ATM - A2 Milk Corporation Limited

[aperitif]

For those interested in Hainan domestic travel.

https://www.oliverwyman.com/content/dam/oliver-wyman/v2/publications/2021/may/when-and-where-will-we-see-chinese-travelers-again_hainan-opportunity.pdf

[Gerald]

Conference call: https://assets-au-01.kc-usercontent.com/bca3e5d5-83bd-02bf-1c27-acb036630e5b/0a7c3639-3630-4b68-ad32-08da9ea8a805/A2M_FYR_260821.mp3

[flyinglizard]

Conference call: https://assets-au-01.kc-usercontent.com/bca3e5d5-83bd-02bf-1c27-acb036630e5b/0a7c3639-3630-4b68-ad32-08da9ea8a805/A2M_FYR_260821.mp3


The 38min's question is spot on.

Why you believe the second half of FY22 will be sizeable better? You have intensive competition in China, covid, etc.
The answer from management team is to stabilize the English label, but no specific methods. A coupe of "hopefully". They said it could be positive or negative, it is very hard to anticipate........ From H2FY22, they should not have further inventory write down. That is the assumption built on.

[winner69]

I think the SP might head lower in the short term. I won't be increasing my current holding, but will look into it if things are on the up. I am still positive about the longterm, as COVID was their real reason they went downhill. Of course management did enjoy the ride, sitting in the passenger seat before and during the pandemic with their eyes closed and hopefully they will learn from this mistakes, as what Fletcher Building learnt. They need to prove they are on top of things for me to double down. Currently A2 is under 5% of my portfolio

No doubt Covid stuffed them up big time.

But the way the world works post-Covid world will probably be a lot different ….the ‘new norm’ as they say

It’s how A2 manages the challenges of the new norm that is important ….and they don’t give us much confidence they are on top of that yet which is rather frightening in that they assumed covid wasnt goingbto impact business in the first place.

[alokdhir]

No doubt Covid stuffed them up big time.

But the way the world works post-Covid world will probably be a lot different ….the ‘new norm’ as they say

It’s how A2 manages the challenges of the new norm that is important ….and they don’t give us much confidence they are on top of that yet which is rather frightening in that they assumed covid wasnt goingbto impact business in the first place.

IMHO after SP shakes off the quick money out of results punters ...it will be back to business ...Not breaking 5.50 ...maybe again test it but will languish in that range 5.50 to 6.50 for another quarter .

Unless what Mr B says comes true or raises head gain ...Talk of takeover ....Fire is seen after that smoke signal in the media .

It may again be strategically timed ...when its looking to breakdown completely ...lol

[Balance]

No doubt Covid stuffed them up big time.

But the way the world works post-Covid world will probably be a lot different ….the ‘new norm’ as they say

It’s how A2 manages the challenges of the new norm that is important ….and they don’t give us much confidence they are on top of that yet which is rather frightening in that they assumed covid wasnt goingbto impact business in the first place.

Which brings up an interesting point about sales & inventories :

ATM wrote off $85.6m of stock in 2H as part of its 'stock refresh' program.

'Refresh' as in exchanging old stock rapidly approaching expiry date for new stock to stop the rampant discounting taking place then as dealers attempted to get rid of stock.

While the accounting treatment is correct, there is another way to look at the $85.6m which puts ATM financials in a different light.

Which is that the sales that ATM booked earlier against the expiring stock are not really revenues - sales which ATM had booked in H1.

Given H1 Gross margin was 50%, it can be assessed that something like $170m of revenues in the first half (25% of total revenues) should be reversed - impacting through to the full year revenue figures as well.

That being the case, ATM's H1 & FY sales are artificially inflated by said $170m - so how realistic now is ATM's expectations of flat to low growth sales in 2022?

[Ggcc]

No doubt Covid stuffed them up big time.

But the way the world works post-Covid world will probably be a lot different ….the ‘new norm’ as they say

It’s how A2 manages the challenges of the new norm that is important ….and they don’t give us much confidence they are on top of that yet which is rather frightening in that they assumed covid wasnt goingbto impact business in the first place.
I agree with your caution, hence no further investment into ATM for me until they start to deliver.

[Ferg]

An interesting thought Balance. Do we know if the write off was for replacing stock in the daigou channel (which I believe is your point) or if it was for ageing stock that was sitting in a warehouse? Or a combination of the two?

[Getty]

An interesting thought Balance. Do we know if the write off was for replacing stock in the daigou channel (which I believe is your point) or if it was for ageing stock that was sitting in a warehouse? Or a combination of the two?

Gee, I hope Ronnie's mates from QEX haven't had a hand in this.

[Maxtrade]

IMHO after SP shakes off the quick money out of results punters ...it will be back to business ...Not breaking 5.50 ...maybe again test it but will languish in that range 5.50 to 6.50 for another quarter .

Unless what Mr B says comes true or raises head gain ...Talk of takeover ....Fire is seen after that smoke signal in the media .

It may again be strategically timed ...when its looking to breakdown completely ...lol

Has there been any more substantial information released about any real takeover interest. Or was it all just rumours based on the one reporters article in the Australian?

A lot of investors were hoping for some follow through with that or a better announcement than what it was so it seems we are starting to see lot of investors just realise their losses and cashing out now. Better to get something back while still can than see another 40% loss if SP does take a downward spiral from here to $3.50. Big risk to stay in the game and hope for a takeover as the only real hope. the risk vs reward just isn't there if possibly looking at 40% downside risk vs the 'hope' of a strategic buy out supporting the SP. Thats a pretty hopefully 'if'. I agree with the posts above. It's very hard to realise a loss on what was once a market darling ATM. Just need to remember the damage was already done buying in when the SP was higher $14-$21), all that can be done after this fact is minimising how much is now lost (I sold out all of my shares a while ago, at a big loss (due to the volume I foolishly had invested thinking ATM was a 'safe' stock at the time), but not as big a loss as if I sold them now. A good (yet hard) lesson learnt. Stop losses are important! I also had thought a 35% drop from $21 was a natural ATM occurrence and that it would bounce back off that, which obviously proved wrong. Having shorter stop losses in place would have prevented then getting caught in realising a larger loss which becomes harder and harder to action and pull the trigger on when you just keep hoping for a turn around. ATM shot themselves in the foot with management loosing faith from its shareholders then got caught in a perfect storm with then Daigou and Covid messing with China. Just got worse and worse. A hope for a buyout in my book isn't a good investment strategy to hold shares for. I would rather loose less on today's rate than possibly see another 30-40% likely on the cards next.
Any younger new traders out there might want to at least consider the risk involved in 'hope'. Some loss is better than a larger loss.
Good luck holders, I do hope things turn around for investors and ATM. They were on track to be a big NZ success story, however they have an immense amount of damage control to attend now though.

[Balance]

An interesting thought Balance. Do we know if the write off was for replacing stock in the daigou channel (which I believe is your point) or if it was for ageing stock that was sitting in a warehouse? Or a combination of the two?

Reading through the May update, it's clear to me that the only way ATM can achieve its aim of 'improving the dating of inventory' is via stock (as in can for can) exchange.

I think the bulk of the inventory write down will be from the Daigou & China channels - FIFO principle.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ATM/371884/345635.pdf

In the interest of the long-term health of the a2 brand and the medium-term trading outlook of the business, more aggressive actions to address these issues will be taken which will benefit consumers and the Company’s customers, distributors and partners.

The daigou/reseller margin support program will cease and the Company will work with its customers and distributors to improve the dating of inventory. From a consumer perspective, this will improve the freshness of product available in store and online, and should therefore enhance the competitiveness of the a2 offer to consumers, particularly new users. This will take time to flow through to the consumer as inventory turns through the channel.

[couta1]

Has there been any more substantial information released about any real takeover interest. Or was it all just rumours based on the one reporters article in the Australian?

A lot of investors were hoping for some follow through with that or a better announcement than what it was so it seems we are starting to see lot of investors just realise their losses and cashing out now. Better to get something back while still can than see another 40% loss if SP does take a downward spiral from here to $3.50. Big risk to stay in the game and hope for a takeover as the only real hope. the risk vs reward just isn't there if possibly looking at 40% downside risk vs the 'hope' of a strategic buy out supporting the SP. Thats a pretty hopefully 'if'. I agree with the posts above. It's very hard to realise a loss on what was once a market darling ATM. Just need to remember the damage was already done buying in when the SP was higher $14-$21), all that can be done after this fact is minimising how much is now lost (I sold out all of my shares a while ago, at a big loss (due to the volume I foolishly had invested thinking ATM was a 'safe' stock at the time), but not as big a loss as if I sold them now. A good (yet hard) lesson learnt. Stop losses are important! I also had thought a 35% drop from $21 was a natural ATM occurrence and that it would bounce back off that, which obviously proved wrong. Having shorter stop losses in place would have prevented then getting caught in realising a larger loss which becomes harder and harder to action and pull the trigger on when you just keep hoping for a turn around. ATM shot themselves in the foot with management loosing faith from its shareholders then got caught in a perfect storm with then Daigou and Covid messing with China. Just got worse and worse. A hope for a buyout in my book isn't a good investment strategy to hold shares for. I would rather loose less on today's rate than possibly see another 30-40% likely on the cards next.
Any younger new traders out there might want to at least consider the risk involved in 'hope'. Some loss is better than a larger loss.
Good luck holders, I do hope things turn around for investors and ATM. They were on track to be a big NZ success story, however they have an immense amount of damage control to attend now though. Thanks for being open and honest, I'm sure there are many others exactly like us to varying degrees, as I said in my posts above there are far more losers than winners in the A2 story to date.

[bottomfeeder]

Yes, tempting to sell out, when the going looks bad. But bearing in mind the SP now is a shadow of what it was in its heyday, the risk of holding has to be manageable. Could be a wise move to sell now in the thought you can buy back at a few bucks cheaper, or do you hold what you have and average down if the SP gets a few bucks cheaper. That is the conundrum of investing in the equity market, in uncertain times.

[davflaws]

Yes, tempting to sell out, when the going looks bad. But bearing in mind the SP now is a shadow of what it was in its heyday, the risk of holding has to be manageable. Could be a wise move to sell now in the thought you can buy back at a few bucks cheaper, or do you hold what you have and average down if the SP gets a few bucks cheaper. That is the conundrum of investing in the equity market, in uncertain times.

It also depends on whether you want to risk being classed as a trader. I don't, so for me out and in again isn't really an option. I was wrong to ignore the "Bs" a few months back, and was lucky to have halved my holding around 12 bucks for family reasons - but what to do now???

I have taken a few deep breaths and decided to wait and see what the new CEO comes up with when he puts out his review. I keep thinking of my repeated decisions not to get into Xero - which may of course be totally irrelevant - but a guy I know did - and he will never need to work again.

[bull....]

Reading through the May update, it's clear to me that the only way ATM can achieve its aim of 'improving the dating of inventory' is via stock (as in can for can) exchange.

I think the bulk of the inventory write down will be from the Daigou & China channels - FIFO principle.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ATM/371884/345635.pdf

In the interest of the long-term health of the a2 brand and the medium-term trading outlook of the business, more aggressive actions to address these issues will be taken which will benefit consumers and the Company’s customers, distributors and partners.

