

FORSYTH BARR CUSTODIANS LIMITED

790950

0.1249

790950

0.1249

0

0

0





31

32

CUSTODIAL SERVICES LIMITED

723900

0.1143

721900

0.114

2000

0.0003

0.277





32

33

ARTHUR YOUNG & PETER WILSON

700000

0.1106

700000

0.1106

0

0

0





33

35

RICHARD PATERSON & LEE PATERSON & PETER GOWING

644972

0.1019

644972

0.1019

0

0

0





34

36

RICHARD PATERSON & LEE PATERSON & PETER GOWING

644972

0.1019

644972

0.1019

0

0

0





35

38

CUSTODIAL SERVICES LIMITED

639894

0.1011

629434

0.0994

10460

0.0017

1.6618





36

37

JAMES MCLAUGHLIN

635595

0.1004

635595

0.1004

0

0

0





37

34

MICHAEL HARE

600000

0.0948

650000

0.1027

-50000

-0.0079

-7.6923





38

39

JBWERE (NZ) NOMINEES LIMITED

535000

0.0845

535000

0.0845

0

0

0





39

40

WARREN LONG

525000

0.0829

525000

0.0829

0

0

0





40

46

ASB NOMINEES LIMITED

512500

0.081

497500

0.0786

15000

0.0024

3.0151





41

41

HYLTON LEGRICE & ANGELA LINDSAY

500000

0.079

500000

0.079

0

0

0





42

42

LUCY HINTON

500000

0.079

500000

0.079

0

0

0





43

43

EMILY HINTON

500000

0.079

500000

0.079

0

0

0





44

44

MM MORTGAGE SOLUTIONS LIMITED

500000

0.079

500000

0.079

0

0

0





45

45

TROUBADOUR HOLDINGS LIMITED

500000

0.079

500000

0.079

0

0

0





46

48

ADAM RYALL & JUDITH RYALL & CHRISTOPHER PATRICK MOORE

450000

0.0711

450000

0.0711

0

0

0





47

49

INVESTMENT CUSTODIAL SERVICES LIMITED

416465

0.0658

416465

0.0658

0

0

0





48

50

NICHOLAS LAUTZ

395703

0.0625

395703

0.0625

0

0

0





49

51

CUSTODIAL SERVICES LIMITED

362547

0.0573

354547

0.056

8000

0.0013

2.2564





50

52

CHRISTOPHER JOHNSTON & KOKILA PATEL

353855

0.0559

353855

0.0559

0

0

0





51

53

BRYAN HUTCHINS

350000

0.0553

350000

0.0553

0

0

0





52

54

PENELOPE HUTCHINS

350000

0.0553

350000

0.0553

0

0

0





53

55

FNZ CUSTODIANS LIMITED

345511

0.0546

345511

0.0546

0

0

0





54

22

FIRST NZ CAPITAL SECURITIES LIMITED

340204

0.0537

1400324

0.2212

-1060120

-0.1675

-75.7053





55

56

PHILLIP HARRIS & PRUNELLA HARRIS

320000

0.0505

320000

0.0505

0

0

0





56

57

JOHN ELLIOT & TONI ELLIOT

315000

0.0498

315000

0.0498

0

0

0





57

58

HARROGATE TRUSTEE LIMITED

304000

0.048

304000

0.048

0

0

0





58

59

MICHAEL LOOKMAN & 187 BRIDGE TRUSTEES 53 LIMITED

300000

0.0474

300000

0.0474

0

0

0





59

0

JOHN LEAHY & SHARYN LEAHY & SARAH LEAHY

300000

0.0474

0

0

0

0

0





60

60

STEPHEN PRYOR & CITYLAW TRUSTEES LIMITED

300000

0.0474

300000

0.0474

0

0

0





61

61

LINDA SIMMONS & FARRY AND CO. TRUSTEES LIMITED

300000

0.0474

300000

0.0474

0

0

0





62

62

ROBERT STEWART & LEONIE STEWART & IMPACT LEGAL TRUSTEE LIMITED

300000

0.0474

300000

0.0474

0

0

0





63

63

CUSTODIAL SERVICES LIMITED

271750

0.0429

271750

0.0429

0

0

0





64

64

FORSYTH BARR CUSTODIANS LIMITED

264390

0.0418

264390

0.0418

0

0

0





65

65

ANTHONY COOMBE

255125

0.0403

255125

0.0403

0

0

0





66

66

ALLAN SOLLY

250800

0.0396

250800

0.0396

0

0

0





67

67

THE NEW ZEALAND ANGLICAN CHURCH PENSION BOARD INCORPORATED

250000

0.0395

250000

0.0395

0

0

0





68

68

CONSTELLATION CAPITAL LIMITED

250000

0.0395

250000

0.0395

0

0

0





69

69

4 EYES LIMITED

249150

0.0394

249150

0.0394

0

0

0





70

70

PLUTEUS (NO 164) PTY LIMITED

243480

0.0385

243480

0.0385

0

0

0





71

71

NEVILLE SAWYER & JANICE SAWYER

240000

0.0379

240000

0.0379

0

0

0





72

72

INVESTMENT CUSTODIAL SERVICES LIMITED

240000

0.0379

240000

0.0379

0

0

0





73

73

JAGUAR NOMINEES LIMITED

240000

0.0379

240000

0.0379

0

0

0





74

74

ROSALINDE TRINNEAR

238020

0.0376

238020

0.0376

0

0

0





75

75

GREGORY KEEN & PATRICIA KEEN

232156

0.0367

232156

0.0367

0

0

0





76

76

DAVID STEVENSON & NICHOLAS GRANT & DONALD MOCHAN

225455

0.0356

230000

0.0363

-4545

-0.0007

-1.9761





77

77

RICHARD TURNER

225000

0.0355

225000

0.0355

0

0

0





78

78

ROSS MEAR & DEIDRE MEAR

225000

0.0355

225000

0.0355

0

0

0





79

79

EUAN BIDWILL & ANNA BIDWILL & JAMES WALLACE

225000

0.0355

225000

0.0355

0

0

0





80

80

EUAN BIDWILL & ANNA BIDWILL & JAMES WALLACE

225000

0.0355

225000

0.0355

0

0

0





81

81

BARBARA KEDGLEY

221000

0.0349

221000

0.0349

0

0

0





82

82

CRAIG PERCY

220258

0.0348

220258

0.0348

0

0

0





83

0

CUSTODIAL SERVICES LIMITED

220000

0.0348

0

0

0

0

0





84

83

STEVEN LAWRIE

201000

0.0318

201000

0.0318

0

0

0





85

84

MICHAEL GUTHRIE & SUSAN LECKIE & ALBERT ALLOO

200340

0.0316

200340

0.0316

0

0

0





86

85

JOHN EDWARDS

200000

0.0316

200000

0.0316

0

0

0





87

86

WAYNE BOOCOCK

200000

0.0316

200000

0.0316

0

0

0





88

88

PUBLIC TRUST

200000

0.0316

200000

0.0316

0

0

0





89

89

LOUISE WRIGHT

200000

0.0316

200000

0.0316

0

0

0





90

90

HENRY DODS

200000

0.0316

200000

0.0316

0

0

0





91

91

SOMSMITH NOMINEES LIMITED

200000

0.0316

200000

0.0316

0

0

0





92

92

NZ METHODIST TRUST ASSOCIATION

200000

0.0316

200000

0.0316

0

0

0





93

93

NICOLAI SCHUPBACH

200000

0.0316

200000

0.0316

0

0

0





94

94

PARNELL HOLDINGS LIMITED

200000

0.0316

200000

0.0316

0

0

0





95

95

PETER BRADFIELD

200000

0.0316

200000

0.0316

0

0

0





96

96

PETER DE CLIFFORD & GWENDOLINE DE CLIFFORD

200000

0.0316

200000

0.0316

0

0

0





97

97

SALLY CLATWORTHY

200000

0.0316

200000

0.0316

0

0

0





98

98

AMALGAMATED DAIRIES LIMITED

200000

0.0316

200000

0.0316

0

0

0





99

99

PHILLIP LINDBERG

195000

0.0308

195000

0.0308

0

0

0





100

100

TITMOTU HOLDINGS LIMITED

188550

0.0298

188550

0.0298

0

0

0







0







0















0

Top 100 total

576270760

91.0284

577072660

91.1551

-1321900

-0.2088

-0.2291

[airedale]

I wonder which of those entities is Milford Asset Management.

[Master98]

I wonder which of those entities is Milford Asset Management.

I think belong to NEW ZEALAND CENTRAL SECURITIES DEPOSITORY LIMITED

[Harrie]

I wouldn't market myself as a statistician. But back in the dim dark past I did study some of this stuff so I will put my 2c worth into answering these questions.

In a test like this ideally you want an 'r' value of 1 as a result (where r can vary between -1 and 1). An r value of 1 means straight line predictability. In this example, feed someone a measured quantity of A1 milk and you can predict exactly the associated abdominal pain and stool consistency as a result. Of course peoples' colons are complex biological systems with all sorts of digestive system contents interactions to contend with. And different people may have naturally different tolerances to different foods. Given this, an 'r' value of 1 was never going to happen as a result in a test like this. However, I would have liked to have seen an "r" of up to 0.7 or at least 0.6.

An "r" value of 0.52 is not a particularly compelling result. Especially considering the test participants were made to consume 750ml of milk per day for two weeks on end (that is way above 'normal' consumption for most people). Do an internet search for images and 'r-value 0.5' and you will see what I mean. Squint hard and you can draw a line through an r=0.5 'dot storm'. But for r=0.5 or thereabouts, it really isn't convincing. Keith Woodford is right when he says that he needs to redo this test with a larger sample. The test is positive enough to continue the research, but is no game changing result IMO.

SNOOPY

Interesting, but isn't the significant issue the difference in correlation between the two "r" rather than an "r" value itself for A1?
Does a minus "r" value therefore suggest a positive or improved digestive reaction to A2?

[Master98]

An "r" value of 0.52 is not a particularly compelling result. Especially considering the test participants were made to consume 750ml of milk per day for two weeks on end (that is way above 'normal' consumption for most people).
SNOOPY

I am not an related expert, so can not judge your comment, can you tell us what is the "normal" milk consumption for most people? I drink 6l milk per week seems abnormal:cool:

[silverblizzard888]

A2 Milk about to get a mention on 3 news!

[Citizen Erased]

What's Forsyth Barr's track record like when it comes to forecasting earnings?

http://www.stuff.co.nz/business/money/10369034/Investors-expecting-growth-in-earnings


Analysis by Forsyth Barr widens the net to include 48 companies reporting up to October 23. Of those, 11 were expected to report second half earnings up more than 15 per cent on the first half, including Meridian, Mighty River Power, Air New Zealand and PGG Wrightson.

Meanwhile, 13 were expected to report earnings down at least 20 per cent over the same period.

"That's quite a large number, certainly a larger number than we would have anticipated," said Mercer.

The decliners included A2 Milk, the Fonterra Shareholders Fund, Warehouse Group, Kathmandu and Pumpkin Patch.

[MAC]

I think that's both fair and unsurprising, I'm expecting earnings to be lower too, but whether NPAT is an insignificant $4M or an insignificant $0M, there's no real difference in the big picture when revenues are growing nicely toward the $280M target by 2016.

Sacrificing earnings for growth is something ATM have down to a fine art IMO, or at least have done so for the last three years, optimising close to zero, investing every skerick into new joint venture establishment. I find this approach preferable to some growth companies that run at a continual loss for years.

There’s been a few big investments in the last year, buying out Muller Wiseman, Western Australian JV establishment, ramp up of infant formula into the Chinese, Australian and New Zealand markets, all funded largely from gross margins.

Revenues should be +20%, it’s revenue growth that’s important for the next few years.

[Jasemc]

Well put Mac. They have a relatively conservative growth plan relying a lot on profit from australia. We hope that the uk is growing well and china is getting back on track. The day they have a second market to fund growth the day we all retire early on our gains otherwise we keep working.

[see weed]

A2 Milk about to get a mention on 3 news!

That was good exposure for A2 milk. It was at least 3 minutes worth straight after the business news.

[hilskin]

Here's the news item from TV3

http://www.3news.co.nz/A2-milk-easier-to-digest-than-A1---study/tabid/1160/articleID/356361/Default.aspx

[RGR367]

Here's the news item from TV3

http://www.3news.co.nz/A2-milk-easier-to-digest-than-A1---study/tabid/1160/articleID/356361/Default.aspx

And it says, "The study was funded by New Zealand-based A2 Milk Company, ......" which says a lot about this report.

disc own no share

[MAC]

And it says, "The study was funded by New Zealand-based A2 Milk Company, ......" which says a lot about this report.

disc own no share

Are not all clinical studies funded by the company developing the product, just the same as any biotech. Good to see it was a double blinded study also, which says even more about the report.

[NT001]

And it says, "The study was funded by New Zealand-based A2 Milk Company, ......" which says a lot about this report.