The daigou/reseller margin support program will cease and the Company will work with its customers and distributors to improve the dating of inventory. From a consumer perspective, this will improve the freshness of product available in store and online, and should therefore enhance the competitiveness of the a2 offer to consumers, particularly new users. This will take time to flow through to the consumer as inventory turns through the channel.

i agree , main daigou people were paid off to ditch the old stuff

[aperitif]

It also depends on whether you want to risk being classed as a trader. I don't, so for me out and in again isn't really an option. I was wrong to ignore the "Bs" a few months back, and was lucky to have halved my holding around 12 bucks for family reasons - but what to do now???

I have taken a few deep breaths and decided to wait and see what the new CEO comes up with when he puts out his review. I keep thinking of my repeated decisions not to get into Xero - which may of course be totally irrelevant - but a guy I know did - and he will never need to work again.

I recommend you go back and read the Xero forum around late 2014 if you’re bored. It’s almost comical

[Balance]

i agree , main daigou people were paid off to ditch the old stuff

ATM did the right thing swapping the old stock for slightly less old & newer stock and in the process, stop the price discounting which undermines A2's premium position.

It means dealers overbought in F2021, artificially inflating ATM's sales in that year.

[bull....]

ATM did the right thing swapping the old stock for slightly less old & newer stock and in the process, stop the price discounting which undermines A2's premium position.

It means dealers overbought in F2021, artificially inflating ATM's sales in that year.

spot on and the previous yr as well due to a2 cult status that yr. the hype lol even the the infant formula traders got caught in the crazyness

[alokdhir]

If AIA and AIR can stay at these levels ...then why we need to price ATM based on only current and our imagined future earnings . As AIA has potential earnings built into price ...same can be true for ATM too .

So at these levels not much to fear ...only a matter of time like with AIA . $ 6 can become $ 5 for sometime before $ 10 comes soon after ...:cool:

[Balance]

If AIA and AIR can stay at these levels ...then why we need to price ATM based on only current and our imagined future earnings . As AIA has potential earnings built into price ...same can be true for ATM too .

So at these levels not much to fear ...only a matter of time like with AIA . $ 6 can become $ 5 for sometime before $ 10 comes soon after ...:cool:

AIA is a monopoly & has arguably the biggest undeveloped landbank in Auckland.

Try another comparison.

[BlackPeter]

If AIA and AIR can stay at these levels ...then why we need to price ATM based on only current and our imagined future earnings . As AIA has potential earnings built into price ...same can be true for ATM too .

So at these levels not much to fear ...only a matter of time like with AIA . $ 6 can become $ 5 for sometime before $ 10 comes soon after ...:cool:

AIA is not priced based on its earnings potential, but on the value of its real estate.
AIR is not priced on the value of its earnings, but on a huge (and probably soon evaporating) hype factor based on the strength of its brand and based on government support (even if this does not help the retail share holder).
ATM does not own real estate (well, not enough :) ) - and it used up already all the hype it had during the good times ...

[alokdhir]

AIA is a monopoly & has arguably the biggest undeveloped landbank in Auckland.

Try another comparison.

U ignored AIR buddy ...

Also it was comparison of the concept not businesses ...

[alokdhir]

AIA is not priced based on its earnings potential, but on the value of its real estate.
AIR is not priced on the value of its earnings, but on a huge (and probably soon evaporating) hype factor based on the strength of its brand and based on government support (even if this does not help the retail share holder).
ATM does not own real estate (well, not enough :) - and it used already all the hype it had during the good times ...

Agree with all but that brought us to $ 6 from $ 21.50 ...at this price ATM has almost nothing built into it for the future ...only way down is if business going bust .

Even if they make 25 Cents next year then 30 cents ...it justifies this price ...IMHO

I am just trying to figure out why its holding out so well ...what people who buy seeing ...how to justify current SP ...doesnt necessarily mean I am buying it or recommending it .

Its just trying to understand SP mechanism of stocks ....so AIA , AIR and FBU old times came to mind ( it had consecutive loss years ...so negative eps ...did not go 0 )

So it seems markets do ascribe some potential earnings value to businesses too ...like all startups start at super high multiples

[mike2020]

Agree with all but that brought us to $ 6 from $ 21.50 ...at this price ATM has almost nothing built into it for the future ...only way down is if business going bust .

Even if they make 25 Cents next year then 30 cents ...it justifies this price ...IMHO

I am just trying to figure out why its holding out so well ...what people who buy seeing ...how to justify current SP ...doesnt necessarily mean I am buying it or recommending it .

Its just trying to understand SP mechanism of stocks ....so AIA , AIR and FBU old times came to mind ( it had consecutive loss years ...so negative eps ...did not go 0 )
I am firmly of the opinion a lot of people are buying because it appears low by historical standards. Same with AIR. That may not account for all of it, you have a few people who just never want to believe the truth regardless of what is good for them. Covid anti vaxers for example. They may get lucky in the long run on AIR and who knows whats around the corner for ATM but business wise I would say nothing. TO or bust with thumb out.

[BlackPeter]

Agree with all but that brought us to $ 6 from $ 21.50 ...at this price ATM has almost nothing built into it for the future ...only way down is if business going bust .

Even if they make 25 Cents next year then 30 cents ...it justifies this price ...IMHO

...


I guess it is up to the market to decide what 25 or 30 cents EPS are worth. It is as well up to the market to decide whether they do see any risks to this earnings potential - or, on the other hand - growing potential.

Personally I would not pay a PE of 25+ for a boring old agricultural company (what ATM without the growth would be), more like half of that. I would be however happy to pay this PE if I would believe in a earnings CAGR of say 10 to 15.

I assume, this is what the (rational part of the) market prices in at the moment for ATM and hey - it might be right if they are lucky and the stars align. It is just that I don't see the management pulling this off, and investing just based on hope does not work for me :):

[alokdhir]

I guess it is up to the market to decide what 25 or 30 cents EPS are worth. It is as well up to the market to decide whether they do see any risks to this earnings potential - or, on the other hand - growing potential.

Personally I would not pay a PE of 25+ for a boring old agricultural company (what ATM without the growth would be), more like half of that. I would be however happy to pay this PE if I would believe in a earnings CAGR of say 10 to 15.

I assume, this is what the (rational part of the) market prices in at the moment for ATM and hey - it might be right if they are lucky and the stars align. It is just that I don't see the management pulling this off, and investing just based on hope does not work for me :):

Yes ...prudence and not luck based gambling investing works better ...fully agree ...Me was and still is most disenchanted with ATM management ...I lost total faith in them last Dec. and sold out all with a wow not to invest in ATM ....Fisher funds also learned the same lesson and said so in their annual report of KFL .

Personally I am surprised at it holding $ 6

[aperitif]

Suitor/acquirer will soak up MVM’s surplus. This is a strategic masterclass from the a2 management team. The stake will fund the B&C facility FY23. Now we wait….

[couta1]

This stock is untouchable at the moment for people like me (Go big or go home types) unless you want to end up living on the street in your retirement years.

[alokdhir]

This stock is untouchable at the moment for people like me (Go big or go home types) unless you want to end up living on the street in your retirement years.

Yes ...its firmly in a downtrend ....too much below its 400 day MA for any comfort to buy it . If u compare it with FBU downtrend ....it took FBU almost 2.5 years to come back over 400SMA ...this points to another 1.5 years left for ATM ...just for idea how long u need to hold for it actually returns to up move ...

[couta1]

Yes ...its firmly in a downtrend ....too much below its 400 day MA for any comfort to buy it . If u compare it with FBU downtrend ....it took FBU almost 2.5 years to come back over 400SMA ...this points to another 1.5 years left for ATM ...just for idea how long u need to hold for it actually returns to up move ... Too many unknowns now to go hard with another big holding and as you say there is no hurry to buy in, there will be plenty of time down the track to buy back in once and if the worm turns and heads north in a lasting way.

[Balance]

Yes ...its firmly in a downtrend ....too much below its 400 day MA for any comfort to buy it . If u compare it with FBU downtrend ....it took FBU almost 2.5 years to come back over 400SMA ...this points to another 1.5 years left for ATM ...just for idea how long u need to hold for it actually returns to up move ...

What many observers in the market have missed is that ATM delivered yet another earnings downgrade with its latest results.

It did not come directly from the company but it is clear that analysts & brokers, after discussing the results with the company, did a wholesale downgrade of earnings - as reflected in consensus forecast for F22 dropping from 24 cps to 16 cps.

Most unwise to buy a stock until it moves from downgrades to upgrades.

[winner69]

What many observers in the market have missed is that ATM delivered yet another earnings downgrade with its latest results.

It did not come directly from the company but it is clear that analysts & brokers, after discussing the results with the company, did a wholesale downgrade of earnings - as reflected in consensus forecast for F22 dropping from 24 cps to 16 cps.

Most unwise to buy a stock until it moves from downgrades to upgrades.

Counter goes back to zero each year

This is first downgrade ...from the company because the commentary was so dismal

Downgrades come in threes I believe

[couta1]

What many observers in the market have missed is that ATM delivered yet another earnings downgrade with its latest results.

It did not come directly from the company but it is clear that analysts & brokers, after discussing the results with the company, did a wholesale downgrade of earnings - as reflected in consensus forecast for F22 dropping from 24 cps to 16 cps.

Most unwise to buy a stock until it moves from downgrades to upgrades. Other than the fact they met their revised guidance and didn't give future guidance that report was truly abysmal/uninspiring and the reason I sold my latest holding for a big loss.

[alokdhir]

What many observers in the market have missed is that ATM delivered yet another earnings downgrade with its latest results.

It did not come directly from the company but it is clear that analysts & brokers, after discussing the results with the company, did a wholesale downgrade of earnings - as reflected in consensus forecast for F22 dropping from 24 cps to 16 cps.

Most unwise to buy a stock until it moves from downgrades to upgrades.

Only the people having privileged information will be brave enough to buy it ...Smoke screen or real fire ...Very soon another leak story is going to come out in the public ...thats a good way to play such downbeat stock if u have $ 2billion budget ...lol

[Balance]

Counter goes back to zero each year

This is first downgrade ...from the company because the commentary was so dismal

Downgrades come in threes I believe

It is a poor move by DB & the company to stop giving guidance on earnings. It signifies that the company is still at sea with no real idea of how to achieve earnings growth.

The company has moved from an era when demand exceeded supply - was so easy to forecast & give guidance. Matter of producing as much as could be done - simple.

Now comes the hard part - creating demand and managing supply to meet demand. The hard work starts.

Not a company which inspires confidence about how it is going to move back to a growth path.

[winner69]

It is a poor move by DB & the company to stop giving guidance on earnings. It signifies that the company is still at sea with no real idea of how to achieve earnings growth.

The company has moved from an era when demand exceeded supply - was so easy to forecast & give guidance. Matter of producing as much as could be done - simple.

Now comes the hard part - creating demand and managing supply to meet demand. The hard work starts.

Not a company which inspires confidence about how it is going to move back to a growth path.

I believe their IT systems are improving …..but too many spreadsheets still being used

[Balance]

I believe their IT systems are improving …..but too many spreadsheets still being used

Still mind boggling that they had to ‘write off’ $120m of stock! WhT kind of Mickey Mouse system were they using!!!???

[couta1]

Still mind boggling that they had to ‘write off’ $120m of stock! WhT kind of Mickey Mouse system were they using!!!??? The Flintstones edition.

[Getty]

Still mind boggling that they had to ‘write off’ $120m of stock! WhT kind of Mickey Mouse system were they using!!!???

Figures dont lie, but liars can figure..