A certain amount of skepticism is healthy and was addressed by the research team leader. Cynicism is something else. There will be those in the public, the media and the dairy industry who will be cynical, but I would suggest it is best that members of this thread have a slightly higher and better informed analytical threshold.

Peer-reviewed journals, especially one with such a high reputation as the European Journal of Clinical Nutrition, havereview panels of experts who are always very ready to tear a research report to pieces and deny it publication if it has weaknesses. A report will get a special going-over if there is any suspicion, as there could have been in this case, that its results have been bought and paid for by its funder.

The report on A1/A2 by Professor Boyd Swinburn that was commissioned by the NZ Food Safety Authority some years ago said this subject urgently needs more research, in the interests of milk consumers and of the NZ dairy industry. You would think NZ would be a good place to do it, but nope. Fonterra wasn't going to fund or carry out such research because it knows the results will be unwelcome to the mainstream dairy industry. And likewise, the government wasn't forking out funds. So what else is ATM to do, other than fund the research itself, under an arms-length arrangement that ensures credibility? In my experience, the academic researchers who do the job would be far more interested in maintaining their own reputations for scientific credibility than in saving ATM's skin.

[NT001]

Not everyone on this thread will want to be reading the minutiae of all the various media reports coming out now about the Curtin University research on A1/A2, but some of the reports in Australian media are of interest because they’re going to affect the debate going on in A2’s most profitable market.

The first is from a farming publication in Western Australia which of course will be read by dairy farmers there, but more significantly for us it includes some fascinating comments from the A2 processor in WA about the way ATM is running its campaign in Australia, and also refers to ATM’s future market plans in Australia and Asia.

http://www.farmweekly.com.au/news/agriculture/cattle/dairy/a2-milk-drinkers-may-get-less-gut-aches/2708166.aspx?storypage=0

And then this item is also interesting. It’s the same initial report by reporter Jared Lynch that was published in the Sydney Morning Herald a couple of days ago, but here it is again in the farmers’ online mag Australian Dairy Farmer under a much more direct headline that pulls no punches: “Research backs A2 claims”. That will be uncomfortable reading for Dairy Australia, which takes a very hard line against A2.

http://adf.farmonline.com.au/news/magazine/industry-news/general/research-backs-a2-claims/2708145.aspx?storypage=0

[Snoopy]

I am not an related expert, so can not judge your comment, can you tell us what is the "normal" milk consumption for most people? I drink 6l milk per week seems abnormal:cool:


It was probably unfair of me to put my own milk consumption under the 'normal' banner and imply that anyone ouside of that was abnormal. But try this. I remember extended family christmas gatherings made up of three generations (3 grandparents, 5 parents, 5 kids) . There were thirteen of us assembled. It was my job to bring the milk in that the delivery man dropped off in the wee hours of the morning (yes it was a few years ago). I remember being staggered that we all got through as a collective nine bottles (600ml glass things for the newcomers). Over a day that was 5.4l. Over a week 38l. Divide that by 13 people and I get 2.9l per week per person.
Of course that was only an average and the youngsters I am sure slurped down more than the oldies.

Master, I salute you consuming 6l of milk per week. You must have very good bones and very good teeth! My experience suggests that your consumption is on the high side, and I'm not saying there is anything wrong with that.

SNOOPY

[Snoopy]

Interesting, but isn't the significant issue the difference in correlation between the two "r" rather than an "r" value itself for A1?


Interesting point Harrie.

This comes back to the marketing dilemma for A2 milk. A2 milk is the product. But really the important thing is that the milk does not contain the A1 protein. Selling a product called "Not A1 Milk" suggests it has been left out in the sun for a few hours. So you can see why the marketing guys went for "A2". But the fact of the matter is that "Not A1 milk" is in reality the marketing message A2 milk are pushing.

To me then, the important thing to show is that A1 has some likely detrimental effect that can be avoided by consuming A2. If in reality there is no real scientific evidence that A1 milk is a problem, then the neeed for A2 as an alternative disappears. Thus as I see it, the main thrust of potential research is to

1/ First prove that there really is a problem with A1. Once that is proved, the next step is to
2/ Prove that A2 will not cause the same problem.

This is what Keith Woodford et al have tried to do with their latest research. By my way of thoinking the most important part of this research was to prove step number 1/ above. Sadly for Woodford et al this part of their research was less convincing than the fact that A1 and A2 milk proteins did initiate a different response in trial protagonists. The study's evidence on this point was much more convincing.

Just proving that A1 and A2 have different responses, as you suggest Harrie, is IMO not important until you can prove that there really is an issue with A1 to start with. It is not marketinng death for A2 if Woodford cannot quickly prove 1. Because as one person, if you are having digestive issues and in your personal experience switching to A2 'solves' your issues, then for you as a single consumer this will be enough to make you an A2 convert. But anecdotal evidence like this does not cut it as scientific proof.

SNOOPY

[G on]

Maybe their next ads should be "Zero A1"

[Snoopy]

Does a minus "r" value therefore suggest a positive or improved digestive reaction to A2?


A minus "r" indicates the two things you are trying to correlate together are affecting each other but in the opposite way to what you originally proposed.

For example if your hypothesis was that if you increased 'A', then 'B' would increase as a result (you are assuming that A and B have a +r relationship), but then if you plotted your results and found that by increasing A then B actually decreased then you would find that A and B had a "-r" relationship of some kind.

But if instead you had originally assumed that inceasing A woudl decrease B and you did the test and found this so, then this relationship between A and B woudl be a "+r" kind. Plus or minus are only significant in relation to your original assumption.

SNOOPY

[Master98]

Master, I salute you consuming 6l of milk per week. You must have very good bones and very good teeth! My experience suggests that your consumption is on the high side, and I'm not saying there is anything wrong with that.

SNOOPY
lol, I am a muscle builder, do drink 6l milk(now A2 only) per week.

[Harrie]

A minus "r" indicates the two things you are trying to correlate together are affecting each other but in the opposite way to what you originally proposed.

For example if your hypothesis was that if you increased 'A', then 'B' would increase as a result (you are assuming that A and B have a +r relationship), but then if you plotted your results and found that by increasing A then B actually decreased then you would find that A and B had a "-r" relationship of some kind.

But if instead you had originally assumed that inceasing A woudl decrease B and you did the test and found this so, then this relationship between A and B woudl be a "+r" kind. Plus or minus are only significant in relation to your original assumption.

SNOOPY

Yes all that makes sense snoopy, but the "r" in this analysis relates to the assumption that A1 has a detrimental impact on the digestive issues in terms of certain measurements/observations they have devised etc.
If you apply the assumption that A1 beta casein has a positive correlation (or mildly positive 0.52) with problematic digestive issues, then all you can say is that at -0.13, A2 beta casein has no, if not a slightly negative, correlation with digestive issues.
I can understand no correlation, but a negative one is a bit harder to get your head around!
It sort of suggests on the basis of the assumption above, that there are digestive "benefits" in A2 milk?

[NT001]

I'm not quite up with you guys on the statistical stuff, but I don't think there's any question that A1 can yield the opioid peptide BCM-7 and A2 cannot, and that BCM7 can be potentially bad for you. One of the issues that has been subject to debate is whether and in what manner BCM-7 can get into the bloodstream and from there to other parts of the body. If it can't, then there might not be a problem with A1 milk.

On this point, Keith Woodford has just posted an article on his blogsite about important new research showing that BCM-7 can indeed cross the gut barrier into the bloodstream, and that the body's immune system tries to react to this. It also shows that in the case of autistic kids, there is a noticeable difference in how the immune system reacts, which would indicate a direct correlation between BCM-7 as measured in urine and the severity of the autism.

To quote a crucial passage from that research paper (which refers to BCM-7 as "CM-7"),

"The present study, for the first time, demonstrated that autistic children have elevated levels of CM-7 immunoreactivity in the urine (Fig. 1), and revealed the positive correlation between the content of urine CM-7 and the severity of ASD (Fig. 2)."

But Woodford says that while this finding is very important in itself, the more important point to emerge from the trial was that it is now definitely shown that BCM7 can enter the bloodstream.

His article can be seen at:

https://nz-mg5.mail.yahoo.com/neo/launch?.partner=tnz&.rand=eim9f8l4ug7vk#8934495623

I think it's important to remember that the Curtin University trial is just one of many research projects on A1/A2 being done around the world and they tend to tie in with each other. No one of them should really be analysed to death on its own.

[NT001]

Sorry, my last paragraph seems to have got dropped. I intended to add that the Curtin research explains the anecdotal reports from consumers about how A2 milk is easier to digest, and A1 can create problems even before the BCM-7 peptide gets beyond the digestive tract and into the bloodstream. But research on the much bigger issues such as the correlation between A1 and autism, heart disease, diabetes and SIDS is meanwhile continuing apace and will eventually all link up.

[Jasemc]

In a way I hope that while ATM is small the research remains fuzzy otherwise the big boys will do a takeover or play real. Dirty. There is enough word of mouth feedback to promote the product. It's marketed asa premium product to those who can afford it a good position in a crowded milk market. People with money like things that are different and offer health benefits. After all how much is spent on natural medicines that often show no positive outcomes in clinical trials. It's all in the perceived benefits. ATM are doing a great job creating this perception.

[NT001]

Keith Woodford has now posted a report on his personal blogsite explaining in (more or less) layman's terms the results from the Curtin University research project comparing human gastrointestinal reactions to A1 and A2 milk.

http://keithwoodford.wordpress.com/2014/08/12/human-clinical-trial-demonstrates-digestive-differences-in-a1-and-a2-beta-casein/

He also provides a link to the full text of the report as it appeared in the European Journal of Clinical Nutrition. This includes stacks of statistical material that Snoopy and others may enjoy analysing. It also includes a declaration of conflict of interest, so the Journal's reviewers were well able to take that into account.

[see weed]

La la la la Where have all the buyers gone...Long time pa..assing.

[Citizen Erased]

Not enough interest and volume to break 68-70 resistance. Traders may bail...

I got sucked in at 0.67 after two days of getting no bites at 0.66. It was quite a sight seeing the buyer/seller ratio completely reverse at the end of trading yesterday.

Here's hoping I don't take a bath!

[see weed]

Not enough interest and volume to break 68-70 resistance. Traders may bail...
Thats good. Where to now the traders have gone? Up up an away in my.....

[see weed]

I got sucked in at 0.67 after two days of getting no bites at 0.66. It was quite a sight seeing the buyer/seller ratio completely reverse at the end of trading yesterday.

Here's hoping I don't take a bath!

I got sucked in at .69c, .66c, .65,.64,and .63c. Would'nt mind getting some at .60c, .61, .62,.67 and .68c, then would have all the 60's covered. But then i'm just a big sucker of a2 Milk, and will keep on sucking right up till the results announcement on the week commenceing 25/8/14. I have to go now for my daily sucken bath with David, Milford and NZ Super.:D

[gv1]

What do you think moosie, the SP after results announcement. I mean in terms of TA.

[gv1]

Thanks mate.

[nextbigthing]

I got sucked in at 0.67 after two days of getting no bites at 0.66. It was quite a sight seeing the buyer/seller ratio completely reverse at the end of trading yesterday.

Here's hoping I don't take a bath!

I think Milford were in at 75c. You'll be fine unless you have ants in your pants and you strangely wear those pants on your sell finger.

[MAC]

Quite nice prime time coverage yesterday on 7 news. The last comment by the reporter after talking with Peter Nathan was interesting, "9% market share", let’s see at reporting in two weeks.

Edit: 9% would put them ahead of schedule at FY14


https://www.youtube.com/watch?v=rAtRhVDOqy0

[Master98]

very nice company and very strong management indeed.

[MAC]

Agree, it will equally interesting Master to see how they are doing in the UK now too, they could not possibly have broken even, too early yet, it would though be quite satisfying to see some good traction.

Lot’s of good marketing initiatives occurring in the background;

http://a2milk.co.uk/category/hcp/
http://www.sensecommunications.co.uk/campaigns/a2-milk-companys-industry-roundtable/
https://www.facebook.com/a2MilkUK

[see weed]

Quite nice prime time coverage yesterday on 7 news. The last comment by the reporter after talking with Peter Nathan was interesting, "9% market share", let’s see at reporting in two weeks.

Edit: 9% would put them ahead of schedule at FY14


https://www.youtube.com/watch?v=rAtRhVDOqy0

1% to 9% is a pretty big jump which is 800% gain. All the dials are looking positive.

[Mr T]

Called into Countdown last night and was happy to see instead of the usual one row of five bottles there were now three rows of five bottles, hopefully this is a sign of increasing demand and they have been needing to re-stock the shelf too often!

[NT001]

Quite nice prime time coverage yesterday on 7 news.

Nice one thanks MAC. Interesting that they had a guy from CSIRO making a negative comment about the Curtin trial, but as is almost always the case when so-called experts knock A2, he didn't (presumably couldn't) actually dispute the findings.

But it's also interesting that the comment came from CSIRO. That's the Australian government-funded science outfit that Fonterra has just announced a big five-year cooperative deal with.

[see weed]

Good old 500,000 man to the rescue. Is that you nt001.

[Master98]

Good old 500,000 man to the rescue. Is that you nt001.

more likely ATM share be manipulated.

[biker]

But it's also interesting that the comment came from CSIRO. That's the Australian government-funded science outfit that Fonterra has just announced a big five-year cooperative deal with.

Thanks NT001. Couldn't quite figure where he was coming from and why, with his churlish comment......

"There were many outcomes that weren't different between the two milks."

Well, of course there were, but that's not the point, and they are after all, both milk!
The comment related to a tie up with Fonterra makes perfect sense.

If A2 milk continues to be strongly supported by the market place, Fonterra will have to come to the A2 party in some way, shape or form before too long. It makes interesting speculation what form that may take. Denying, refuting and denigrating the product wouldn't seem to be an effective long term strategy to bridle the horse. It is too head strong and has already bolted.

[see weed]

more likely ATM share be manipulated.

I noticed two thirds of them went through at close.

[blackcap]

Called into Countdown last night and was happy to see instead of the usual one row of five bottles there were now three rows of five bottles, hopefully this is a sign of increasing demand and they have been needing to re-stock the shelf too often!

I had that same experience in my local countdown a few weeks ago.

[NT001]

Good old 500,000 man to the rescue. Is that you nt001.

Nope, wish it was. I'm happy with what I've got for now, and would only buy again if the SP broke down well below 60c. Waiting for news from ATM.

But the more this nonsense continues, the more I believe with Master98 amd others that the SP is being manipulated, possibly with a takeover bid in view, and perhaps to grab control of the company's IP. However, my gut feeling is that very large numbers of shares are held by true believers, who are confident that there's a lot of upside in the company and they wouldn't sell out at anywhere near present levels, certainly not under $1 and probably a good deal more.

[Master98]

Nope, wish it was. I'm happy with what I've got for now, and would only buy again if the SP broke down well below 60c. Waiting for news from ATM.

But the more this nonsense continues, the more I believe with Master98 amd others that the SP is being manipulated, possibly with a takeover bid in view, and perhaps to grab control of the company's IP. However, my gut feeling is that very large numbers of shares are held by true believers, who are confident that there's a lot of upside in the company and they wouldn't sell out at anywhere near present levels, certainly not under $1 and probably a good deal more.

as per Joshuatree post#1603, top 100 shareholders holding barely moved which counted 576m out of total 660m company shares.

[NT001]

as per Joshuatree post#1603, top 100 shareholders holding barely moved which counted 576m out of total 660m company shares.

Yes that's good. However, if a shareholder was simply churning a few hundred thousand shares or possibly less each day to manipulate the price downwards, it wouldn't necessarily show up in the holdings of the top 100, would it?

[see weed]

Nope, wish it was. I'm happy with what I've got for now, and would only buy again if the SP broke down well below 60c. Waiting for news from ATM.

But the more this nonsense continues, the more I believe with Master98 amd others that the SP is being manipulated, possibly with a takeover bid in view, and perhaps to grab control of the company's IP. However, my gut feeling is that very large numbers of shares are held by true believers, who are confident that there's a lot of upside in the company and they wouldn't sell out at anywhere near present levels, certainly not under $1 and probably a good deal more.

Same here, if the buyers let the sp get down to 60c. I would buy more at 61 and 62c if I could. But if any more of these block 500,000 share buyers comes through, then it may not get down to 63c before the result announcement.

[Master98]

Yes that's good. However, if a shareholder was simply churning a few hundred thousand shares or possibly less each day to manipulate the price downwards, it wouldn't necessarily show up in the holdings of the top 100, would it?

that's why i think ATM share could be manipulated.

[see weed]

that's why i think ATM share could be manipulated.

Depends on who has the most money or shares. If Mr. $300,000 man keeps on ordering 500,000 shares at a time, then Mr. Manipulater might run out of shares to sell.

[NT001]

Depends on who has the most money or shares. If Mr. $300,000 man keeps on ordering 500,000 shares at a time, then Mr. Manipulater might run out of shares to sell.

That's true, but does Mr $300,000 man have deep pockets, and is he perhaps in there only because he is guessing a takeover offer is coming? There don't seem to be many strong buyers at the moment (apart from Milford perhaps), and someone who wants to take the company over can well afford to lose quite a few million in the process of buying and selling the same shares to get the price down, until such time as a real resistance point is met. The TA experts (which I'm not) don't seem convinced it is there yet.

I just think all these new IPOs (not to mention the asset sales) have been siphoning funds away from companies like ATM, PEB, SML, SCT, MAD, RAK, BLT, SLG where traders don't see much short term gain and even some serious investors have become impatient. There's a limited market for innovative tech stocks which require patience, and in a small and relatively illiquid market like ours they are vulnerable to strong mood swings and potential manipulation.

ATM is more strongly placed than some of the others. It has a quality product with the science now clearly emerging in its favour, a consumer market looking for healthy food, and relatively high capitalisation. And above all it has excellent management with a commercial strategy that has drawn valuable commercial lessons from past bad experiences. But it also has enemies and needs to be on its guard for what Nicky Hager would call "Dirty Tricks".

[MAC]

Perhaps I have taught you all far too well - quick, get out there and buy shares in a downtrend!!! Damn it! :p

Now there are many ways of looking at art KW, some may say ATM is in a fundamental valuation up trend ;)

[MAC]

Actually, it is looking a lot healthier at the moment than a few weeks ago. RSI is now positive, MACD trending that way. 200 day MA is at 76c so thats still a long way off, but lets see if we can clear the 50 day MA at 69c first.

The analysts certainly like it, this from today’s New Zealand Herald:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11309031 (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11309031)

“Broker Craigs Investment Partners has given its picks on some of the possible highlights and lowlights of this month's earnings season. In a research note, analyst Mark Lister says Meridian Energy (reporting on August 18), Air New Zealand (August 27) and A2 Milk (August 28) are potential outperformers”

“Analysts at UBS don't rate the copycat marketing campaign being conducted by brewing and food giant Lion that aims to scupper NZX-listed A2 milk's Australian growth”

“UBS has a "buy" rating on A2 and an 87c target price on the stock, which closed down 1c yesterday at 65c.”

Noting too that Craig’s recently provided an initiating valuation for ATM of 90c:

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

Personally I think they are both a little low at 87c and 90c respectively, I have $1.09, but I recognise that a lot of how one assesss ATM forward cashflows depends on how ones views long run net margins off those already stable 35% gross margins.

[Jasemc]

Patent expiring 2016. We wonder the impact this will have. I presume others will expire not to long after.

[see weed]

That's true, but does Mr $300,000 man have deep pockets, and is he perhaps in there only because he is guessing a takeover offer is coming? There don't seem to be many strong buyers at the moment (apart from Milford perhaps), and someone who wants to take the company over can well afford to lose quite a few million in the process of buying and selling the same shares to get the price down, until such time as a real resistance point is met. The TA experts (which I'm not) don't seem convinced it is there yet.

I just think all these new IPOs (not to mention the asset sales) have been siphoning funds away from companies like ATM, PEB, SML, SCT, MAD, RAK, BLT, SLG where traders don't see much short term gain and even some serious investors have become impatient. There's a limited market for innovative tech stocks which require patience, and in a small and relatively illiquid market like ours they are vulnerable to strong mood swings and potential manipulation.

ATM is more strongly placed than some of the others. It has a quality product with the science now clearly emerging in its favour, a consumer market looking for healthy food, and relatively high capitalisation. And above all it has excellent management with a commercial strategy that has drawn valuable commercial lessons from past bad experiences. But it also has enemies and needs to be on its guard for what Nicky Hager would call "Dirty Tricks".

Fair point, We will see how it goes. Just keep on sucking that a2 milk. Whenever I go to the supermarket I tell people about a2. Maybe we should get some tee shirts made promoteing a2 and it's health benefits.:t_up:

[MAC]

Yeah I was interested that the UBS analysts picked up on that too, it comes with a caveat which they didn’t mention though.

The first of the patents expires in 2016, however that same patent has different expiry dates in different territories and they started here in NZ much earlier than elsewhere. There is a hierarchy of over arching patents also which ATM have done further work on in 2013 and 2014.

Page 15,16,17 & note 1:
http://aboutthea2milkcompany.com/wp-content/uploads/2012/10/A2-Strategic-Review-2012.pdf

[Jasemc]

I guess the biggy is the ones identifying a2 producing cows. When do these start expiring?

[MAC]

Patent family 4, “animal genotyping method” expiry 23rd May 2023, that’s how I read it, but again with the same caveat, that's only the first territory expiry.

It seems to be like an onion, they keep adding layers over the top of layers, I think one needs to be a biotechnician or a patent lawyer or both to really figure it all out.

[Jasemc]

Dam right there MAC. Assume they know how to protect. The report says it's mostly robust.

[MAC]

Dam right there MAC. Assume they know how to protect. The report says it's mostly robust.

Yeah well, the lawyers have had a look at it, I’m not sure as investors we will ever have all the patent details or the exp to do the same.

“A2C’s intellectual property is balanced across a variety of rights, with strength throughout the supply chain. Chain of title and rights are well documented, allowing a solid basis for exploitation and enforcement” - Simpson Grierson

http://aboutthea2milkcompany.com/wp-...eview-2012.pdf (http://aboutthea2milkcompany.com/wp-content/uploads/2012/10/A2-Strategic-Review-2012.pdf)

[NT001]

A2 was one of the companies mentioned in an ODT business interview today with Craigs broker Chris Timms, looking at likely corporate results :

"A2 Milk: Current price 66c. If a2 Milk raised capital to fund its US expansion, Craigs believed it would be viewed as a sensible strategy which would not see a negative reaction. The Australian operations could be surprisingly strong, while recent confirmation of regulatory approvals in China supported the outlook. The company was good value under 75c a share."

I'd sooner he said was good value under 95c. Craigs have done some research and the suggestion of a capital-raising for US operations would be more than just a wild guess. Question is, how big would it need to be? With 660m shares on issue, probably not very big, but could certainly be enough to affect the SP, depending on what news we get in the meantime.

[MAC]

Craig’s only initiated coverage a couple of months ago and seemed a bit conservative over it to me having said it was a challenge to prepare a valuation at the time, they have their price target at 90c actually, what the reporter is trying to say is good value to 75c, value to 90c.

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

With the entire North American market beckoning, the size of a capital raising may only be limited by ambition and risk management.

They have operated in the US in some form for some time, remember the Ideasphere/OriginalFoods/SteelCase/HyVee effort (marketing of 2007 below), though this time, as I understand, they are planning to work through the wholly owned US subsidiary company, a good move IMHO, sub license's never seem to perform nearly as well as in house operations or JV’s, just look at what Fresha have not done in NZ.

http://www.nbr.co.nz/article/a2-corporation-takes-full-control-us-marketing-arm-131022

The US launch was going to be predicated by showcasing at that natural foods exhibition in California last March so perhaps they will enter the west coast initially. The west coast seems to have a high level of folk who are quite health conscious.

Though the size of the capital raising may depend too on whether they intend to build facilities like their Smeaton Grange plant in New South Wales or just enter into JV agreements.

https://www.nzx.com/files/attachments/174523.pdf

My view is that they probably won’t take on the entire continent in one hit, even with JV’s that seems too big to me from the get go. Perhaps they will split the effort into territories, divisioned by prospective regional A2 dairy production.

But then it could be a matter of M&A or a takeover also, something seems to be delaying the announcement, been waiting for a few months now ?

6140

[NT001]

What you say makes a lot of sense, MAC, and is based on an excellent knowledge of ATM's historical background. In such a large market, JVs would look sensible, focusing initially on selected regions such as the West Coast and perhaps the Northeast. Those regions not only have health-conscious, highly educated and relatively high-income populations, but they are the headquarters of most of the US national media.

Not sublicences, as you say. Even JVs can be tricky. The JV partners need to have strong marketing capability and access to consumer dairy outlets, obviously, but they also IMO need to be separate from the mainstream dairy industry, unlike Muller Wisemans in Britain. They must not be inhibited by concerns that ATM will sooner or later have to market its product very much in competition with standard milk, emphasising more clearly the risks attached to A1.

The Curtin research in Australia is interesting and useful, but is just a first step, identifying mild digestive discomfort associated with A1. That's nothing compared to other research that is likely to verify clear links between A1 and autism (quite soon) and eventually prove probable links between A1 and diabetes and heart disease. It will be full circle for ATM, because that's where the whole A2 thing started with Corran McLachlan's research. It was a strategic error for A2Corp co-founder Howard Patterson to take on the mainstream dairy industry so early in the piece, but sooner or later I think the chips will be down, not only in NZ but globally. IMHO.