[Greekwatchdog]

I am disappointed for a business this size not to have proper infrastructure systems in place whether it be IT or Supply Chain. There reliance on archaic system's is disrespectful to shareholder's given the profit they were making for xx amount of years. Previous management failed miserably and from here its a massive task for market to gain trust in the business. I would like to think they invest heavily into a proper MRP system throughout the group ie SAP and sort that rat ****e Supply Chain. If you going to throw money around trying to stabilize the business so it can start to grow again then look at "root causes" before your start splashing the cash on Sales and Marketing.

[Getty]

Just a cynical side thought.

The Directors put out a lack lustre report, causing the SP to drift downwards, triggering a Takeover at a premium to current SP, suddenly their and all holders shares go up, and hey, they look like the good guys, no 2 year grind out to turn the ship around, and every one lives happily ever after.

Perhaps I've been reading too much Mills & Boon.

[nztx]

Just a cynical side thought.

The Directors put out a lack lustre report, causing the SP to drift downwards, triggering a Takeover at a premium to current SP, suddenly their and all holders shares go up, and hey, they look like the good guys, no 2 year grind out to turn the ship around, and every one lives happily ever after.

Perhaps I've been reading too much Mills & Boon.

sounds too easy - my friend :)

would the same trick work for hocking off an unloved Gold Mine in desperate need of some Ca$h ? ;)

[alokdhir]

Just a cynical side thought.

The Directors put out a lack lustre report, causing the SP to drift downwards, triggering a Takeover at a premium to current SP, suddenly their and all holders shares go up, and hey, they look like the good guys, no 2 year grind out to turn the ship around, and every one lives happily ever after.

Perhaps I've been reading too much Mills & Boon.

Its very possible ...thats why last media report specifically said that action will happen after results only . How long u want to wait ? Maybe 15 days or maybe 3 months ...But most likely 15 days if anything to that original media speculation

First signs of something up will be $ 6 not breaking ...

[winner69]

Sounds familiar

Poor BUBs

https://www.businessnewsaustralia.com/articles/bubs-doubles-australian-market-share--but-records-loss-amidst-daigou-downturn-and-china-reset.html

[Beagle]

It is a poor move by DB & the company to stop giving guidance on earnings. It signifies that the company is still at sea with no real idea of how to achieve earnings growth.

The company has moved from an era when demand exceeded supply - was so easy to forecast & give guidance. Matter of producing as much as could be done - simple.

Now comes the hard part - creating demand and managing supply to meet demand. The hard work starts.

Not a company which inspires confidence about how it is going to move back to a growth path.

I think that sums up the situation very well.

[Getty]

i agree , main daigou people were paid off to ditch the old stuff

This would have to be a double edged sword wouldn't it.

ATM shareholders bear the writedown, then the daigou mob dont destroy the product, but move it along through their own or other channels, effectively underseling the new stock.

How many 3rd world customers care about an arbitrarily placed use by date anyway, you think me silly huh?

[alokdhir]

This would have to be a double edged sword wouldn't it.

ATM shareholders bear the writedown, then the daigou mob dont destroy the product, but move it along through their own or other channels, effectively underseling the new stock.

How many 3rd world customers care about an arbitrarily placed use by date anyway, you think me silly huh?

I think all the ones who are ready to pay 3 times the price to regular IF ...

[Getty]

I think all the ones who are ready to pay 3 times the price to regular IF ...

Now we're getting to the truth.

The only way to sell anything in the Orient for 3X competing price, is to get them to believe its an aphrodisiac!

Did some silly do gooder tell them it isn't?

[Baa_Baa]

I am disappointed for a business this size not to have proper infrastructure systems in place whether it be IT or Supply Chain. There reliance on archaic system's is disrespectful to shareholder's given the profit they were making for xx amount of years. Previous management failed miserably and from here its a massive task for market to gain trust in the business. I would like to think they invest heavily into a proper MRP system throughout the group ie SAP and sort that rat ****e Supply Chain. If you going to throw money around trying to stabilize the business so it can start to grow again then look at "root causes" before your start splashing the cash on Sales and Marketing.

Completely off the top of my head, I think the annual reports said $9.8 million spent on IT and they implemented Oracle Cloud ERP. Spreadsheets are long gone.

Even Oracle cite A2 customer case study (https://www.oracle.com/news/connect/a2-milk-standardizes-on-oracle-cloud.html). Have a read, it has more detail than A2 would disclose.

"In April 2021, a2 Milk standardized worldwide on several Oracle Cloud applications: Oracle Cloud ERP (https://www.oracle.com/erp/)’s accounts payable, accounts receivable, general ledger, cash/collections management, and financial analytics modules; Oracle Cloud EPM (https://www.oracle.com/performance-management/)’s financial consolidation and close module; and Oracle Cloud SCM (https://www.oracle.com/scm/)’s procurement, inventory management, order management, and manufacturing modules. Later this year, the company plans to go live on Oracle Cloud EPM’s planning and budgeting module and Oracle Cloud ERP’s expenses module.“We’ve now got all data coming together in a single source, which means we can get information globally quickly—any information,” CFO Strauss says. “We never had that before. There are also benefits of controls. Because we’ve moved to global processes, I now know the processes in place in China are now the same as in the US and in Australia, which gives me a much easier sleep at night.”

Don't believe the BS that gets bandied around here, DYOR.

[Greekwatchdog]

Thanks Baa Baa.

[Balance]

This would have to be a double edged sword wouldn't it.

ATM shareholders bear the writedown, then the daigou mob dont destroy the product, but move it along through their own or other channels, effectively underseling the new stock.

How many 3rd world customers care about an arbitrarily placed use by date anyway, you think me silly huh?

3rd world?

Have you been to China and see what a real first world country looks like in the 21st Century!?

Anyway, the point is that ATM had IF stock coming out of its ears in the last year (having completely & totally misjudged demand). In the meantime, there was rampant discounting of its product in the China market as dealers there tried to get rid of stock rapidly approaching expiry date. ATM's first attempt was to provide margin support - as in reducing its wholesale price to the corporate daigou's. Did not work and in fact, exacebated the discounting in the market!

So ATM did the right thing by swapping the stock approaching expiry in return for less dated stock - in return for no further discounting.

ATM collected and disposed off the expiring stock.

[Baa_Baa]

Completely off the top of my head, I think the annual reports said $9.8 million spent on IT and they implemented Oracle Cloud ERP. Spreadsheets are long gone.

Even Oracle cite A2 customer case study (https://www.oracle.com/news/connect/a2-milk-standardizes-on-oracle-cloud.html). Have a read, it has more detail than A2 would disclose.

"In April 2021, a2 Milk standardized worldwide on several Oracle Cloud applications: Oracle Cloud ERP (https://www.oracle.com/erp/)’s accounts payable, accounts receivable, general ledger, cash/collections management, and financial analytics modules; Oracle Cloud EPM (https://www.oracle.com/performance-management/)’s financial consolidation and close module; and Oracle Cloud SCM (https://www.oracle.com/scm/)’s procurement, inventory management, order management, and manufacturing modules. Later this year, the company plans to go live on Oracle Cloud EPM’s planning and budgeting module and Oracle Cloud ERP’s expenses module.“We’ve now got all data coming together in a single source, which means we can get information globally quickly—any information,” CFO Strauss says. “We never had that before. There are also benefits of controls. Because we’ve moved to global processes, I now know the processes in place in China are now the same as in the US and in Australia, which gives me a much easier sleep at night.”

Don't believe the BS that gets bandied around here, DYOR.

Correction, from the Annual Report - $9.695m on "ERP Project Costs" vs $90,000 FY20 - "ERP project costs include costs of configuring and customising software in a Cloud Computing Service Agreement".

[Getty]

3rd world?

Have you been to China and see what a real first world country looks like in the 21st Century!?

Anyway, the point is that ATM had IF stock coming out of its ears in the last year (having completely & totally misjudged demand). In the meantime, there was rampant discounting of its product in the China market as dealers there tried to get rid of stock rapidly approaching expiry date. ATM's first attempt was to provide margin support - as in reducing its wholesale price to the corporate daigou's. Did not work and in fact, exacebated the discounting in the market!

So ATM did the right thing by swapping the stock approaching expiry in return for less dated stock - in return for no further discounting.

ATM collected and disposed off the expiring stock.

Never mind my tongue in cheek comments, its your last sentence is the one that matters.

Its reassuring to know that stock was collected and disposed, not just labels, lids etc, that leave open possibilities counter productive to ATM, especially with so many $million involved.

[Balance]

Now we're getting to the truth.

The only way to sell anything in the Orient for 3X competing price, is to get them to believe its an aphrodisiac!

Did some silly do gooder tell them it isn't?

True - or that it has unrivaled health benefits. That's why manuka honey (anti-cancer) & ling fish maw (freaking swim bladder) sell for unbelievable prices.

ATM benefited from the health benefit associated with A2 - easier to digest for babies with milk intolerance. That has not changed but what has changed is the macro settings ATM operates in - increased competition and a declining China birth rate. As acknowledged now by the company.

Remember how there were many a poster here arguing that domestic competition was no threat (& another Sanlu melamine incident was a matter of time) and ATM was immune from a declining birthrate? Expensive & costly assumptions!

[Balance]

Correction, from the Annual Report - $9.695m on "ERP Project Costs" vs $90,000 FY20 - "ERP project costs include costs of configuring and customising software in a Cloud Computing Service Agreement".

Agree with you - one suspects that when the Oracle system went live, ATM executives could not believe their eyes at the horrendous mismatch between sales and inventories!

[flyinglizard]

Correction, from the Annual Report - $9.695m on "ERP Project Costs" vs $90,000 FY20 - "ERP project costs include costs of configuring and customising software in a Cloud Computing Service Agreement".

Thanks for upgrade. The question is that have they completed the IT project yet. Otherwise, maybe another $10m IT spending for FY22.

Notes:

- maybe $10m IT spending
- $20m depreciation from MVM
- Loss from MVM
- Inventory write-off in H1 FY22
- possible R&D expense, need to be confirmed in Oct

From conference call, they said the gross margin would be around 48% for FY22.

what else?

[Beagle]

We have some milk powder here bought as a reserve supply of milk for the first lockdown in March 2020. Its still current 17 months later, (am using some of it up now). Can someone please explain to me how its possible ATM ever got themselves into a position where they had to destroy ~ $120m of product.
Beggars belief that they could be that incompetent with their inventory management !

[flyinglizard]

We have some milk powder here bought as a reserve supply of milk for the first lockdown in March 2020. Its still current 17 months later, (am using some of it up now). Can someone please explain to me how its possible ATM ever got themselves into a position where they had to destroy ~ $120m of product.
Beggars belief that they could be that incompetent with their inventory management !

Mr. B, the A2 IF can be stored up to 2 years time. If you buy some A2 IF bulk produced in March 2020, then it is very hard to sell after Sep 2021, customers won't buy (only 3/4 months to expire).

A2 found the sales disruption around July/Aug 2020, we can assume that they still ordered a lot of inventory before Aug 2020, because they believed their business growth model at that time, even during the covid trading environment. I doubt that they cannot write off all products within H1 FY22, they still have some to write off in H2 FY22. How do they deal with the inventory cannot be sold during the period from March 2020 to Aug 2020 (expires in July/Aug 2022). Just following the logic, not the words from their mouth.

The swap policy seems forever to stabilize the English label sales channel, not one off, if they try to keep the branding and A2 premium price.

[Baa_Baa]

We have some milk powder here bought as a reserve supply of milk for the first lockdown in March 2020. Its still current 17 months later, (am using some of it up now). Can someone please explain to me how its possible ATM ever got themselves into a position where they had to destroy ~ $120m of product.
Beggars belief that they could be that incompetent with their inventory management !

Read the Oracle link in my earlier post, it explains what they had and why it was a problem, hence the new systems and business processes, standardised worldwide. It wasn't just inventory management, it seems pretty much everything was running on an abacus.

Good that it's been/being fixed it, despite the circumstances. Jayne called this out and initiated the changes, so it wasn't all driven from Covid disaster. She also called out the marketing spend and channels, but was fired.

[Waltzing]

Mr B strikes again...

lets face it any Country or business that is bound tightly to china is treading on rough ground..

Who want to go over weight on a stock that depends on this new/old regime.

Jack ma now probably in a rice field somewhere.

https://www.nzherald.co.nz/entertainment/china-erases-billionaire-actress-zhao-wei-from-history/CYOXSXLGDG2SVBZCPLQ2TGSDBA/

[Beagle]

Mr B strikes again...

lets face it any Country or business that is bound tightly to china is treading on rough ground..

Who want to go over weight on a stock that depends on this new/old regime.

Jack ma now probably in a rice field somewhere.

https://www.nzherald.co.nz/entertainment/china-erases-billionaire-actress-zhao-wei-from-history/CYOXSXLGDG2SVBZCPLQ2TGSDBA/

WOW that linked article is breathtaking. Who knows what's next ? With the simple stroke of a pen they could say its not in our common national cultural interests for anyone to buy imported Mercedes-Benz's, Moet, milk powder...you name it.

Agree 100%. I've never liked that ATM is so heavily dependent on China.

[Baa_Baa]

Agree 100%. I've never liked that ATM is so heavily dependent on China.

As China continues to invest in end-to-end supply chains for 'essential' products, you'll see free trade agreements put in place, ownership of all or part of the supply chains, and driving by mandate market distribution and consumption, including even recently increasing babies limit to 3.

These and other factors are in play, for example what part of Synlait, MVM and indeed A2M does 'China' or chinese companies, actually own, influence, even control? Perhaps being 'dependent on China' is an advantage.

Personally, the 'China factor' around A2 Milk is a net positive risk in my analysis outweighing the negative risk. Still a risk nonetheless, like everything in investing there are risks.

[Balance]

Mr B strikes again...

lets face it any Country or business that is bound tightly to china is treading on rough ground..

Who want to go over weight on a stock that depends on this new/old regime.

Jack ma now probably in a rice field somewhere.

https://www.nzherald.co.nz/entertainment/china-erases-billionaire-actress-zhao-wei-from-history/CYOXSXLGDG2SVBZCPLQ2TGSDBA/

This is what happens when you evade tax & illegally shift money overseas in China.

NZ should try it?

[aperitif]

Mr. B, the A2 IF can be stored up to 2 years time. If you buy some A2 IF bulk produced in March 2020, then it is very hard to sell after Sep 2021, customers won't buy (only 3/4 months to expire).

A2 found the sales disruption around July/Aug 2020, we can assume that they still ordered a lot of inventory before Aug 2020, because they believed their business growth model at that time, even during the covid trading environment. I doubt that they cannot write off all products within H1 FY22, they still have some to write off in H2 FY22. How do they deal with the inventory cannot be sold during the period from March 2020 to Aug 2020 (expires in July/Aug 2022). Just following the logic, not the words from their mouth.

The swap policy seems forever to stabilize the English label sales channel, not one off, if they try to keep the branding and A2 premium price.

Have you guys even listened to the conference calls???? Or are you just bored?

[Balance]

Have you guys even listened to the conference calls???? Or are you just bored?

Thought you would have learnt by now to do your own assessment rather than rely on the '6 times downgrade' commentaries & explanations from ATM's discredited management?

Sp was $8.75 when you posted below on 28 March :


Keep it coming guys!

Emotion, be it fear or greed, is the greatest enemy of the ordinary investor. The point of maximum opportunity is when the crowd is pessimistic (or fearful) and the point of maximum risk is when the crowd is euphoric (and greedy)

[davflaws]

Jayne called this out and initiated the changes, so it wasn't all driven from Covid disaster. She also called out the marketing spend and channels, but was fired.

And was vilified big time on this thread.

[Balance]

And was vilified big time on this thread.

Not all of us ... :)


There is definitely more to the situation than Jane quitting because she was unprepared for the amount of traveling required to do the job.

Come on - she is a change agent, highly regarded in her previous roles and was head-hunted out of Qantas by ATM to lead the company to its next phase of growth.

And the next phase of growth strategy put in place by her involves US (in place of UK) and greater emphasis on China (no additional travel required).

Looks to me like it is a case of the instos and in turn, the board getting cold feet over the growth strategy indeed.

I was one of those spooked by the heavy spend in the US as part of the growth strategy - the US being a graveyard of many a NZ companies' growth ambitions. But that's just me.

Meanwhile, I am with W69 - we are seeing some on this forum who were keen supporters of the growth strategy under Jane now turning personal on her - not a good look.

Fact is that covid exposed the weaknesses in ATM - not least of which was a complacent & backward board and a has been CEO, all asleep on the job.

[flyinglizard]

Have you guys even listened to the conference calls???? Or are you just bored?

I cannot trust those people sell off at the peak and gave market wrong forecast.
They said that they may have a share buyback plan, then failed again.
They said that they may choose new innovative products or other methods to improve return to shareholders. I put a question mark, no direction and R&D budget have been given.
They said that they will release new strategy review in Oct. I put a question mark.......
They said that H2FY22 would be turning around, and grow to continue, I doubt that.......

Time will tell

Meanwhile, I was shocked that a multi billion company using excel spreadsheet to manage inventory for years, till last year to upgrade.

[dobby41]

This is what happens when you evade tax & illegally shift money overseas in China.

NZ should try it?

Did she?
"It admits no official reason for her erasure has been given."
"She's been accused of tax evasion"
Accusation isn't the same as proof.

Do you really want NZ to try this?

[Balance]

Did she?
"It admits no official reason for her erasure has been given."
"She's been accused of tax evasion"
Accusation isn't the same as proof.

Do you really want NZ to try this?

Yup - for evading tax & illegally shifting money (read money laundering).

I see you have swallowed whole the Western media commentary and write-up of anything China. You may want to try other Asian news coverage to get a balanced view.

[dobby41]

Yup - for evading tax & illegally shifting money (read money laundering).

I see you have swallowed whole the Western media commentary and write-up of anything China. You may want to try other Asian news coverage to get a balanced view.

Actually, I haven't and I'd expected you to label me as China suck-up.
She is still accused rather than found guilty.
You see I can see a balanced view rather than let ideology bias me one way or the other.

China has always had a China First policy and is very good at it.
That isn't a negative for me - it just is what it is!

[alokdhir]

Actually, I haven't and I'd expected you to label me as China suck-up.
She is still accused rather than found guilty.
You see I can see a balanced view rather than let ideology bias me one way or the other.

China has always had a China First policy and is very good at it.
That isn't a negative for me - it just is what it is!

Who is " She " ? I thought Jack Ma is a " He " and maybe still ...lol

[Balance]

I cannot trust those people sell off at the peak and gave market wrong forecast.

Meanwhile, I was shocked that a multi billion company using excel spreadsheet to manage inventory for years, till last year to upgrade.

You must appreciate that ATM was easily selling every can they could produce until the proverbial hit the fan last year.

Remember the queues & fights at the supermarkets in Australia where the daigou buyers were buying 2 cans of IF at a time?

ATM thought it was going to last forever - demand would consistently exceed supply.

That's why the directors and managers became fat and lazy, and instead of looking ahead and future-proof the business by upgrading systems, they instead sold their shares and got rid Jayne for daring to pursue a strategy of short term pain for long term gain.

And the BOD is still there!

Short of a takeover, there is only one direction the sp is going to go imo - south towards $3.00.

[winner69]

You must appreciate that ATM was easily selling every can they could produce until the proverbial hit the fan last year.

Remember the queues & fights at the supermarkets in Australia where the daigou buyers were buying 2 cans of IF at a time?

ATM thought it was going to last forever - demand would consistently exceed supply.

That's why the directors and managers became fat and lazy, and instead of looking ahead and future-proof the business by upgrading systems, they instead sold their shares and got rid Jayne for daring to pursue a strategy of short term pain for long term gain.

And the BOD is still there!

Short of a takeover, there is only one direction the sp is going to go imo - south towards $3.00.

Does the Chairman still live in the UK?

[dobby41]

Who is " She " ? I thought Jack Ma is a " He " and maybe still ...lol

Zhao Wei is who we (I) were talking about.
She is the one accused of tax issues etc.
Jack Ma was mentioned in passing.

[alokdhir]

Zhao Wei is who we (I) were talking about.
She is the one accused of tax issues etc.
Jack Ma was mentioned in passing.

Ok ...I thought Jack Ma in the rice fields was the topic of discussion ...my bad .:p

[Balance]

Zhao Wei is who we (I) were talking about.
She is the one accused of tax issues etc.
Jack Ma was mentioned in passing.

I was in a meeting where representatives of several China companies were in NZ to pursue business opportunities many years ago.

To a question from one of our NZ exporters about politics (communism) in China and how that interacted with business (capitalist), I can recall vividly this comment from the head of the delegation : "Leave politics to the government and they will leave business alone."

[alokdhir]

I was in a meeting where representatives of several China companies were in NZ to pursue business opportunities many years ago.

To a question from one of our NZ exporters about politics (communism) in China and how that interacted with business (capitalist), I can recall vividly this comment from the head of the delegation : "Leave politics to the government and they will leave business alone."

Big question ? Can it be done ? When political compulsions infringe on business prospects ??

[Balance]

Big question ? Can it be done ? When political compulsions infringe on business prospects ??

China's powerhouse economy is proof that it can be done?

[alokdhir]

China's powerhouse economy is proof that it can be done?

I will reserve my opinion on that ...Singapore did it when its legendary PM said to businesses " You have full economic freedom but no political freedom "

But in China now politics have started encroaching on economic freedom ...which actually lead to all that economic progress ...Now the politicians want total control over all types of activity . U cant have your cake and eat it too . So called Communist country following capitalistic policies but for this long only ...they trying to go back to basics again . As not easy to digest the dichotomy . Disciplined or controlled population is a very submissive onlooker ...lets c how long it takes to wake them up fully ...though I wont be betting on it :p

[Balance]

I will reserve my opinion on that ...Singapore did it when its legendary PM said to businesses " You have full economic freedom but no political freedom "

But in China now politics have started encroaching on economic freedom ...which actually lead to all that economic progress ...Now the politicians want total control over all types of activity . U cant have your cake and eat it too . So called Communist country following capitalistic policies but for this long only ...they trying to go back to basics again . As not easy to digest the dichotomy . Disciplined or controlled population is a very submissive onlooker ...lets c how long it takes to wake them up fully ...though I wont be betting on it :p

An observation :

Corruption was rife in China until Xi came into power and took action. Few thought his crackdown would succeed given how entrenched corruption was in businesses and in party politics.

A few high profile corruption cases and bullets to the back of the head of a few extremely corrupt officials took care of corruption in China.