I share your suspicions about M&A or takeover, and wondered if there was a link between all this and the recent weakening of the ATM SP. But as regards the delay in putting together a US deal, I feel there could be other explanations. ATM will be wanting to get things absolutely right this time in the US after a couple of failed efforts in the past. And for a company that's still relatively small personnel-wise, it actually has quite a lot else on its plate right now, eg still expanding in Australia and England and working on plans for Europe, China, Korea etc.

[airedale]

" I share your suspicions about M&A or takeover, and wondered if there was a link between all this and the recent weakening of the ATM SP."

Just a thought: it would not have been difficult for Milford to force down the price recently. That would have two effects, as they sold they would have been taking profits and freeing up a bit of cash. It would also have allowed a third party to accumulate ahead of a takeover which would ultimately benefit Milford.

[rbel038]

My wife is currently doing post graduate diabetes papers for her nursing and came home the other night asking me about A2 milk. Turns out the lecturer was giving the nurses a rundown on the A2 research and possible links between A1 beta casein and diabetes / heart disease. Thought it was quite good of the medical profession to be presenting this kind of stuff to the new diabetic nurses before they get out into the community.

[MAC]

My wife is currently doing post graduate diabetes papers for her nursing and came home the other night asking me about A2 milk. Turns out the lecturer was giving the nurses a rundown on the A2 research and possible links between A1 beta casein and diabetes / heart disease. Thought it was quite good of the medical profession to be presenting this kind of stuff to the new diabetic nurses before they get out into the community.

Here ya go Rbel, some weekend reading;

http://www.betacasein.org/index.php?p=type1-diabetes

Seems like just another reason why ATM should be targeting Australia, Northern Europe and North America when one looks at that DM-1 plot ?

regards, Mac

[see weed]

All quiet at the moment, sp down a bit. Waiting for next weeks results I suppose.

[Harrie]

Looks like a bit of off market trading going on.
Picked up a small 5000 today (to make up an even number) at 0.65 leaving one seller with 19000 left to sell.
Parcel went through at 0.64 (not sure of volume), but 19000 still sitting there at 0.65

[Master98]

another 1m shares traded off market, i guess must a place for off market trader.

[see weed]

Bought a 2L A2 milk this afternoon for $1.96c. The drink by date is 24/8/14, but it still tasted good. It is a good feeling buying a product that you have shares in and promoting it to family and friends. All of them so far think it tastes good too -- even one diehard stuck in the mud A1 milk drinker, had to admit it tasted really good! :t_up:

[Jasemc]

Yep it tastes good and even better when the shares are worth $10 each.

[NT001]

Glad you like A2 milk, SW, but how come you got it for $1.96 for 2L? It usually costs just under $5 for 2L in all the Countdown stores in Wellington. Maybe we should move to Sylvia Park. Are Wellington prices out of line?

Of course the taste is actually irrelevant to the health and digestive claims made for A2, but if it tastes creamier as quite a few people comment, that could be because an A2-only herd is likely to include a higher than normal proportion of Jersey and Guernsey cows, which tend to be naturally A2 and are famous for producing creamy milk. Milk drinkers generally prefer Jersey and Guernsey milk, but farmers who get paid by the volume of milk they supply generally prefer Friesian-Holstein which are noted for their higher per-cow milk production.

[see weed]

Glad you like A2 milk, SW, but how come you got it for $1.96 for 2L? It usually costs just under $5 for 2L in all the Countdown stores in Wellington. Maybe we should move to Sylvia Park. Are Wellington prices out of line?

Of course the taste is actually irrelevant to the health and digestive claims made for A2, but if it tastes creamier as quite a few people comment, that could be because an A2-only herd is likely to include a higher than normal proportion of Jersey and Guernsey cows, which tend to be naturally A2 and are famous for producing creamy milk. Milk drinkers generally prefer Jersey and Guernsey milk, but farmers who get paid by the volume of milk they supply generally prefer Friesian-Holstein which are noted for their higher per-cow milk production.

Normally it costs $4.90c, but because the use by date is in 3 days on 24/8/14 , Countdown sold it at a discount. Usually a2 has about 8 or 9 days fridge life. Just enjoying a milo a2 shake, very nice.

[see weed]

Yep it tastes good and even better when the shares are worth $10 each.

Lets just get to a $1 for now. See how the results look next week.

[Harrie]

Did anyone notice what volume went through at 4pm yesterday?
Couple of days ago around a mio of shares went through at 0.64 at 4pm
There seems to be a trend developing here, and a seller keen to get rid of a bundle (if its the same one)
If its the same one what do they know that we do not? Maybe the seller is laying them off to Milford or even freedom foods via a broker.
Perhaps NT001 could throw up another top 50 to see where the changes have been.
My best guess is that 0.64 seller man could be concentrating on profitability.
Hopefully next week there will be reported sales and revenue growth in Australia and UK in particular but wouldn't mind seeing some traction in the US either.

[NT001]

It wasn't me that put up the last top 50 list, Harrie, but I found it interesting and would like to see it refreshed quite often, especially while there's a suspicion of shenanigans.

[Master98]

Josehuatree posted the top 100 shareholders.

[Harrie]

It wasn't me that put up the last top 50 list, Harrie, but I found it interesting and would like to see it refreshed quite often, especially while there's a suspicion of shenanigans.

Sorry about that NT, mistaken poster.
JT, if you are around, an update on ATM shareholding differentials would be gratfully received.

[see weed]

I phoned Fresha Valley , being a bit concerned about all the flooding up north. It was on tv1 news this morning about some farmers could hit the wall. But said everything is allright, it did not affect them in their area, and they are flat tack making A2. There must be more people drinking A2 by the sounds it.

[zigzag]

I phoned Fresha Valley , being a bit concerned about all the flooding up north. It was on tv1 news this morning about some farmers could hit the wall. But said everything is allright, it did not affect them in their area, and they are flat tack making A2. There must be more people drinking A2 by the sounds it.

Countdown in Grey Lynn keeps on running out. Mind you, Grey Lynn is full of "alternative" type people these days. Pity they have only one product to sample. Doing research on Foley Family Wines is a lot more rewarding, though perhaps not as beneficial health-wise.

[see weed]

Countdown in Grey Lynn keeps on running out. Mind you, Grey Lynn is full of "alternative" type people these days. Pity they have only one product to sample. Doing research on Foley Family Wines is a lot more rewarding, though perhaps not as beneficial health-wise.

$6.48c today at New World Lunn ave. Stonefields. It is $1.58c dearer than Countdown at $4.90c. Go the All Blacks.

[Jasemc]

Yes supermarket is always running out so they must be struggling to supply demand.

[see weed]

Yes supermarket is always running out so they must be struggling to supply demand.

Yes, thats the feeling I got when talking to Fresha Valley yesterday. That reminds me, gota get some more tomorrow, but not from New World. The word A2 is slowly spreading around, I'm sure lots of people have never heard of it. Looking forward to positive results in the next week.:)

[ziggy415]

""The word A2 is slowly spreading around, I'm sure lots of people have never heard of it. Looking forward to positive results in the next week.:)[/QUOTE]
me too but little concerned with sp drift last couple months...maybe general rerating of dairy perhaps or there gonna want some more money to move into USA

[ziggy415]

""The word A2 is slowly spreading around, I'm sure lots of people have never heard of it. Looking forward to positive results in the next week.:)
me too but little concerned with sp drift last couple months...maybe general rerating of dairy perhaps or there gonna want some more money to move into USA[/QUOTE]
if it is USA hope they don,t set any targets or thread might become another PEB;)

[winner69]

http://www.stuff.co.nz/business/farming/dairy/10412045/A1-threat-to-NZ-dairy

[MAC]

Not sure if Kenneth will make milk an election issue, one wonders though in a time of falling farm gate income, whether we will see increasing competition amongst dairy farmers for A1 to A2 conversion. The A2 premium for farmers, as I understand, is 8 to 10% to cover conversion costs plus incentive. Would be interesting to hear from the famer folk on the thread.

Should be a positive result next week I’m predicting.

We heard anecdotally from Peter Nathan a couple of weeks ago that the company now has a 9% market share in Australia. This places them slightly further ahead than even the revised forecast, which notably was brought forward from 10% at FY16 to 10% at HY15. Too early for profitability in the UK but perhaps some initial sales volume coming through now, plus initial revenues from the new markets and products launched in the last year.

Despite the exchange rate impact, I’m looking for +20% yoy on revenue growth. Earnings should be appropriately close to zero, as per the last couple of years, reflecting the very large investments made in growth.

6168

[ziggy415]

Not sure if Kenneth will make milk an election issue, one wonders though in a time of falling farm gate income, whether we will see increasing competition amongst dairy farmers for A1 to A2 conversion. The A2 premium for farmers, as I understand, is 8 to 10% to cover conversion costs plus incentive. Would be interesting to hear from the famer folk on the thread.

Should be a positive result next week I’m predicting.

We heard anecdotally from Peter Nathan a couple of weeks ago that the company now has a 9% market share in Australia. This places them slightly further ahead than even the revised forecast, which notably was brought forward from 10% at FY16 to 10% at HY15. Too early for profitability in the UK but perhaps some initial sales volume coming through now, plus initial revenues from the new markets and products launched in the last year.

Despite the exchange rate impact, I’m looking for +20% yoy on revenue growth. Earnings should be appropriately close to zero, as per the last couple of years, reflecting the very large investments made in growth.

6168
just wondering if milk companies (fonterra etc) would pick up A2 milk if market for A2 fell over....big risk for early farm converters if not.....looks like A2 in aussie is beded in so more farmers will be keen to convert i,m picking

[ziggy415]

just wondering if milk companies (fonterra etc) would pick up A2 milk if market for A2 fell over....big risk for early farm converters if not.....looks like A2 in aussie is beded in so more farmers will be keen to convert i,m picking
oops looks like the Snapster was typing at same time as me....that was what i was trying to ask but he put it more eloquently

[Snoopy]

http://www.stuff.co.nz/business/farming/dairy/10412045/A1-threat-to-NZ-dairy

Interesting postscript/disclaimer to that article.

"Keith Woodford receives royalties on his book on A1 and A2 beta casein and has previously acted as an independent adviser to The a2 Milk Company and other agri-food companies. He holds no shares in any milk company."

So Keith Woodford, one of the most ardent commentators on A2, does not hold any shares in the A2 Milk company!

SNOOPY

[NT001]

http://www.stuff.co.nz/business/farming/dairy/10412045/A1-threat-to-NZ-dairy

Great article. I'm pleased to see Keith Woodford is sticking it to the mainstream industry, yet in a clever way, saying farmers can treat the A1/A2 issue as a risk or an opportunity. Good to see the NZ Farmer headlining the "risk" factor of A1. Sooner or later someone is going to ask Fonterra for its advice - put them really on the spot.

Of course, ATM clips the ticket every time a farmer has a cow tested to see if it's A2, even if the result is negative.

It does take time (several years) to convert an entire herd to A2 by breeding and culling, but although I'm not a farmer I would have thought there are ways to speed up the process, such as neighbouring farmers pooling their A2 cows in one paddock and milking them separately as they build up. Or, as some farmers have done in the US (and probably Australia), swap your A1s for A2s with farmers who don't believe in the A2 hypothesis.

[MAC]

Here’s a second confirmation in two weeks from Peter Nathan suggesting ATM now have "about 9%" market share ahead of FY14 reporting later in the week. Market share at FY13 was 7.4%.

http://www.afr.com/p/business/sunday/financial_review_sunday_transcript_akvi0pSZQly5nEb O29CpUI

[Master98]

''Meyer: A2 milk comes from cows which produce only the a2 protein - and none of the a1 protein some people find hard to digest. It’s so popular, cafes are choosing to use it exclusively. An a2 baby formula is also stealing sales and is booming in China.''

[blobbles]

I can confirm that it is actually selling fairly well in China. Talked to a woman who sells it the other day through her baby shop, she said they sold out of it pretty damn fast (3 days for a box of them, not sure how many in a box). She said her customers told her that their kids like it much more than other stuff they had tried and they liked the clean green NZ image. Good sign I guess. I visited 2-3 other shops too and they didn't have any on the shelf either (previously had a few containers). All good signs.

[Harrie]

Well someone is not convinced. Whether that is higher sales in Aussy or booming sales in China getting a bit ahead of itself, who knows?
Me thinks EBITDA is likely to be down for FY14, and that may be concerning some speculators. Its just dropped a couple in the last hour or so. Maybe mr seller @0.64 is capitalising on the slightly elevated rhetoric floating about at the moment

[blobbles]

You can also see it on taobao (China's biggest e-commerce retail site). Go to www.taobao.com and enter: "a2 牛奶粉" in the search field. Pretty damn popular...

[blobbles]

Well someone is not convinced. Whether that is higher sales in Aussy or booming sales in China getting a bit ahead of itself, who knows?
Me thinks EBITDA is likely to be down for FY14, and that may be concerning some speculators. Its just dropped a couple in the last hour or so. Maybe mr seller @0.64 is capitalising on the slightly elevated rhetoric floating about at the moment

In the sort of growth phase they are in, I doubt whether serious investors will be too worried about EBITDA being down. Its all about the growth rate in sales at the moment... if sales growth is still accelerating it presents a compelling trend for where they are heading...