Companies operating in China would tell you that doing businesses in China is now relatively corruption free, so scared are government officials of being caught.

And the crackdown was supported by the population.

Point to note is this : This China government is pretty good at reading the mood of the people.

PS. At a point in time, the China government will probably decide that the Chinese people should not pay the sort of prices they are paying for foreign goods, including IF. So do you want to be exposed to a company with China as its single most important market?

[alokdhir]

What happened to SAN , Can it happen to ATM one day ??

[Balance]

What happened to SAN , Can it happen to ATM one day ??

Of course it could but at what price if it happened?

[alokdhir]

Of course it could but at what price if it happened?


Today if some strategic position taker makes an offer for 20% of equity @ $ 9 ....I think it will sail thru ...Chinese SOE can find that useful for future food security reasons etc

[dobby41]

I was in a meeting where representatives of several China companies were in NZ to pursue business opportunities many years ago.

To a question from one of our NZ exporters about politics (communism) in China and how that interacted with business (capitalist), I can recall vividly this comment from the head of the delegation : "Leave politics to the government and they will leave business alone."

Pre or post the current leader?
The Govt will leave business alone so long as it suits them.
Become too popular and things change.
There is plenty of recent evidence of that (Jack Ma and his scrapped listing (OK suspended - Ant group) being one).

To bring it back to ATM - so long as the Govt see an advantage, or at least no disadvantage, in having ATM in China they are OK. It could turn on a pin though.

[Master98]

morningstar not yet update their valuation since annual result, they must lost confidence in a2 milk, or could be themself.

[Master98]

morningstar not yet update their valuation since annual result, they must lost confidence in a2 milk, or could be themself.
"Don't Cry Over Spilt Milk Powder; a2 Milk Remains Attractively Priced Despite Inventory Writedowns" still keep NZ$10 target price.

[Balance]

Pre or post the current leader?
The Govt will leave business alone so long as it suits them.
Become too popular and things change.
There is plenty of recent evidence of that (Jack Ma and his scrapped listing (OK suspended - Ant group) being one).

To bring it back to ATM - so long as the Govt see an advantage, or at least no disadvantage, in having ATM in China they are OK. It could turn on a pin though.

Pre current leader.

[dobby41]

Pre current leader.

Things change when people change.

[dreamcatcher]

Australia vaccinations 70% mid Oct opening international 80% Nov

https://www.smh.com.au/national/nsw/impossible-to-eliminate-delta-premier-says-as-nsw-covid-cases-up-by-1116-20210901-p58nrr.html

UBS TP $11 previous $12

[mike2020]

I really don't think that is a valid reason. Year after year of Fonterra shareholder meetings. Buying Westland after crippling Fonterra who were incredibly naive, that made sense. Why in heavens name would you buy the middle man?

[alokdhir]

I really don't think that is a valid reason. Year after year of Fonterra shareholder meetings. Buying Westland after crippling Fonterra who were incredibly naive, that made sense. Why in heavens name would you buy the middle man?

ATM is not just marketer of premium milk products , it has supply contracts , cornerstone share holding in SML and fully own MVR and many other advantageous positions in different countries ...leaving alone its brand value and patents of A2 identification process .

So anyone in the industry who has demand side covered like Chinese SOE can be a keen player to either have cornerstone shareholding or outright majority holding

ATM problem is demand not supply ...if that player has demand then its good match

PS : Normally such deals make sense in such downturns of the company not in their heydays

Will be very surprised to see it drop below $ 5.50 for long

[mike2020]

It really sounds like a lot of hot air to me. The whole food security issue, that is well covered and ATM would be bottom of the list, SML maybe a bite of that but if you look at the multinationals operating in China and think about where ATM stands I can't see it as a target. MVMs share of current MC? 7% and that was from existing cash on hand or NTA.

[Waltzing]

hot air it might well be but the handle is down , again.

Movie re runs of the long march will be next......little red books and red caps...:D

[couta1]

"Don't Cry Over Spilt Milk Powder; a2 Milk Remains Attractively Priced Despite Inventory Writedowns" still keep NZ$10 target price.

Well yes Morningstar, enough said. 4 Traders updated avg target price from 7 analysts of $7.45 probably a lot more realistic at this point in time.

[Balance]

Well yes Morningstar, enough said. 4 Traders updated avg target price from 7 analysts of $7.45 probably a lot more realistic at this point in time.

Note that the target price follows the share price? Shouldn't it be the other way round?

[Ggcc]

Note that the target price follows the share price? Shouldn't it be the other way round?
I thought that is how most shares work lol

[Balance]

I thought that is how most shares work lol

Why it is important to look at the outliers - they are either going to be very right or very wrong.

[aperitif]

Thought you would have learnt by now to do your own assessment rather than rely on the '6 times downgrade' commentaries & explanations from ATM's discredited management?

Sp was $8.75 when you posted below on 28 March :

That statement has served me extremely well thanks.

The sad reality is this forum seems like the only thing you have in your life. You post 25 odd times a day across various threads because you are lonely and want your voice to be heard. When someone doesn’t “bite”, you head across to HC as “xmanrocks” and do the same thing. I feel sorry for your partner/family as they probably have no idea what you do in front of a computer screen all day to satisfy your addiction.

Goodbye

[Balance]

That statement has served me extremely well thanks.

The sad reality is this forum seems like the only thing you have in your life. You post 25 odd times a day across various threads because you are lonely and want your voice to be heard. When someone doesn’t “bite”, you head across to HC as “xmanrocks” and do the same thing. I feel sorry for your partner/family as they probably have no idea what you do in front of a computer screen all day to satisfy your addiction.

Goodbye

Oh dear.

You think I hurt his feelings by being blunt so that he avoids future mistakes? :scared:

Oh well, guess he is but one in a long line of novice investors learning the hard way. :D

[Getty]

That statement has served me extremely well thanks.

The sad reality is this forum seems like the only thing you have in your life. You post 25 odd times a day across various threads because you are lonely and want your voice to be heard. When someone doesn’t “bite”, you head across to HC as “xmanrocks” and do the same thing. I feel sorry for your partner/family as they probably have no idea what you do in front of a computer screen all day to satisfy your addiction.

Goodbye

Take counsel from all quarters.

If seasoned investors share opinion, be grateful.

[alokdhir]

That statement has served me extremely well thanks.

The sad reality is this forum seems like the only thing you have in your life. You post 25 odd times a day across various threads because you are lonely and want your voice to be heard. When someone doesn’t “bite”, you head across to HC as “xmanrocks” and do the same thing. I feel sorry for your partner/family as they probably have no idea what you do in front of a computer screen all day to satisfy your addiction.

Goodbye

Dont loose hope on ATM ...it has a outright chance of surprising u if u get lucky ...but prudence says Balance is right about its immediate prospects . Overall if u have some faith in the company management then it can be a good turnaround story in 1-2 years time and can end up doubling in SP from here a la FBU example .

Many sold FBU in disgust ...but some held on ...believers ...they got the rewards too .

But logic says if u have 3-9 months horizon with no appetite for paper capital loss then ATM is in firm downtrend ...its 400 MA is 13.52 ...its less then half of that ...which is extremes of bad news .

Many see that opportunity ....short term thinkers avoid such stocks

[Beagle]

People really should learn some basics about technical analysis. A breakdown through the 200 day moving average occurred at just on $18. Basic TA would have got people out at about 3 time's the current price and kept them out and avoided what for some people has been a life changing loss.

Getting in and out when it breaks up or down through the 200 day support line, (AKA following long term price momentum) has served investors extremely well with ATM over many many years.

This strategy would have locked in the lions share of the capital gains over the years and its well worth noting this valuable TA tool currently says to STAY OUT of investing in this company and do not even consider getting back in until a new clear uptrend is well and truly formed, (whenever that might be but extremely unlikely to be anytime in the near future).

I won't touch this with a barge pole until such time, (if this ever occurs), as there's a clear break up through the 200 day moving average.

[Beagle]

Take counsel from all quarters.

If seasoned investors share opinion, be grateful.

Well said.

[Master98]

Come on Hoop, give us some TA prospect.

[couta1]

People really should learn some basics about technical analysis. A breakdown through the 200 day moving average occurred at just on $18. Basic TA would have got people out at about 3 time's the current price and kept them out and avoided what for some people has been a life changing loss.

Getting in and out when it breaks up or down through the 200 day support line, (AKA following long term price momentum) has served investors extremely well with ATM over many many years.

This strategy would have locked in the lions share of the capital gains over the years and its well worth noting this valuable TA tool currently says to STAY OUT of investing in this company and do not even consider getting back in until a new clear uptrend is well and truly formed, (whenever that might be but extremely unlikely to be anytime in the near future).

I won't touch this with a barge pole until such time, (if this ever occurs), as there's a clear break up through the 200 day moving average. Unfortunately for people like myself with life changing losses its just not that simple as getting out at some random moving average when a stock has been your lifestyle for 7 yrs prior to that, to unpack my story in full would fill multiple pages on this thread and even then I doubt many would understand, my chain of events started when Covid arrived and long before A2 had its fall from grace, A2 become a part of that chain later on.

[aperitif]

Unfortunately for people like myself with life changing losses its just not that simple as getting out at some random moving average when a stock has been your lifestyle for 7 yrs prior to that, to unpack my story in full would fill multiple pages on this thread and even then I doubt many would understand, my chain of events started when Covid arrived and long before A2 had its fall from grace, A2 become a part of that chain later on.

What price did you sell out of Xero and why?

[couta1]

What price did you sell out of Xero and why? I got out of Xero at $22 after averaging down a $40 holding, I had traded it prior to that and overall made from it. Got out because I couldn't see it returning to it's previous highs at the time, of course that was wrong in hindsight plus it wasn't a high conviction stock for me unlike A2.

[alokdhir]

I am not a big fan of TA alone ...but with understanding of a stock and its business it works well mostly . I was told FPH is in big downtrend when it broke its 200 MA many times ....but its not ...Its better to work with 400 SMA and 400 EMA then just 200 SMA and 100 SMA ...also only as a guide not as tell all . Need understand where the business is and its future prospects ie Fundamentals also . FPH had head and shoulders pattern at $ 27 ...shown to me on this forum ...it got negated as its fundamentally a strong stock

So need judge ATM on its business merits combined with TA help

[couta1]

I am not a big fan of TA alone ...but with understanding of a stock and its business it works well mostly . I was told FPH is in big downtrend when it broke its 200 MA many times ....but its not ...Its better to work with 400 SMA and 400 EMA then just 200 SMA and 100 SMA ...also only as a guide not as tell all . Need understand where the business is and its future prospects ie Fundamentals also . FPH had head and shoulders pattern at $ 27 ...shown to me on this forum ...it got negated as its fundamentally a strong stock

So need judge ATM on its business merits combined with TA help FPH is my new A2 currently, I understand it intimately and see it as being in the right place at the right time. A2 may very well have its time in the sun again but now is not that time.

[dobby41]

People really should learn some basics about technical analysis. A breakdown through the 200 day moving average occurred at just on $18. Basic TA would have got people out at about 3 time's the current price and kept them out and avoided what for some people has been a life changing loss.

Getting in and out when it breaks up or down through the 200 day support line, (AKA following long term price momentum) has served investors extremely well with ATM over many many years.

A quick question if I may - without derailing the thread.
If the 200 day MA was say $18 and the price hit $17.90 today then bounced back to $18.05 tomorrow is that a trigger?
I suppose the question I am asking is how solid below the MA should the share price be or stay for a trigger?