[Harrie]

You can also see it on taobao (China's biggest e-commerce retail site). Go to www.taobao.com (http://www.taobao.com) and enter: "a2 牛奶粉" in the search field. Pretty damn popular...

That looks pretty amazing blobbles, pages of it. Not understanding manderin or cantonese, where are you drawing the conclusion that it is popular and selling fast?

[Harrie]

In the sort of growth phase they are in, I doubt whether serious investors will be too worried about EBITDA being down. Its all about the growth rate in sales at the moment... if sales growth is still accelerating it presents a compelling trend for where they are heading...

Yes I agree totally.
I was making that comment on the basis that less serious investors may be distracted by it, rather than the growth story around it and future earnings potential.

[Tsuba]

This thread has a serious lack of stock knockers on it. Nice change from some other topics being discussed. :t_up:

[Joshuatree]

What do holders reckon results will be like? Craigs have $119 mill Rev, $2 mill EBITDA , EBITDA growth -75.9%, EBITDA margin 2% ,and Zero net profit.

"we are positive on growth prospects"." the co has shown it has the ability to grow at attractive rates , 60% per annum in Aus since 2008"

[blobbles]

That looks pretty amazing blobbles, pages of it. Not understanding manderin or cantonese, where are you drawing the conclusion that it is popular and selling fast?

See post 1706.

[blobbles]

Another thing to note about the taobao shops is that there are a lot of people selling on there buying it from Aus/NZ/UK etc. There are a couple of reasons for this, firstly because Chinese people are very aware of being cheated so will buy the product from an overseas supplier. There have been cases of people "recycling" the milk powder containers - selling them to a local supplier who uses the can again, filling it with local milk powder of questionable quality (usually fine, but not what as advertised on the outside), or imitating the label on cans that are again filled with lower quality milk powder, resealed and sold at a higher margin. Its not a huge problem at the moment, but it does happen.

Secondly one whole hell of a lot of Chinese families have half immigrated to Aus/NZ/UK over the past few years enabling them to easily create a business where they buy products overseas, ship back to family in China who onsell to Chinese customers. This type of arrangement takes advantage of the lack of trust and recompense/avenues for prosecution in China, is usually bit part and on demand - I ordered 2 cases of NZ Marmite in China from a seller doing exactly this from NZ! Although only 1 showed up due to customs thinking it was drugs or something the second time and returning to sender (though the seller never received it back showing, I suspect, items getting knicked in Chinese customs). So what you may see is that sales in A2 milk powder also show decent unexplainable growth in Western countries too - its being bought and shipped to China! Most young Chinese of child bearing age now can read and understand English better than they speak it, so they can follow the cans instructions and looking up technical words on it is easy with a dictionary. Its for this reason that almost all the cans you see on taobao are in ENGLISH! In the stores in China the A2 Platinum cans are written in Chinese.

[airedale]

This thread has a serious lack of stock knockers on it. Nice change from some other topics being discussed. :t_up:

Was it Harry Truman who said that "if everyone is thinking the same way, then someone is not thinking". ;)

[winner69]

Was it Harry Truman who said that "if everyone is thinking the same way, then someone is not thinking". ;)

Come on .....no insults thrown in Tsuba's direction.

May have been Truman but normally attributed to Benjamin Franklin

[MAC]

What do holders reckon results will be like? Craigs have $119 mill Rev, $2 mill EBITDA , EBITDA growth -75.9%, EBITDA margin 2% ,and Zero net profit.

"we are positive on growth prospects"." the co has shown it has the ability to grow at attractive rates , 60% per annum in Aus since 2008"

Here’s where I’m at,

If market share is indeed likely to be 9% up from 7.4%, we should see around 20 to 25% AUD revenue growth in fresh milk sales, add to that initial sales from the new products, infant formula, UHT, yoghourt and cream, less circa $8M on exchange rate movement. Maybe some UK revenues starting to offset JV establishment costs, but by no means profitable yet as expected.

A continuation of gross margins at 35% or thereabouts, a continuation of net margins managed by ATM at close to zero, with every free skerrick of cash re-invested within the current accounting year. ie: a continuation of earnings sacrifice for growth in meeting the 2016 numerical goals.

It’s been a record year for investment, new markets, new products, the establishment of new JV’s and the buyout of Muller Wiseman, there won’t be much loose change after all that.

Estimate: Revenues +22%, NPAT down from a managed close to zero of $4.4M to a managed close to zero of $1M.

[Tsuba]

Come on .....no insults thrown in Tsuba's direction.

May have been Truman but normally attributed to Benjamin Franklin

Some people may say you are like a dose of clap .......... before you arrive is pleasure but afterwards you are a pain in the dong. Speaking of which. PEB is doing its best to remove that pain in the DONG. A Winner !!! ;)

[winner69]

Some people may say you are like a dose of clap .......... before you arrive is pleasure but afterwards you are a pain in the dong. Speaking of which. PEB is doing its best to remove that pain in the DONG. A Winner !!! ;)

Thanks for the compliments mate

Yes PEB heading to 90/100 in next month. I very happy with that likely 30% gain

[Tsuba]

Thanks for the compliments mate

Yes PEB heading to 90/100 in next month. I very happy with that likely 30% gain

Just having a bit of fun with some old Monty Python. No serious offence intended.

Kiss and make up xxxx ;)

[blobbles]

Please keep the incessant PEB bickering and minutiae confined to the PEB thread. It has nothing to do with ATM.

[airedale]

Some people may say you are like a dose of clap .......... before you arrive is pleasure but afterwards you are a pain in the dong. Speaking of which. PEB is doing its best to remove that pain in the DONG. A Winner !!! ;)

Didn't intend to cast aspersions, Tsuba, merely keeping a weather eye open for anything which may catch us by surprise.
Discl: still holding ATM.

[Joshuatree]

Here’s where I’m at,

If market share is indeed likely to be 9% up from 7.4%, we should see around 20 to 25% AUD revenue growth in fresh milk sales, add to that initial sales from the new products, infant formula, UHT, yoghourt and cream, less circa $8M on exchange rate movement. Maybe some UK revenues starting to offset JV establishment costs, but by no means profitable yet as expected.

A continuation of gross margins at 35% or thereabouts, a continuation of net margins managed by ATM at close to zero, with every free skerrick of cash re-invested within the current accounting year. ie: a continuation of earnings sacrifice for growth in meeting the 2016 numerical goals.

It’s been a record year for investment, new markets, new products, the establishment of new JV’s and the buyout of Muller Wiseman, there won’t be much loose change after all that.

Estimate: Revenues +22%, NPAT down from a managed close to zero of $4.4M to a managed close to zero of $1M.

Thanks for that Mac; thats cream rising to the top of the buttermilk.

[K1W1G0LD]

This isnt an objective thread, its a mutual admiration society.......................................you' re all blind in one eye!!

[see weed]

I converted two people today to drink A2. The first was at Z petrol station, asking me if I wanted a coffee with my petrol, I said only if it has A2 in it. The second was at Countdown, while buying some more A2. A woman next to me was looking at some A1, and I said, hey there, looky here at this A2 , full cream healthy choice, real nice taste. And she said,yeah, my girls like full cream milk. And I said, how long would 2lt. last, and she said 3 days, and I said, well you better take two bottles because once they taste A2, it will be finished in two days.:t_up: And on that note, tempted to buy another 15,000:)

[blobbles]

This isnt an objective thread, its a mutual admiration society.......................................you' re all blind in one eye!!

I absolutely welcome any knocking and will partake in such knocking avidly. However, right now, I can't find anything to knock, damn it!

(DISC: I have a fair whack of them since their price weakened considerably making me rather overweight in ATM. But I figure I see the powder selling out in China, so figure this ain't a bad thing)

I am guessing this weeks report will have some solid figures, hopefully returning the SP back to the 80-90c range. Fingers crossed, don't let me down ATM! When is the report due exactly, anyone know?

[see weed]

I absolutely welcome any knocking and will partake in such knocking avidly. However, right now, I can't find anything to knock, damn it!

(DISC: I have a fair whack of them since their price weakened considerably making me rather overweight in ATM. But I figure I see the powder selling out in China, so figure this ain't a bad thing)

I am guessing this weeks report will have some solid figures, hopefully returning the SP back to the 80-90c range. Fingers crossed, don't let me down ATM! When is the report due exactly, anyone know?

1/4 full empty a2 bottle with rice and knock it onto the palm of your hand or onto your front thigh to the music. This makes a good sounding shaker. The report should be out before the end of the week, hopefully.....good one.....because I am also very much overweight in this company, and of drinking heaps of a2.

[Harrie]

I can confirm that it is actually selling fairly well in China. Talked to a woman who sells it the other day through her baby shop, she said they sold out of it pretty damn fast (3 days for a box of them, not sure how many in a box). She said her customers told her that their kids like it much more than other stuff they had tried and they liked the clean green NZ image. Good sign I guess. I visited 2-3 other shops too and they didn't have any on the shelf either (previously had a few containers). All good signs.

A few thoughts:

I'm a daytime believer in the product too, but talking to a baby shop owner who has sold an unquantified amount of a2 and a few others that have sold a few, is encouraging but its a bit of a long straw to extrapolate this into the impression that massive sales are taking place over there.
The taobao site shows nothing but advertising the product so I am unsure how you are coming to that conclusion either? I may be missing something in the translation though.

If the practise of reusing tins and filling them up with other formula, is correct, it could really screw up a2's marketing efforts over there.

[blobbles]

A few thoughts:

I'm a daytime believer in the product too, but talking to a baby shop owner who has sold an unquantified amount of a2 and a few others that have sold a few, is encouraging but its a bit of a long straw to extrapolate this into the impression that massive sales are taking place over there.
The taobao site shows nothing but advertising the product so I am unsure how you are coming to that conclusion either? I may be missing something in the translation though.

If the practise of reusing tins and filling them up with other formula, is correct, it could really screw up a2's marketing efforts over there.

Sure, I am just giving my anecdotal evidence from what I have seen, take from it what you will. The taobao site indicates a great many number of people selling the product. My experience with taobao is that a large number of sellers selling the same thing indicates that they can sell a lot of it and do. Things that don't sell so well only have a few stockists or are completely non existent. Again, just anecdotal but that is the experience of someone "on the ground".

Something very interesting about the taobao site is that almost all the sellers are selling directly from NZ/Aus/UK. This is because most Chinese people in China don't fully trust the local stuff is actually genuine, they much prefer to source it from a western source which they are sure of. With the great exodus of rich Chinese families to these countries over the past 5 years (leaving half their family in China), it has set up a situation ripe for business. The Chinese immigrants in the West receives orders from Chinese customers, they buy the items from western supermarkets and then ship them either to their family in China (if it is many boxes for instance that needs to be split) or direct to customers. As most Chinese people of child bearing age now are pretty good English readers, its no problem for them to interpret the labels as customers. So the actual sales in China will probably be made up of a lot of sales from these countries too - it will be interesting to see if they split this into sales by region.

[waikare]

I converted two people today to drink A2. The first was at Z petrol station, asking me if I wanted a coffee with my petrol, I said only if it has A2 in it. The second was at Countdown, while buying some more A2. A woman next to me was looking at some A1, and I said, hey there, looky here at this A2 , full cream healthy choice, real nice taste. And she said,yeah, my girls like full cream milk. And I said, how long would 2lt. last, and she said 3 days, and I said, well you better take two bottles because once they taste A2, it will be finished in two days.:t_up: And on that note, tempted to buy another 15,000:)

Quite impressed See Weed, sounds like you were / are a McDonald’s employee……… do you want fries with that.

Or were you trying to hit on the service attendant and the shopper with two daughters.

Well whatever, you have done well.

[Master98]

A2 milk holds consumers' heartshttp://www.stockandland.com.au/news/agriculture/cattle/dairy/a2-milk-holds-consumers-hearts/2709040.aspx

[see weed]

Quite impressed See Weed, sounds like you were / are a McDonald’s employee……… do you want fries with that.

Or were you trying to hit on the service attendant and the shopper with two daughters.

Well whatever, you have done well.

Thanks, I always promote a2 when walking past the milk bar at Countdown. As for the attendant and the shopper with two daughters, should never mix bussiness and pleasure. But I do get pleasure telling people about a2.

[Harrie]

If what blobbles says is true in post 1731, then, now that a2 has an entry into the chinese market and is exporting there currently, might we a see a levelling off demand in Aust compensated by an increasing demand in China? Irrespetive, its all positive.

The point about so many sellers on taobao being an indication of demand and sales is a good one.

It amazes me that with all this evidence,(albeit a lot of it anecdotal) the SP has laguished back into the 60's from a high point only a few months ago in the 90's.
Is this just a trend of investors moving out of growth orientated stocks and into good dividend paying ones, or is there something else?
There is just about a perfect inverse correlation between ATM and SPK!