[alokdhir]

FPH is my new A2 currently, I understand it intimately and see it as being in the right place at the right time. A2 may very well have its time in the sun again but now is not that time.

I agree with u fully and surprisingly FPH is my biggest over weight long term holding at the moment with 29% weightage as I reduced 4% of MFT to add to FPH ...I am getting ready over the next 2-3 years to reap the rewards .

IMHO FPH will help us recoup all your ATM looses in a safe way ...as its the safest of the bluechip of NZX

PS : ATM at present is only good bet from merger and acquisition point of view ...as usually those people like VCs have longer term on horizon

[couta1]

I agree with u fully and surprisingly FPH is my biggest over weight long term holding at the moment with 29% weightage as I reduced 4% of MFT to add to FPH ...I am getting ready over the next 2-3 years to reap the rewards .

IMHO FPH will help us recoup all your ATM looses in a safe way ...as its the safest of the bluechip of NZX FPH makes up 45% of my portfolio currently as does PAZ so I'm still going big or going home. Lol

[alokdhir]

FPH makes up 45% of my portfolio currently as does PAZ so I'm still going big or going home. Lol

I dont know about PAZ but FPH wont let u go Home ...IMHO ...Surely I am seeing good prospects there .

But ATM is our thread ....so get on with it .

[Sideshow Bob]

a2 Milk Company slump: Firm banks on offline and local e-commerce retail to recoup CBEC losses in China (https://www.nutraingredients-asia.com/Article/2021/09/01/a2-Milk-Company-slump-Firm-banks-on-offline-and-local-e-commerce-retail-to-recoup-CBEC-losses-in-China?utm_source=copyright&utm_medium=OnSite&utm_campaign=copyright)

01-Sep-2021 By Tingmin Koe
The a2 Milk Company is banking on offline and local e-commerce retail in China to make up for its losses in daigou and cross-border e-commerce due to COVID-19, after seeing overall revenues slump by 30 per cent and profits by 79 per cent.
HTTPS://WWW.NUTRAINGREDIENTS-ASIA.COM/ARTICLE/2021/09/01/A2-MILK-COMPANY-SLUMP-FIRM-BANKS-ON-OFFLINE-AND-LOCAL-E-COMMERCE-RETAIL-TO-RECOUP-CBEC-LOSSES-IN-CHINA (https://www.nutraingredients-asia.com/Article/2021/09/01/a2-Milk-Company-slump-Firm-banks-on-offline-and-local-e-commerce-retail-to-recoup-CBEC-losses-in-China?utm_source=copyright&utm_medium=OnSite&utm_campaign=copyright)
a2 Milk Company slump: Firm banks on offline and local e-commerce retail to recoup CBEC losses in China (https://www.nutraingredients-asia.com/Article/2021/09/01/a2-Milk-Company-slump-Firm-banks-on-offline-and-local-e-commerce-retail-to-recoup-CBEC-losses-in-China?utm_source=copyright&utm_medium=OnSite&utm_campaign=copyright)

[RGR367]

Based on my sell transactions today, I think FOMO is what keeping ATM high at the moment.

To somehow keep and materialize some paper profits on this stock, I reluctantly sold a bundle (<20K shares) today. It would normally take a single or at most 2 buy transactions to complete my trade but this one took more than 40 sold transactions to complete, with as low as 4 shares in a transaction and the highest transaction just over 2k shares.
I will think twice now in selling more with today's observation.


disc: I was willing of letting this stock play to its lowest point if only Couta had not surrendered his conviction of holding on :( Paper profit is OPM and one should be willing to let it evaporate if properly convicted to the stock.

[couta1]

Based on my sell transactions today, I think FOMO is what keeping ATM high at the moment.

To somehow keep and materialize some paper profits on this stock, I reluctantly sold a bundle (<20K shares) today. It would normally take a single or at most 2 buy transactions to complete my trade but this one took more than 40 sold transactions to complete, with as low as 4 shares in a transaction and the highest transaction just over 2k shares.
I will think twice now in selling more with today's observation.


disc: I was willing of letting this stock play to its lowest point if only Couta had not surrendered his conviction of holding on :( Paper profit is OPM and one should be willing to let it evaporate if properly convicted to the stock. Lol I let it evaporate alright until it had become a cataclysmic meltdown of the highest order equal to a polar cap melting.

[aperitif]

https://markets.businessinsider.com/news/stocks/this-centurys-best-performing-us-stock-sells-energy-drinks-not-iphones-2019-4-1028114374

12916

[Ferg]

Something I take issue with is the criticism of the systems (not) used to track inventory in the daigou channel. Once a business has sold something, especially FMCG, it is extremely rare to track the movements of that inventory within a third party organisation. The level to which some posters here expect ATM to track inventory would necessitate installing something like a GPS tracker onto every can. Dramatic example aside, the level of inventory tracking expected by some here is beyond reasonable and, at the risk of being blunt, naïve to actual business practices.

Sellers of FMCGs into wholesalers should (must!) have a close relationship with them. This would give a general sense of the age of the stock, checking the wholesaler is not over or under ordering, the product is fairly positioned/promoted and ensuring older stock is sold first etc. That is dependant on reps servicing such clients. But those function are not, and cannot be, done using any sort of ERP system, unless there is some sort of integration between systems of the two businesses. Such a goal would remove a % of the role of the rep but carries the risk of unintended consequences and a soul-less business relationship. Automation of ordering was the goal many years ago but, in my experience, is still a pipe dream for many organisations. If it were done it is expensive to implement but I can honestly say there is not a huge appetite for such closely integrated systems. Businesses generally like their independence and lack of transparency to others.

That said, there were issues with the amount of stock in the daigou channel and we all know why that happened. The closure of the borders impacted daigou trade resulting in an over-stock situation within that channel. Their sales obviously collapsed and they were left carrying excess inventory. That inventory is now classified as excess, but it wasn't at the time it was ordered. No ERP system would have prevented that from happening.

The positive from this is that COVID has highlighted a blind spot for ATM, and I fully expect they will do what they can to a) remedy the situation and b) come out of this a better business.

I would happily stand corrected if someone has any facts on actual inventory tracking at ATM within wholesalers/daigou, as opposed to conjecture and supposition. I freely admit I do not know the extent of the relationship between ATM and wholesalers/daigous; I can only share what I have seen at other FMCG companies.

[Joshuatree]

Great thought.A2 Energy drink "It gives you Fins"," Have a shot of a2xtra milky way,it brings stars to your eyes"
Feed a2 cows with coffee grinds ,hey presto Bovine caffeine dairy queen's,udder is best ,it gives you a zing.:D

[dreamcatcher]

Something I take issue with is the criticism of the systems (not) used to track inventory in the daigou channel. Once a business has sold something, especially FMCG, it is extremely rare to track the movements of that inventory within a third party organisation. The level to which some posters here expect ATM to track inventory would necessitate installing something like a GPS tracker onto every can. Dramatic example aside, the level of inventory tracking expected by some here is beyond reasonable and, at the risk of being blunt, naïve to actual business practices.

Sellers of FMCGs into wholesalers should (must!) have a close relationship with them. This would give a general sense of the age of the stock, checking the wholesaler is not over or under ordering, the product is fairly positioned/promoted and ensuring older stock is sold first etc. That is dependant on reps servicing such clients. But those function are not, and cannot be, done using any sort of ERP system, unless there is some sort of integration between systems of the two businesses. Such a goal would remove a % of the role of the rep but carries the risk of unintended consequences and a soul-less business relationship. Automation of ordering was the goal many years ago but, in my experience, is still a pipe dream for many organisations. If it were done it is expensive to implement but I can honestly say there is not a huge appetite for such closely integrated systems. Businesses generally like their independence and lack of transparency to others.

That said, there were issues with the amount of stock in the daigou channel and we all know why that happened. The closure of the borders impacted daigou trade resulting in an over-stock situation within that channel. Their sales obviously collapsed and they were left carrying excess inventory. That inventory is now classified as excess, but it wasn't at the time it was ordered. No ERP system would have prevented that from happening.

The positive from this is that COVID has highlighted a blind spot for ATM, and I fully expect they will do what they can to a) remedy the situation and b) come out of this a better business.

I would happily stand corrected if someone has any facts on actual inventory tracking at ATM within wholesalers/daigou, as opposed to conjecture and supposition. I freely admit I do not know the extent of the relationship between ATM and wholesalers/daigous; I can only share what I have seen at other FMCG companies.

My thoughts exactly regarding inventory which imo was built up to supply demand especially for China's shopping extravaganzas (618 11/11 12/12 Luna) because they always ran out of stock. Covid was unfortunate which no country or business could ever safe guard against and nobody expected Covid to still be affecting the world.

The good news is world population is vaccinating like crazy because of Delta with some countries reaching that 70% - 80% in Oct/Dec when borders could be opening.

You have highlighted some good points Ferg.............

[Cottagestyles]

FPH makes up 45% of my portfolio currently as does PAZ so I'm still going big or going home. Lol

Love it, go big Couta! On the NZX side of things am doing the same with FPH and WHS, they're what I'm hoping will do my long term heavy lifting while I play with GXH and DGC :) Nothing has been so freeing as shedding the last of my ATM holding. It hurt a bit but sleeping happy now.

[see weed]

Love it, go big Couta! On the NZX side of things am doing the same with FPH and WHS, they're what I'm hoping will do my long term heavy lifting while I play with GXH and DGC :) Nothing has been so freeing as shedding the last of my ATM holding. It hurt a bit but sleeping happy now.
Sold my last lot today. This is the second time this year of having no a2 shares. It was only about 12 months ago that a2 was 100% of my portfolio, but only for a couple of weeks, that was a bit scary. A2 dragged my portfolio down 6 figures but am still in the green and not too worried, should get it back sooner or later:).

[Beagle]

A quick question if I may - without derailing the thread.
If the 200 day MA was say $18 and the price hit $17.90 today then bounced back to $18.05 tomorrow is that a trigger?
I suppose the question I am asking is how solid below the MA should the share price be or stay for a trigger?
Great question, thanks for asking. I normally look for a confirmed 3 day breakdown or break up through a moving average. Others will use a shorter period but as you suggest this can sometimes lead to getting whipsawed. Sometimes I act quicker based on good old fashioned instinct honed over nearly 40 years of sniffing the breeze for what's coming next.


FPH makes up 45% of my portfolio currently as does PAZ so I'm still going big or going home. Lol

You can lead a horse to water...

[dobby41]

Great question, thanks for asking. I normally look for a confirmed 3 day breakdown or break up through a moving average. Others will use a shorter period but as you suggest this can sometimes lead to getting whipsawed. Sometimes I act quicker based on good old fashioned instinct honed over nearly 40 years of sniffing the breeze for what's coming next.



Thanks for the answer - I didn't think 1 day really cut it unless, as you say, there is more supporting 'instinct'.

[winner69]

https://markets.businessinsider.com/news/stocks/this-centurys-best-performing-us-stock-sells-energy-drinks-not-iphones-2019-4-1028114374

12916

Does that chart show Monsters share price has been over 3600 days below it’s all time high ….which is about now.

Seems rather meaningless …but a pretty chart

[Master98]

"The fifth most traded share last week on CommSec was this struggling infant formula company. And although over two-thirds of the volume came from the buy side, it couldn’t stop the A2 Milk share price from sinking 10% over the period. This followed the release of a disappointing full year result and expectations for another tough year in FY 2022."