[Harrie]

Call me a sceptic but when I see a reasonable amount of selling pressure a few days before results are published it usually indicates some bad news being leaked out somewhere.

[MAC]

Try a YTD correlation with XRO, much of the NZX Scitech sector has been dragged down by XRO performance or lack thereof. I’m not sure ATM really belong within the Scitech now that the product is more accepted as mainstream dairy, however, such short term moves often offer investors buying opportunities Harrie, what does your fundamental research and your DCF tell you.

[airedale]

Just a quick look at the chart on Stocknessmonster shows the 10 day and 30 day MA's crossing upwards, breaking a medium term downtrend.
http://www.stocknessmonster.com/

[Harrie]

Like you MAC, I work purely on fundamental analysis, however this can only be based on information at hand. At the moment we have no quantifiable results only supposition and anecdotal evidence. I'm there because I believe that A2 will continue to grow market share, however these are the possible risks I see in the short term which is probably driving the perception that the A2 price got way ahead of its self in the $0.90's

1. Lion temporarily took a hit out of A2 with misleading advertising
2. The UK market has not really fired
3. The Chinese market has only just got underway but its probably been costly and unproven.
4. Nothing is happening in the US market of any great significance
5. Revenue growth in Aussy and market share could be optimistically portrayed although the CEO has been making optimistic overtures on growth there.
6. The trustees of Milford have probably given the management a wrap over the knuckles for such a high exposure to a relatively small company by capitalisation and told them to pull their head in?

By the way MAC, I value your input, you have a pretty good hold on things and an intimate knowledge of the company and its business.
I'm wondering how associated you are with it other than being a simple investor?

[Master98]

By the way MAC, I value your input, you have a pretty good hold on things and an intimate knowledge of the company and its business.
I'm wondering how associated you are with it other than being a simple investor?

you question MAC position? MAC could be a representative on behalf of ATM at this forum.;)

[Harrie]

you question MAC position? MAC could be a representative on behalf of ATM at this forum.;)

Rhetorical question master98.
That's what is interesting about these forums. Different angles, different views.

[MAC]

Happy to disclose for you Harrie since you did ask, I’m a humble shareholder of the A2 Milk Company, I’ve been researching the company for around two years and have been a holder for a similar duration. I like to compare notes with others some of which never makes this thread, there are some folk that don’t like to share information with undeserving knockers. I travelled to Auckland for the last AGM and was lucky in meeting a couple of people with a similar interest in both FA and the company. No other association whatsoever.

I find Brian Gaynor and the Milford analysts to be generally reasonably informed and I am long term fairly bullish also. At the end of the day it’s best to DYOR, although I do believe buying by some selected institutions does offer corroboration, David Mair buying also a good sign, don’t you think ?

[Harrie]

Happy to disclose for you Harrie since you did ask, I’m a humble shareholder of the A2 Milk Company, I’ve been researching the company for around two years and have been a holder for a similar duration. I like to compare notes with others some of which never makes this thread, there are some folk that don’t like to share information with undeserving knockers. I travelled to Auckland for the last AGM and was lucky in meeting a couple of people with a similar interest in both FA and the company. No other association whatsoever.

I find Brian Gaynor and the Milford analysts to be generally reasonably informed and I am long term fairly bullish also. At the end of the day it’s best to DYOR, although I do believe buying by some selected institutions does offer corroboration, David Mair buying also a good sign, don’t you think ?

Thanks MAC, but as I said I didn't expect an answer actually, but thanks for giving one anyway.
Do you have any view on why the SP has fallen by around 35% from its high?
Given that the shareholding among the top 50 shareholders does not appear to have changed, I can only suspect that this has happened with the shorter term traders taking profits, or maybe a few stop losses have been triggered. Its not a particularity liquid share so small volume can obviously move price reasonably widely.
There also seems to have been a trend recently to move to dividend paying stocks possibly as a defensive move as the market hit new highs.
There does not appear as far as we know any change in the ATM's fundamentals.

[MAC]

I'm a long term investor so probably not the right person to ask, volatility doesn't always need a reason often only sentiment or correlations. Stock picking wins out at the end of the day, always has for me at least, Ben has it right;

Graham wrote that the owner of equity stocks should regard them first and foremost as conferring part ownership of a business. With that perspective in mind, the stock owner should not be too concerned with erratic fluctuations in stock prices, since in the short term, the stock market behaves like a voting machine, but in the long term it acts like a weighing machine.

[see weed]

8,000,000 just went through.

[Jasemc]

Yes some one has faith and someone is taking profit or loss. Let's hope it's no someone with inside info selling.

[winner69]

8,000,000 just went through.

At 63 as well

[see weed]

At 63 as well

must be discount for bulk buying, I just payed .67c at 4.58pm:mellow:

[winner69]

must be discount for bulk buying, I just payed .67c at 4.58pm:mellow:

Somebody really wanting to sell, buyer drive a bargain to help the poor guy out

[NT001]

Harrie and others

I too am a longterm ATM investor who relies on fundamental analysis and doesn’t either understand or feel a need for TA. Like MAC I am not worried by the short term downturn in the SP.

I bought up quite big when the A2M share price was ranging between about 4c and 16c because from my reading I was absolutely certain the science behind A2 was correct and incontrovertible, and sooner or later it would be proved so.

There aren’t many investor forums fortunate enough to have a Bible. Any serious investor in ATM needs to read and have a copy of Keith Woodford’s book “Devil in the Milk”. It explains in layman’s terms the history and science behind the A1-A2 dispute, and really is the Bible. Get the second edition, which has updates on the scientific research. What’s remarkable about it is that the “scientists” (and there aren’t many) who try to dispute the A2 hypothesis have not, to my knowledge, succeeded in finding any fault at all in Woodford’s book. It stands undisputed, and it’s a good read.

It’s clear from my reading of this thread that a lot of members have not read the book. They should, before they start criticising the company’s strategy or – worse still – suggesting the science behind A2 isn’t sound.

So first there’s the book. Second, there’s Woodford’s blogsite <http://keithwoodford.wordpress.com/feed/> where he posts frequent updates on new scientific trials examining the A2 hypothesis. Again he explains them in language we can all understand. And the interesting thing here is that although there’s stacks of research being done round the world, none of it is CONTRADICTING the basic theory behind A2. It’s all pointing in the same direction, that A1 is harmful - even demonstrating links between A1 and autism and SIDS for example. A few days ago he posted on his website and on the NZ Farmer website and in the Sunday Star Times an article under the heading "A1 beta-casein a threat to dairy industry". Now you'd think that if Fonterra or Dairy NZ had factual material to respond to a headline like that, they'd have done so by now. But to my knowledge they haven't. Because they can't.

And finally, the Australian media are carrying lots of stories about the A1-A2 debate. So a google alert should bring up plenty of anecdotal accounts of consumers finding benefits from switching to A2. And interestingly, the mainstream dairy industry (eg Dairy Australia and the Australian Food Safety Authority) have virtually given up trying to dispute these things, except by trotting out the conclusions of reports written at least six years ago when there was far less clinical scientific proof of the A2 case, saying there still isn’t “absolute proof”. They’ll be saying this till the cows come home.

[Master98]

could be last bulk selling before report come out this thursday, and buyer think at this price is de-risk.

[Harrie]

Wow that's a big call by both parties
According to post 1603 from Joshuatree, that can only be any one of the top 3 holders, although the NZ central securities depository probably contains a number of fund managers.
At a cost of over $5 mio the buyer would probably be a fund manager either already in there or a new enrant into the a2 story currently very short on the stock.
Be interesting to see a new chart (just for interest)

[Joshuatree]

A nice surprise. Ive just found a contract note from Craigs which came thru @ 8 pm, my low buy of 63c got hit mmmh so will ask broker tomorrow about where the other 99 plus % went..

[nextbigthing]

A nice surprise. Ive just found a contract note from Craigs which came thru @ 8 pm, my low buy of 63c got hit mmmh so will ask broker tomorrow about where the other 99 plus % went..

Now that is interesting. Every other trade went through around 67 cents. Did Craig's pool all their clients and do one big trade made up of many tiny parcels?

[Harrie]

OK here is a theory
News has got out that the FY14 results are likely to show growth numbers but not as good as what was hoped for.
Some broker becomes impatient and needs to take some brokerage, so looks at exiting and moving on to something like a SPK which is showing a future growth path and increasing dividends. Easy story to sell to punters or the less informed.
Buyer becomes aware of long term advantages, has done research into future demand for milk, and adds the bonus of evidence coming through scientifically for A2, Most likely a Kiwisaver fund, and negotiates a bargain price of 0.63. Both are as happy as sandboys

[ziggy415]

Now that is interesting. Every other trade went through around 67 cents. Did Craig's pool all their clients and do one big trade made up of many tiny parcels?
I had a buy at 64 and its still there....must be only Craigs clients.....still bit worried about amount going thru and the downward trend in sp....maybe gonna ask for more money to expand me thinks..Milford havent updated lately so they may have stopped buying

[MAC]

I had a buy at 64 and its still there....must be only Craigs clients.....still bit worried about amount going thru and the downward trend in sp....maybe gonna ask for more money to expand me thinks..Milford havent updated lately so they may have stopped buying

Do hope so.

[Harrie]

If thats the case, then this time it is hoped that all shareholders are offered any rights issue at a discounted price to market..

[MAC]

If thats the case, then this time it is hoped that all shareholders are offered any rights issue at a discounted price to market..

It's possibly just as likely IMO that we may see takeover talk if they do want significant capital to go big in the US, given the competitive and marketing position the company has, there may probably be a good demand too, particularly with the SP being so far undervalued.

They all really do want some A2.

[Harrie]

Would have to be a pretty good offer MAC , but who would be the likely offeror contenders for ATM at the moment?

[MAC]

Would have to be a pretty good offer MAC , but who would be the likely offeror contenders for ATM at the moment?

Well who knows, there's a trend in Chinese companies wishing to buy out primary NZ suppliers, there's M&A consolidation happening in the Australian dairy industry plus the competitive symptoms toward ATM showing over there, but more likely from the US I reckon at a time when ATM have a raised prospective entry awareness and may require bulk funding from somewhere to execute.

Those big US dairy companies must be looking at the 9% market share gobbled up by ATM in a falling Australian dairy market and within just a few years, and perhaps may want a chunk of potential similar action when it comes to their back door.

Is the price right, may find out a little more tomorrow along with the rest of us

[Harrie]

Crikey MAC you sure know how to stimulate enthusiasm for this stock!
Roll on tomorrow

[ziggy415]

Well who knows, there's a trend in Chinese companies wishing to buy out primary NZ suppliers, there's M&A consolidation happening in the Australian dairy industry plus the competitive symptoms toward ATM showing over there, but more likely from the US I reckon at a time when ATM have a raised prospective entry awareness and may require bulk funding from somewhere to execute.

Those big US dairy companies must be looking at the 9% market share gobbled up by ATM in a falling Australian dairy market and within just a few years, and perhaps may want a chunk of potential similar action when it comes to their back door.

Is the price right, may find out a little more tomorrow along with the rest of us
Sorry Mac but all indications to me are not good news...Big shareholders dont sell when expecting good news...like you say tommorrow will tell.....i,ve pulled my buy orders just in case

[Harrie]

I would probably agree with Ziggy, its a little uncommon that such a large parcel has passed that way without some positive "hint" to the intending seller. On the other side any buyer picking up 8 mio of shares would have needed to do some due diligence also, and again directors would to have to careful not to "hint" any positive news.
Directors have a duty to all shareholders and need to be squeeky clean when it comes to passing confidential information to selected parties. Announcments must be made in a way where all parties receive identical information at the same time. Their hands are tied and they just have to stand by watching the market do what it does best with all known information.

[Jasemc]

uk some growth not huge. China stuffed by certification but now all go. Aus some increase how big is key to tomorrow. Currency over year bad for profit but has dropped now. USA maybe a mention soon but then maybe they have enough markets to establish first. How will the market react? Milford must have seen something to buy so much surely they have a research team with national standards achieved at school. If it dives tomorrow buy millions of shares for next years result which I think is the most important for this company. If they don't have good results next year then down she goes big time.

[Master98]

maybe you don't have chance to buy today' price tomorrow, let's see.

[MAC]

At the end of the day, we know already that Australian market share is up, and therefore revenues will be up, but yet the share price is down from this time last year by 12%, and is 32% off its highs.

It is absolutely a harder call to make this year than last, simply because the product range is bigger and there is more than one market to consider now. Perhaps this is why I think we are seeing both some large buyers and sellers, albeit more large buying than selling.

It would seem to me that the market may have over priced in an uncertain result perhaps just because it is more difficult to estimate the new market contributions. Or perhaps, possibly even more likely, it’s just because of market correlations.

We could speculate some more or just await the results tomorrow, it does though help ones understanding of the business model to work it through.

------------------------------------------------------------------------------------------
The Australian market has been and is still the mainstay, roughly each additional 1% in market share is worth around about AU$13M in additional revenues and Peter Nathan has told us that market share is presently "about" 9%, it could be a bit higher or lower than that, but definitely up from the 7.4% it was last year. We need to then add to that the revenues from the new product lines infant, UHT, cream, and knock off exchange rate movement.

Roughly every 0.1% of market share in the UK is worth around UK$3M, so any traction there will be interesting too, a 0.2% market share would not be an insignificant thing.

Plus, infant formula sales to China, ATM have told us that inventories were not disrupted, and the Synlait production pause was from the 1st May, so only a two month consideration within the reporting period anyway.

[Jasemc]

One of the more interesting full yrs is this one. No ovious sign of inside info before result as price has stayed same for a while. But still 1hr to go today. What time do they let the result out traditionally.

[winner69]

One of the more interesting full yrs is this one. No ovious sign of inside info before result as price has stayed same for a while. But still 1hr to go today. What time do they let the result out traditionally.

They usually first thing in he morning, like 8.30

All hell will break loose if it is put up by the NZX just after 10, moosie tirades anf calls for FMA action etc

It will be first thing. Already published and ready to go. Chairman will have a last gawk at over drinks tonight

[dingoNZ]

They usually first thing in he morning, like 8.30

All hell will break loose if it is put up by the NZX just after 10, moosie tirades anf calls for FMA action etc

It will be first thing. Already published and ready to go. Chairman will have a last gawk at over drinks tonight

Usually is a very loose term. They can be released at any point on their official day, normally pre-market however its at the companies discretion.

Historically most announcements released later in the day and ever after the close have been when the company has bad news to report :)

[MAC]

Director buying two days before announcement day, David Mair, 500,000 on behalf of.

https://www.nzx.com/files/attachments/199431.pdf

[Master98]

Director buying two days before announcement day, David Mair, 500,000 on behalf of.

https://www.nzx.com/files/attachments/199431.pdf
i can't find anywhere say report come out today?

[Balance]

Director buying two days before announcement day, David Mair, 500,000 on behalf of.

https://www.nzx.com/files/attachments/199431.pdf

Something strange here - insiders like directors and management are not able to buy until results are out?

[Master98]

i have not been able to find anything either.
Tomorrow is the last day anyway.

[dingoNZ]

Tomorrow is the last day anyway.

The analyst call is at 10am FYI

[nextbigthing]

'Nature of relevant interest in those securities: Non-beneficial interest as shareholder of fund manager'

Can someone please explain in even more simple terms exactly what this means?

To me it sounds like the Director owns shares in a fund and that fund has brought shares in ATM. However how is this 'non beneficial?' He owns shares and benefits from the purchase?

Extra marks will be awarded for the use of hand puppets in any explanation.

[nextbigthing]

https://www.nzx.com/companies/ATM/announcements/254512

[winner69]

Something strange here - insiders like directors and management are not able to buy until results are out?

All through this Public Trust Forte thingie and some tie up with Forte Equity Fund

Non-beneficial interest but conspiracy people would say nudge nudge wink wink

[Master98]

The analyst call is at 10am FYI
many thanks

[winner69]

All going to plan

Finances Superbly managed to show a minimal profit (better hand loss)

Sales growing, investing ahead of the game

Well done

Almost exactly as MAC called it

[Jasemc]

Yes all predictable. Looks like they will fund USA by internal cash flow not capital raising.

[Xerof]

'Nature of relevant interest in those securities: Non-beneficial interest as shareholder of fund manager'

Can someone please explain in even more simple terms exactly what this means?

To me it sounds like the Director owns shares in a fund and that fund has brought shares in ATM. However how is this 'non beneficial?' He owns shares and benefits from the purchase?

Extra marks will be awarded for the use of hand puppets in any explanation.

shareholder in the fund manager, not the underlying fund itself, so 'non-beneficial'

[bull....]

good aust results, but not very impressive the rest.

I dont understand why they want to enter the states now when they havnt even been able to get the uk operation up and running seems to me they dont have a good model developed yet for entering these markets.

[nextbigthing]

All going to plan

Finances Superbly managed to show a minimal profit (better hand loss)

Sales growing, investing ahead of the game

Well done

Almost exactly as MAC called it

Well done MAC. $1.09 here we come :)

[Jasemc]

I tend to agree that they have enough to focus on for now. Maybe their approach is fire lots of missiles and hope something hits like australia.

[Joshuatree]

"The appreciation of the $NZ to the $A reduced operating rev by re $14 mill and EBITDA by approx $2.7 mill on the pcp"

This will almost certainly reverse in the 2015 year.

[Jasemc]

Yep as I said yesterday next year is the big result I believe. Will be interesting to see how market reacts.

[MAC]

It does take a few years to build a business and to make it profitable, whether you start one yourself, or a2MC do it in the UK or US. If all the new markets can be funded from cashflow, great, that’s full margin re-investment.

The day that a2MC announce a dividend will be the day I sell, but today the forward growths looks dammed good.

They’ve adjusted the 2016 goal from NZ$280 to NZ$230 for currency movements, fair enough, it’s always been an NZD estimate and was made back in 2012, will need to run and adjust the DCF on that.

New markets on the horizon, US next year, fresh milk into China, UHT into Asia.

It is really satisfying to be a shareholder of a company that is in such a competitive position that it can just pick the next market set each year and expand at will, that’s a rare thing.

[bonne vie]

Sales revenue up 24% ($107.4m up $20.9) while expenses up 28.6% ($106.7m up $23.8m)

It would be interesting to have a breakdown of expenses - expensed in Australian dollars (having a natural FX hedge) and those expensed in NZD affected by FX. Such a breakdown I thinkwould give us a better understanding of the expenditure on growth (unless my quick look at financials has missed where this is stated) and how well the Australian market expenses are under control. Is the price at the maximum the OZ market will accept or can/do ATM adjust price to supply increases?

Also noted increase in stock held end of year from 0.7m to $5.5m? Possibly some in China milk powder stock pile?

Overall very happy with my investment and company's continued investment in growth

[MAC]

Base Case Valuation: FY15 $1.10

It’s always a complex work up for ATM, if anyone with a genuine interest wishes to share research notes and analysis, happy to do so also offline.

ATM have adjusted their 2016 revenue goal from NZ$280 to NZ$230 to reflect currency movements, but have noted that this target does not include revenue contribution from the proposed US market. My last valuation was FY14 $1.09, effectively thus a ‘no change’ result.

Sensitivity Analysis:

Base Case (as below) $1.10

ATM Revenue Target Six Months Early (HY15 NZ$230M) $1.25

ATM Revenue Target Six Months Late (HY17 NZ$230M) $0.85

Base Case Basis:

DCF, WACC 11.0%, 30yr PG 3.0%, NZ$230M in revenues at FY16 as estimated by the A2 Milk Company, a continuation of 50% price point premiums, a continuation of gross margins at 35%.

This base case is prepared by applying numerical goals as provided by the A2 Milk Company as below in NZD. As such the applied long run exchange rates are those as assumed by the A2 Milk Company.

Revenue goal of NZ$230M by 2016
UK fresh milk market share of 1.8% by FY16
Australian market share of 10% by FY15
China infant formula revenues of NZ$60M by June 2016 representing a 1% market share

[ziggy415]

These acquisitions come amid a government-led push to raise food standards and strengthen the supply chains in the industry. China is also seeking to consolidate the infant formula industry and aims to form three to five companies with annual sales of more than 5 billion yuan each by the end of 2018, according to a plan released in June by the State Council, the country’s cabinet.
good or bad for atm

[fiasco]

If the above is correct that would eliminate ATM, as by June 2016, they would only encompass 1% of market share in China.

Also..

http://www.nbr.co.nz/article/a2-milk-hit-strong-kiwi-use-australian-cash-global-expansion-bd-161515

[ziggy415]

These acquisitions come amid a government-led push to raise food standards and strengthen the supply chains in the industry. China is also seeking to consolidate the infant formula industry and aims to form three to five companies with annual sales of more than 5 billion yuan each by the end of 2018, according to a plan released in June by the State Council, the country’s cabinet.
good or bad for atm
A2 deals thru bright dairy which is a state run company which also co owns sinlait milk processor.....above announcement may not be problem for ATM

[ziggy415]

"Moose verdict: buy the dips" ;)...he he ..thought they only made milk.....

[NT001]

Quiet day at the office, eh?

[Harrie]

Pretty sure we were all expecting that result
Increasing market share to 9% in Aussy pretty impressive, a real lack of progress in UK,USA and China.
Maybe able to accept the China story and hold ups there, but the UK and USA results are way below the expectation the market had anticipated around the beginning of this year. Expectations unforfilled, result, downward pressure on SP. Someone knew that in March April this year or was there a concentration on the NZ/Occa FX cross rates?
Lesson to always be careful of is that success in one market does not automatically transfer to other markets.
Having said this A2 may be down in those markets but definately not out by any means. Good to see structures in place to further increase penetration...and all on cashflow.
Thanks for the heads up on your DCF model MAC. Its was always a longer term play, still is

[NT001]

Basically agree, Harrie. Australia has to be the foundation from which ATM builds in the period just ahead. Incidentally to put the 9% market share in perspective, it's 9% of milk revenue but just 5% of volume. Pretty good all the same.

I'm not too concerned about the other markets. ATM was unlucky to climb into a JV in UK with Wisemans just when Wisemans was about to be taken over by Mullers who had a different view about where A2 fitted in. ATM's already had experience in the States, not all of it good, but I'm sure they've learned a lot, especially about the market there. China is going to be a mad lolly-scramble. Probably ATM will have to operate under the wings of one of the big players. It certainly can't expect any help from the Fonterra BeingMate JV, quite the opposite in fact, as Fonterra will desperately want to suppress the "A1 risk" message in its biggest market. I'd be inclined to put the effort into UK and USA, and send some Platinum formula into China if it's not too difficult. The USA is the big one because there's a huge audience there that is intelligently and discriminatingly health-conscious about milk. Start off in a few selected regions there, and then expand without all the hassles of China.

[K1W1G0LD]

Now someone tell me again how ATM are not dependent on Synlait, their CEO seems to think they are.


sales of A2's products won't ramp up until its main partner, Synlait Milk, gains registration, which Babidge hopes will be in September.

"We're very much joined at the hip with Synlait," he said. That relationship "provides more certainty and longevity going forward." A2 has made only two small shipments to China of A2 Platinum, the last in April. Once Synlait gains registration shipments would start in earnest, likely in the first half of the current year.

[Jasemc]

At least synlait new plant has nz registration today so it's been sent to china for their tick off. How long this takes the Chinese only know.

[janner]

which Babidge hopes will be in September. .

September is three days a way :-))))

Not another one you have the kitchen sink on I hope K1W1GOLD..

Although I must say you would have done well with HNZ :-))

[Harrie]

Good point on the volume vs sales revenue NT, guess the premium price paid for for a2 accounts for that.
Can't immagine that ATM will be excluded from the China market being "joined at the hip" with Synlait owned by chinese interests at the highest level, so I wouldn't think that there are too many road blocks there going fwd.
Diversifying into other product lines such as UHT, yogurt, ice cream etc is added value in the chain to those already sold on the A2 proposition.

I see an expotential growth pattern emerging for A2 milk and its by products in the next few years. Its just in its infancy at the mo.
No movement in SP despite a lot of positivity in the report...interesting!

[nextbigthing]

Mair obviously thinks Chinese registration is a given, as does Milford. If it is approved, expect some rocket ignition time...

Why would it not be a given Mooseman?

[Citizen Erased]

a2 Milk mulls ASX float

http://www.smh.com.au/business/a2-milk-mulls-asx-float-20140828-109glm.html

[see weed]

Mair obviously thinks Chinese registration is a given, as does Milford. If it is approved, expect some rocket ignition time...

If there is money to be made in a2 milk, the Chinese will want to have a shareholding in the company. Then when it starts to look like it is going to make a good profit, they will then make an offer to buy the company outright. They will offer $1.10c per share, and the directors will say no, it has to be $1.35, then the Chinese company who wants to buy a2 will send all the shareholders a letter saying....If you don't sell your shares to us for $1.35c, then the share price will go back down to .65c. 90% of shareholders will sell out of fear and the other 10% will be forced to sell. But what the Chinese company did not tell you, is that the share price will probably be worth more like $2.35c with all the thousands of hidden retail outlets throughout China. I have been through this before with FPA waiting for the go ahead to supply appliances to the 30,000 up market outlets, but never happened while in NZ hands. But that is good bussiness for Mr. China Man. Maybe I am wrong, who knows.

[iceman]

a2 Milk mulls ASX float

http://www.smh.com.au/business/a2-milk-mulls-asx-float-20140828-109glm.html

Thanks for the link CE.. Interesting that they say A2 is actively looking at ASX listing. But this article also says that ATM will "externally fund its expansion into the US" .