[Balance]

"The fifth most traded share last week on CommSec was this struggling infant formula company. And although over two-thirds of the volume came from the buy side, it couldn’t stop the A2 Milk share price from sinking 10% over the period. This followed the release of a disappointing full year result and expectations for another tough year in FY 2022."

One of the most shorted stocks on the ASX - not hard to figure out where the buying was coming from.

Then there’s the retail punters who look at the $20+ sp a year+ ago & think the stock is very cheap.

Great trading stock!

[Master98]

One of the most shorted stocks on the ASX - not hard to figure out where the buying was coming from.
I assuming one or two big boys push sp lower to accumulating more to average down their cost like The Vanguard Group.

[Balance]

I assuming one or two big boys push sp lower to accumulating more to average down their cost like The Vanguard Group.

Possible but traders playing on the short side have been the big winners with A2M in the last year.

Before then, the big winners played on the long side.

[Joshuatree]

One of the most shorted stocks on the ASX - not hard to figure out where the buying was coming from.

Then there’s the retail punters who look at the $20+ sp a year+ ago & think the stock is very cheap.

Great trading stock!

Spot on,novice rear view "investors" take note ,you don't have to learn from that experience, bypass it.

[Timesurfer]

Shorters might be in luck. ATM about to be removed from the S&P ASX 50 index .. and SM1 from the 300 index.

[couta1]

Shorters might be in luck. ATM about to be removed from the S&P ASX 50 index .. and SM1 from the 300 index. For once i dont give a s*** about what the shorters do to this stock or dread any piece of news concerning China.

[Balance]

Shorters might be in luck. ATM about to be removed from the S&P ASX 50 index .. and SM1 from the 300 index.

Ouch!

That could be at least A$1.00 off the sp alone!

[Master98]

Ouch!

That could be at least A$1.00 off the sp alone!
from Wikipedia dated on 28/05/21,a2m already out of asx50.

[couta1]

from Wikipedia dated on 28/05/21,a2m already out of asx50. No it hasn't been removed to date.

[Baa_Baa]

from Wikipedia dated on 28/05/21,a2m already out of asx50.

Incorrect.

A2M will be removed from the "S&P/ASX 50 Index (https://www2.asx.com.au/markets/trade-our-cash-market/announcements.a2m) – Effective Prior to the Open on September 20, 2021"

[Balance]

Incorrect.

A2M will be removed from the "S&P/ASX 50 Index (https://www2.asx.com.au/markets/trade-our-cash-market/announcements.a2m) – Effective Prior to the Open on September 20, 2021"

Shorters will be out in force on Monday?

Maybe an opportunity on NZX for exit before ASX opens.

[Master98]

https://www.nzx.com/announcements/378565
ATM still in nzx10.

[alokdhir]

Shorters will be out in force on Monday?

Maybe an opportunity on NZX for exit before ASX opens.

Pretty sure u will be covering your shorts tomorrow ...locking it profits from 7.25 to whatever it reaches on Monday ...:t_up:

[Balance]

Pretty sure u will be covering your shorts tomorrow ...locking it profits from 7.25 to whatever it reaches on Monday ...:t_up:

I don’t do shorts. Period.

[alokdhir]

When will the takeover news come out again ....maybe after all shorts are in for the index exclusion selling ....Just thinking aloud .

They will try to take full advantage of the SP at the lowest price possible ...so will keep waiting till its most suitable .

Provided there is someone actually looking to gobble up ATM ...maybe they just need $ 2B to take control of $ 1.5B revenue and $ 250 mil profits with 874 Mil in Cash plus share stake in SML + MVR + Brand Value

So who actually can see some visibility of demand or already has demand side covered ...it may make good business sense to do it ...ATM has supply side covered very well .

IMHO it is distinct possibility with ATM . Hold very small lot to participate in this scenario . So will be looking to buy some around $ 5.50 if Monday provides that opportunity . Hold for 3-6 months ...maybe get lucky :D

[bull....]

a2 removed from index

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ATM/378587/354038.pdf

probably mean more selling

[winner69]

a2 removed from index

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ATM/378587/354038.pdf

probably mean more selling

Seems appropriate A2 replaced by another gambling company in that NZX

'Investing' in A2 is akin to a visit to the TAB

[bull....]

Seems appropriate A2 replaced by another gambling company in that NZX

'Investing' in A2 is akin to a visit to the TAB

bubs and synliat removed as well , milk not flavour of the year according to the market

[flyinglizard]

omg, the whole milk sector gone. This is big!

[Balance]

omg, the whole milk sector gone. This is big!

Once were favourites …

[alokdhir]

FBU was also excluded ....used to be No 1 company for long long time ....

[Balance]

FBU was also excluded ....used to be No 1 company for long long time ....

Where? FBU was kicked out a while ago and deservedly so.

[alokdhir]

Where? FBU was kicked out a while ago and deservedly so.

I was referring to old times only for sake of comparison . Means all the companies going thru bad patch get excluded ...and if they turnaround then they come back .

So no big deal ATM getting excluded ...All know they going thru bad times .

Will this lead to big selling ...maybe not ...just a knee jerk reaction for few days then back to same grind

[Balance]

I was referring to old times only for sake of comparison . Means all the companies going thru bad patch get excluded ...and if they turnaround then they come back .

So no big deal ATM getting excluded ...All know they going thru bad times .

Will this lead to big selling ...maybe not ...just a knee jerk reaction for few days then back to same grind

A2M was added to index on 22 June 2020, announcement made on 11 June 2020.

You can work out for yourself whether or not the inclusion had a positive price effect and what kind of volume was done.

There will be many millions of shares to be disposed off imo as we move towards 20 September.

A2M must go down as one of the shortest stay stocks on the S&P/ASX 50 index!

As for FBU, you are indeed right - has proven to be a great investment stock in the last 2 years!

[alokdhir]

A2M was added to the 22 June 2020, announcement made on 11 June 2020.

You can work out fir yourself whether or not the inclusion had a positive price effect and what kind of volume was done.

There will be many millions of shares to be disposed off imo as we move towards 20 September.

A2M must go down as one of the shortest stay stocks on the S&P/ASX 50 index!

As for FBU, you are indeed right - has proven to be a great investment stock in the last 2 years!

The date 22nd June 2020 shows clearly that inclusion and exclusion is a lagging indicator of company performance . So it should be taken with that in mind . It got included near its top and most likely getting excluded near its bottom ...IMO

Yes index funds will have to follow ....like they had to buy MEL at $ 9.90 against a valuation of $ 5 ....U know what happened after that

[dreamcatcher]

I recall a2 entering index funds rumored as needing 50m before close.

In fact SP didn't move as those clever funds already purchased.

[alokdhir]

I recall a2 entering index funds rumored as needing 50m before close.

In fact SP didn't move as those clever funds already purchased.

Here they have time till 20th Sept to sell all ATM ....Now also most likely nothing much will happen .

But I am hoping it happens ...5.50 is more interesting then 5.90 :D

[alokdhir]

I surely was expecting a stronger reaction from aussy punters ...Maybe still time .

Or they loosing conviction to sell ATM anymore ...Valuation fear or strategic sale fear ??

Something surely is cooking ...Be warned ...lol

[dreamcatcher]

I surely was expecting a stronger reaction from aussy punters ...Maybe still time .

Or they loosing conviction to sell ATM anymore ...Valuation fear or strategic sale fear ??

Something surely is cooking ...Be warned ...lol

Funds already moved shares now probably waiting on 47m shorts to close out as any further SP downside currently below every Brokers Valuations.

Tree-shaking no longer works as insto's own majority of a2

[Rawz]

First heard about this 'tree shaking' back around $16-$18 range. Those darn insto's been shaking all the way down to below $6.. they shaking themselves silly

[Getty]

https://youtu.be/l3fZuW-aJsg

[McPussPuss]

Shorts have been increasing again post the result announcement. They were covering going in the the announcement.

[couta1]

First heard about this 'tree shaking' back around $16-$18 range. Those darn insto's been shaking all the way down to below $6.. they shaking themselves silly And some of them have been shaken into serious losses. Lol

[Balance]

And some of them have been shaken into serious losses. Lol

You mean the tree shakers were hit with ever ‘cheaper’ ATM stock?

As Elvis would sing : “All shook up!”

https://youtube.com/watch?v=F0NfOAOa_bA&feature=share

[alokdhir]

Shorts have been increasing again post the result announcement. They were covering going in the the announcement.

Seems like 75% of the selling is shorts only . Shorting at these levels can have serious consequences for their financial health ...lol :p

[aperitif]

12930

Taobao Data(C2C) for August….

PM me for whole report

[Leemsip]

Wonder if the instos are shorting their own holdings, rather than embark on a massive selling binge and to ride out the exclusion from the index... I think a lot of short holdings are like this, tangled ownership, short/long positions in the same hands make it hard to figure out whats really going on.

[dreamcatcher]

Wonder if the instos are shorting their own holdings, rather than embark on a massive selling binge and to ride out the exclusion from the index... I think a lot of short holdings are like this, tangled ownership, short/long positions in the same hands make it hard to figure out whats really going on.

Morning Brief - "A2 Milk dropped 0.8% to $5.93 after it was removed from the ASX 50. Gordon said the exclusion was NOT ITSELF MATERIAL, as most funds track the ASX 200, but was a negative for investor sentiment"

SP currently below most Broker Valuations and the world on edge to opening borders when 80% vaccinations reached.... suspect tide would boost all boats.

[aperitif]

Tmall(B2C) sales starting to uptick again with the 99 festival and upcoming 11/11.

a2 platinum Stage 3 x 2 cans ranking 6th , Stage 3 x 6 cans ranking 7th across all IF brands/products. Pretty amazing considering products ranked 1st-5th are all individual cans.

I sold 5% of my XRO holding to buy some more today ahhhh

PM me for screenshots

[Master98]

Tmall(B2C) sales starting to uptick again with the 99 festival and upcoming 11/11.

a2 platinum Stage 3 x 2 cans ranking 6th , Stage 3 x 6 cans ranking 7th across all IF brands/products. Pretty amazing considering products ranked 1st-5th are all individual cans.

I sold 5% of my XRO holding to buy some more today ahhhh

PM me for screenshots
funds mangers are very happy to unload more to you before 20th September.

[couta1]

What, A2 drops 3% to a 4 wk low and drops off the 1st page on ST, whats the world coming to? Thought I'd better fix that.

[carrom74]

What, A2 drops 3% to a 4 wk low and drops off the 1st page on ST, whats the world coming to? Thought I'd better fix that.

The most watched in jan 2021 to the least favoured in Sept 2021… oh boy!

[Balance]

The most watched in jan 2021 to the least favoured in Sept 2021… oh boy!

Who wants to relive a nightmare of 6 earnings downgrade & an incinerated share price?

[Waltzing]

well balance it could just be retesting lows? and then onwards and back up? :ohmy:

[couta1]

Who wants to relive a nightmare of 6 earnings downgrade & an incinerated share price? After a year from Hades and one i wouldn't wish on my worst enemy, that would be a massive NO. The big question is, what does the next year look like for A2? I have no idea and have no intention of finding out as a shareholder in the foreseeable future.

[nztx]

well balance it could just be retesting lows? and then onwards and back up? :ohmy:


or downwards to test the next lower level ?

that's what the increased levels of shorting is maybe suggesting ;)

[davflaws]

What, A2 drops 3% to a 4 wk low and drops off the 1st page on ST, whats the world coming to? Thought I'd better fix that.

If only all ATMs problems were so easily fixed

[alokdhir]

I still think ATM is close to bottom ...howsoever difficult it may seem at the moment .

Stocks bottom out about 6-9 months before business does ...and most signs are ATM business is close to stabilising ...at least knowing what problems they have and talking about it is half job already done !

Also SKT example ...when SP starts languishing out of utter disdain of investors ...it leads to Vultures looking for easy meat .

Only two stocks were on buy list of Morningstar on NZX ATM and SKT ....SKT already openly pursued ...so will be ATM ...IMHO

[Balance]

I still think ATM is close to bottom ...howsoever difficult it may seem at the moment .

Stocks bottom out about 6-9 months before business does ...and most signs are ATM business is close to stabilising ...at least knowing what problems they have and talking about it is half job already done !

Also SKT example ...when SP starts languishing out of utter disdain of investors ...it leads to Vultures looking for easy meat .

Only two stocks were on buy list of Morningstar on NZX ATM and SKT ....SKT already openly pursued ...so will be ATM ...IMHO

SKT problems unfolded over several years. ATM’s problems are only starting imo.

[alokdhir]

SKT problems unfolded over several years. ATM’s problems are only starting imo.

Agree with u there ...But ATM was a different class of Company ...only was comparing regarding both being in Buy list of Morningstar . One expect company like ATM or old times FBU to get their act together or surmount their difficulties much faster then SKT type company which got taken in by Technology change issues and they being too cocky about it .

[Balance]

Agree with u there ...But ATM was a different class of Company ...only was comparing regarding both being in Buy list of Morningstar . One expect company like ATM or old times FBU to get their act together or surmount their difficulties much faster then SKT type company which got taken in by Technology change issues and they being too cocky about it .

Punters (especially retail) are still mesmerised by the $20+ sp of just over a year ago, thinking that the current sp is ‘cheap’.

Fact is that ATM’s sp of $20+ priced in perfection - perfect market, perfect product, perfect strategy and perfect execution.

It took Covid to blow that perception right out the window - to the extent that we saw management downgrading earnings 6 times! Those who have been in the market long enough know that a company is in total disarray when it has no handle on what’s happening with its operations at a ground level.

Shows a complacent board and complacent management, grown fat and lazy on easy gains - production driven focus.

Remember how Jayne was fired for trying to shift the strategic focus to sales & marketing?

To DB’s credit, he has laid out the problems facing ATM - but mostly on a macro front. He has not really laid out the problems at a micro level - changing the guard alone is but 25% of the solution.

Not doing a share buyback to me is the best indication of just how serious and deep the problems are.

So no quick fixes and the current sp still builds in very high expectations of success. As if!

[Akane]

As of right now, ATM is still sitting on their hands, and still don't have a plan on how to pivot.
We're seeing butchers and bakeries doing contactless deliveries in L4 lockdown, advertising on Facebook pages because everyone will be bored at home and crave a nice steak and a pie, they learn that they need to do something about it and not just sit there and claim wage subsidy, that's pivoting.

ATM CEO / BoD right now: "Uhhh yeah we gon get rekt... oh well.... let's ride this bike to the ground and move on to the next gig........"

[Balance]

As of right now, ATM is still sitting on their hands, and still don't have a plan on how to pivot.
We're seeing butchers and bakeries doing contactless deliveries in L4 lockdown, advertising on Facebook pages because everyone will be bored at home and crave a nice steak and a pie, they learn that they need to do something about it and not just sit there and claim wage subsidy, that's pivoting.

ATM CEO / BoD right now: "Uhhh yeah we gon get rekt... oh well.... let's ride this bike to the ground and move on to the next gig........"

Let’s be fair to DB.

He was appointed when everything was going ‘swimmingly’ well for ATM according to the directors and outgoing CEO, Babbage at that time.

When he came on board in Feb this year, things have gone pear shaped in ATM and he could not hand in his worse nightmare, imagine walking into such a mess for a multi billion dollar company.

To his credit, he has not jumped in promising quick solutions and turnaround.

So let’s give him the time to October to come up with the strategy reset.

[alokdhir]

I still think U r being too pessimistic ....if a company of equal status like FBU was trading at 30% of its recent market peak while making two consecutive years of losses and didn't seem they getting out of it then I think SP of 5.50 which is 30% of its peak with still having positive earnings inspite of huge stock write downs . FBU was not a big growth story but a safe story with big dividend . ATM was priced at $ 20 as a big growth story ...now with safe story with positive eps and decent products it can be soon $ 10 as valued by Morningstar .

Rest all know perceptions make the current SP but realities make the long term stories . So its more of wait and watch . Though I am not brave enough to act on it as I really have very low regard for ATM management's capabilities and integrity and their investor unfriendliness but I am very easily feeling that this ship will be more close to $ 10 then $ 5 in next 6-12 months

[flyinglizard]

If the Oct strategy reviews will not show any convincing turnaround spots, then ATM faces big trouble. It cannot mark itself as a growth company anymore. The Forward PE between ($5.75 / 0.1 = ) 55.7 and ($5.75 / 0.19 = ) 30.26 too high!

SML current PE = 10.66, Fonterra current PE = 9.52, ATM current PE = 52.93, according todays' NZX.

Let's assume that ATM current PE match up with other peers in the industry today, SP should be (current PE 10 X Earnings 0.109 = $1.09 ) but this number is ridiculous, then you gives it some premium, double the price, then $1.09 x 2 =$ 2.18, if triple, then $1.09 x 3 = $ 3.27. I personally think $3.27 would be reasonable.

Any particular reason to believe why ATM has this sky-high current PE? growth for next year? Prob not. They are trying to stabilize the plummeting sales.

DO YOUR OWN CALCULATION, then make decision.

real takeover at this price of $5.75 today? with sky-high PE and PB? prob not, rumour is rumour. I am scared of if big boys dump their inventory when the rumour visits again and SP back to $6.

[Sideshow Bob]

SML current PE = 10.66, Fonterra current PE = 9.52, ATM current PE = 52.93, according todays' NZX.

DO YOUR OWN CALCULATION, then make decision.


SML originally indicated the 2021 FY will be half of the 2020 FY, but downgraded this a couple of times, and latest guidance is for a $20-$30m loss after tax for 2021. So if markets are forward looking, then much more relevant to SML, as otherwise seems like a bargain based on (trailing) PE.

Synlait FY21 guidance update - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/372628)

[flyinglizard]

SML originally indicated the 2021 FY will be half of the 2020 FY, but downgraded this a couple of times, and latest guidance is for a $20-$30m loss after tax for 2021. So if markets are forward looking, then much more relevant to SML, as otherwise seems like a bargain based on (trailing) PE.

Synlait FY21 guidance update - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/372628)

Sorry, I have not done any research on SML and Fonterra, so just use the current quoted PE from NZX website.....

It seems the whole industry into a big hole. That is why all been kicked out from ASX100 or ASX50......

[Sideshow Bob]

Sorry, I have not done any research on SML and Fonterra, so just use the current quoted PE from NZX website.....

It seems the whole industry into a big hole. That is why all been kicked out from ASX100 or ASX50......

At the same time farmgate prices are strong, and payout forecast to be around $8.00/Kg, which would be the highest for about 7 years.

While not an SML thread, many would see their issues largely of their own making. Probably same could be said for Fonterra and all their overseas endeavours and their capital structure.

Higher milk price is seen as a negative for A2, as squeezes their margins (but also increases competitors raw material price also).

[flyinglizard]

At the same time farmgate prices are strong, and payout forecast to be around $8.00/Kg, which would be the highest for about 7 years.

While not an SML thread, many would see their issues largely of their own making. Probably same could be said for Fonterra and all their overseas endeavours and their capital structure.

Higher milk price is seen as a negative for A2, as squeezes their margins (but also increases competitors raw material price also).

Yeah, shipping cost still increasing and no sign of slow down. another min. wage shift up? maybe interest rate go up very quickly, although A2 has not impacted too much. However, its suppliers, farmers will be hit. The only way is to shift all costs to A2. Aluminum price nearly doubled since May, the IF tins are made of Aluminum? Hopefully they have hedge system or forward contract with suppliers. There is a mixed scenario for A2 next financial year. The board is trying to stabilize the sales, but the cost is another issue. They already cut marketing expense, admin expense, not much room for FY22. If as they said that new products kicked in, that means new production lines, more R&D expense. Not sure the distribution cost. I am very curious about the marginal cost of all analysts used for next year. It is not like A2 says in the conference call, 47%-48%. A bit lower.

[see weed]

I still think U r being too pessimistic ....if a company of equal status like FBU was trading at 30% of its recent market peak while making two consecutive years of losses and didn't seem they getting out of it then I think SP of 5.50 which is 30% of its peak with still having positive earnings inspite of huge stock write downs . FBU was not a big growth story but a safe story with big dividend . ATM was priced at $ 20 as a big growth story ...now with safe story with positive eps and decent products it can be soon $ 10 as valued by Morningstar .

Rest all know perceptions make the current SP but realities make the long term stories . So its more of wait and watch . Though I am not brave enough to act on it as I really have very low regard for ATM management's capabilities and integrity and their investor unfriendliness but I am very easily feeling that this ship will be more close to $ 10 then $ 5 in next 6-12 months
If a takeover offer for ATM comes in at $4 then Morningstar would drop their $10 valuation down to $4 as they have done recently with ZEL with a valuation of over $5 down to the Ampol offer of $3.78c.

[alokdhir]

If a takeover offer for ATM comes in at $4 then Morningstar would drop their $10 valuation down to $4 as they have done recently with ZEL with a valuation of over $5 down to the Ampol offer of $3.78c.

Yes ..very possible thats why not many believe in their other valuations too like FPH @ 24.50 etc . But at $ 4B valuation ATM EV maybe becoming attractive with some freebies like cash , SML stake , MVG and brand value thrown in ...what say u if u have few billions to spare and know the chinese business or should I say have the right contacts there ...lol

[Waltzing]

Bass came on CNBC calling it the MAO risk. At any time bonds in that market can and will be defaulted at a moments notice. Even if this stock recovers the risk premium in the china market just mean going over weight when you can invest in the NZX, the ASX or even Europe adds ever increasing risk in your portfolios.

[alokdhir]

Bass came on CNBC calling it the MAO risk. At any time bonds in that market can and will be defaulted at a moments notice. Even if this stock recovers the risk premium in the china market just mean going over weight when you can invest in the NZX, the ASX or even Europe adds ever increasing risk in your portfolios.

If u see it from another angle what u saying ...then not many will be ready to do correct business with them as risk of default on payments etc will be built into prices . All the more reason they have their own controlled supplies in many parts of the world so food security is maintained at all times

[Waltzing]

"own controlled supplies"

absolutely true as basically China is entering a new stage of the cultural revolution and they may find there current trade policy backfires.

This australian situation clearly shows that China is no longer just thinking trade. Its thinking gun boat diplomacy and trade war. The trade policy is being set by political objectives not Hanseatic League commercial trade objectives.

[alokdhir]

"own controlled supplies"

absolutely true as basically China is entering a new stage of the cultural revolution and they may find there current trade policy backfires.

This australian situation clearly shows that China is no