In the FY14 recently released, they state :
"The Strategic Agenda of the Company is based on funding revenue growth in priority international markets from increasing Australian profits. The plan continues to be refined as a result of changing market dynamics and opportunities. "

AND

"The Company has commented previously that an entry into the United States fresh milk market is under consideration. The Company has both strong intellectual property rights and know-how, and consumer research confirms the significant potential for a2 Milk brand in this market. The Company has developed market entry plans with the objective of a targeted, regionally focused initial launch in calendar 2015. The current business model assumes a cash investment of around USD20m to be funded from cash flow and internal sources over a three year period. Our focus has been to develop a plan which captures the potential of the United States market whilst, at the same time, providing the Company an appropriate balance of risk and reward for this positive initiative. "

I am confused !

[winner69]

Tuned in to the radio this morning to see if ATM featured in te business news

ATM refused Radio NZ to join the analyst briefing and didn't front up with a promised interview. Wierd

Get left with chief cheerleader from Milford to give us the good oil

http://www.radionz.co.nz/audio/player/20147611

[winner69]

thanks for that link winner...... not a convincing cheer leading performance......

The Milford guy happy though ...has to be though doesnt he

And Mr Mair and is nudge nudge wink wink is a good sign

[see weed]

FX rate play right here if I've ever seen it.

"We would have made $14M EBITDA if other economies weren't QE'ing themselves to death and pumping our dollar"

Well, the Kiwi has fallen near 10% vs AUD and is going to keep falling throughout FY15.

Moose verdict: buy the dips ;)

It is starting to look a bit dippy now. If it goes any lower, will have to top up again:)

[Balance]

Talked to an industry player who is independent of Fonterra and ATM - small players are going to get squashed within the next 3 years in China. A place to be avoided at all cost.

[see weed]

Talked to an industry player who is independent of Fonterra and ATM - small players are going to get squashed within the next 3 years in China. A place to be avoided at all cost.

:ohmy:Wow, we better give a2 a call and tell them to get out of china and chase USA market. Bal. can you mention this at the agm for us thanks, See Weed.

[Jasemc]

Their hope is the point of difference. They have a couple of years yet to establish this in china.

[ziggy415]

Talked to an industry player who is independent of Fonterra and ATM - small players are going to get squashed within the next 3 years in China. A place to be avoided at all cost.
http://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by ziggy415 http://www.sharetrader.co.nz/images/buttons/viewpost-right.png (http://www.sharetrader.co.nz/showthread.php?p=501140#post501140)
These acquisitions come amid a government-led push to raise food standards and strengthen the supply chains in the industry. China is also seeking to consolidate the infant formula industry and aims to form three to five companies with annual sales of more than 5 billion yuan each by the end of 2018, according to a plan released in June by the State Council, the country’s cabinet.
good or bad for atm



A2 deals thru bright dairy which is a state run company which also co owns sinlait milk processor.....above announcement may not be problem for ATM

[Balance]

:ohmy:Wow, we better give a2 a call and tell them to get out of china and chase USA market. Bal. can you mention this at the agm for us thanks, See Weed.

Fonterra's JV with the Chinese is indicative of what's happening in that country. The Chinese are fed up to the back teeth with food safety issues and will tackle this via allowing a few big companies to operate in their market.

Anyway, the player I was talking to is subcontracting their manufacturing/processing plant to one of the big players. Cut their losses while they can.

Don't shoot the messenger - passing on the view of one player.

[Jasemc]

A2will be owned by the Chinese by then if it gets traction.

[Ginger_steps_]

Isnt a2 the only fully A2 formula product in China at present? If health concerns are high on the agenda then wont that translate into a2 being highly sought after? Furthermore, what if a large scientific study finds that a1 milk is linked to autism etc - a2 could land themselves a huge market share as well as some pretty valuable IP.

[rbel038]

Im not trying to be cynical, but what exactly is preventing chinese farmers from breeding A2 cattle and some chinese new mega-giant producing there own A2 for the chinese domestic market? Its a country not known for its particular respect for others IP.

[Master98]

ATM only want to sell their products to china through their distributor , didn't put any investment there, I can't see any problem.

[blobbles]

Im not trying to be cynical, but what exactly is preventing chinese farmers from breeding A2 cattle and some chinese new mega-giant producing there own A2 for the chinese domestic market? Its a country not known for its particular respect for others IP.

TBH, they are a bit crap at cow farming. Have seen it first hand, at best you could say its amateurish, compared to most NZ farmers. But you are right, someone *might* decide to start stealing some A2 cows and farm them. The product probably wouldn't be trusted by Chinese consumers still though if the cows were still in China (remember 20% of Chinese farmland has huge pollution issues, most of their water supplies are polluted etc).

A2 has a premium and more digestible milk powder. Chinese consumers basically pay anything they need to for the health of their baby, particularly they middle class. And many Chinese women don't produce a lot of milk so supplement with milk powder and/or go back to work after yuezi (a month of confinement after giving birth, mostly still observed) and partly rely on milk powder. This is all good for ATM as they are positioned at the top of the market, are selling their milk powder in the west and now also in China.

Re Balances source - I heard EXACTLY the same thing about 4 years ago from a friend working in the milk industry in China who said within a year there will only be a few big approved milk suppliers (after the 2008 melamine scandal). The funny thing is now you have more small players than ever before... with the government planning on clamping down on them, I suspect they will simply join up to one of the big approved groups and sell the milk powder through them. It might get repackaged as another brand, but it will still be sold.

One thing I know is that there is absolutely no way you can stop Chinese consumers from getting what they want. They would have to ban all importation of milk powders if they really wish to keep the situation under control - a move that would be so deeply unpopular it would likely result in serious social discord. Something the Chinese government tries to avoid at all cost.

[see weed]

Fonterra's JV with the Chinese is indicative of what's happening in that country. The Chinese are fed up to the back teeth with food safety issues and will tackle this via allowing a few big companies to operate in their market.

Anyway, the player I was talking to is subcontracting their manufacturing/processing plant to one of the big players. Cut their losses while they can.

Don't shoot the messenger - passing on the view of one player.

You are a good messenger Balance, keep up the good work.

[MAC]

Speaking with DairyReporter.com, Geoffrey Babidge, CEO, the a2 Milk Company, said it expects to meet, if not exceed, the 10% target it set for itself in 2012.

“We’re ahead of that plan,” said Babidge. “We can achieve that 10% market share.”

“Optimistically, we can achieve something north of 10%, maybe between 12% and 15%. Only time will tell.”

Given its growth, Babidge said its was “probably fair to say” that efforts to discredit the a2 brand in the last year “really didn’t gain any traction”

http://www.dairyreporter.com/Manufac...-of-10-a2-Milk (http://www.dairyreporter.com/Manufacturers/Australian-milk-market-share-could-increase-north-of-10-a2-Milk)

The debate was actually benefiting A2 Milk by the increased public focus and would continue to do so as long as consumers were not misled about the benefits available from other products, Babidge said.

http://agrihq.co.nz/article/a2-poised-for-us-start?p=7

[winner69]

Biggest shareholder Freedom said this on Friday in their results announcement

The strategic investment in a2 Milk Company provides the Company and its shareholders a potentially significant value creation opportunity through a2 Milk Company’s growth in Australia and international markets.

And this

While the Company intends to maintain a strategic shareholding in the medium term, it will retain the option to realise capital from the investment to support growth opportunities.


Interesting

As an aside they have this shareholding in their books at $10m - current value $70m

[Master98]

Biggest shareholder Freedom said this on Friday in their results announcement

The strategic investment in a2 Milk Company provides the Company and its shareholders a potentially significant value creation opportunity through a2 Milk Company’s growth in Australia and international markets.

And this

While the Company intends to maintain a strategic shareholding in the medium term, it will retain the option to realise capital from the investment to support growth opportunities.


Interesting

As an aside they have this shareholding in their books at $10m - current value $70m
Freedom could bought into ATM at under 10c years ago on NZAX.

[bull....]

failure to break the 67 - 68c resistance combined with a poor report suggests lower prices to come.
breaking down, consolidated between 63-68 implies 58c for move. dyor

[Harrie]

OK, so am I reading from what winner69 has posted that freedom foods see more luckrative growth opportunities elsewhere other than supporting growth opportunities in establishing other markets for ATM?
If that is the case 0.58 sp and below looks likeley in the short term

[psychic]

OK, so am I reading from what winner69 has posted that freedom foods see more luckrative growth opportunities elsewhere other than supporting growth opportunities in establishing other markets for ATM?

Yup, reads to me they are going to realise gain..
Or have been... ?
Brian G best go sort this out.

[Harrie]

Milfords Kiwisaver funds unit price will take a big hit. Supporting growth stocks with expected potential does have its downside.
This is the problem with punters using performance stats to decide which kiwisaver fund they are going to support.
The issue is that there is no data available around volatility which is a reliable indicator of the risk taken in acheiving outperformance.

[bull....]

I dont think freedom foods was ever going to be able to do takeover unless they paid some crazy price so only option they have is to sell out now the best short term gains have been made

[MAC]

That is interesting Winner, one wonders what growth prospects Freedom may have offering better long term prospects than ATM. It may just be they have choked and run dry of seed capital for start-up’s.

Shouldn’t be any difficulties though in selling (their 17% stake I think), probably plenty of Chinese, Australian and US dairy interests standing in a long cue to snap up ATM at these undervalued levels. Maybe even Lion, Parmalat or Fonterra :).

[bull....]

this stock is going to burn the cash i believe so look forward to some cap raisings

[dingoNZ]

That is interesting Winner, one wonders what growth prospects Freedom may have offering better long term prospects than ATM. It may just be they have choked and run dry of seed capital for start-up’s.

Shouldn’t be any difficulties though in selling (their 17% stake I think), probably plenty of Chinese, Australian and US dairy interests standing in a long cue to snap up ATM at these undervalued levels. Maybe even Lion, Parmalat or Fonterra :).


I doubt any dairy giant would take them out, it would basically signal them saying that the a2 protein is better than a1 (ie their product) etc etc. I see the someone like Nestle buying them out to be honest (not anytime soon - long term I am meaning)

[NT001]

Freedom Foods has big plans for expansion into Asia and the US, so they could certainly use the cash realised from their 17% stake. And they're not an outfit that wants to be locked in as a longterm minority passive investor in someone else's development strategies that don't have a lot of synergy with their own. I would have thought their withdrawal could tie in quite nicely with ATM's Australian listing and float plans. Rather than depressing the SP, I think giving Aussie shareholders a piece of the ATM action at this time could be quite beneficial.

[see weed]

OK, so am I reading from what winner69 has posted that freedom foods see more luckrative growth opportunities elsewhere other than supporting growth opportunities in establishing other markets for ATM?
If that is the case 0.58 sp and below looks likeley in the short term

Well thats good, time to pick up some more at lower price:)

[Harrie]

Freedom Foods has big plans for expansion into Asia and the US, so they could certainly use the cash realised from their 17% stake. And they're not an outfit that wants to be locked in as a longterm minority passive investor in someone else's development strategies that don't have a lot of synergy with their own. I would have thought their withdrawal could tie in quite nicely with ATM's Australian listing and float plans. Rather than depressing the SP, I think giving Aussie shareholders a piece of the ATM action at this time could be quite beneficial.

NT, We are not actually sure that it is freedom foods doing the selling at this point, its only an option they may use in the future although it would be fair to say that if they were not thinking along those lines why even mention it?
With strong growth in Aussy and firm plans for expansion, $16mio in the bank, no debt, product diversification, the synlait connection etc, why sell?
What other opportunity out there is going to top that?

[MAC]

NT, We are not actually sure that it is freedom foods doing the selling at this point, its only an option they may use in the future although it would be fair to say that if they were not thinking along those lines why even mention it?
With strong growth in Aussy and firm plans for expansion, $16mio in the bank, no debt, product diversification, the synlait connection etc, why sell?
What other opportunity out there is going to top that?

Yep, and from the Freedom FY14 report below, medium term typically means two or three years, and they retain an option to realise some capital after, as I read it, a significant value creation opportunity.

Well, so do I and probably most in a similar timeframe.

“The strategic investment in a2 Milk Company provides the Company and its shareholders a potentially significant value creation opportunity through a2 Milk Company’s growth in Australia and international markets. “

“While the Company intends to maintain a strategic shareholding in the medium term, it will retain the option to realise capital from the investment to support growth opportunities. “

[see weed]

NT, We are not actually sure that it is freedom foods doing the selling at this point, its only an option they may use in the future although it would be fair to say that if they were not thinking along those lines why even mention it?
With strong growth in Aussy and firm plans for expansion, $16mio in the bank, no debt, product diversification, the synlait connection etc, why sell?
What other opportunity out there is going to top that?

That's right, Freedom Foods is not going to sell on market, it will be off market. They don't want to push sp down. Just picked up some at .62c to add to my collection:t_up: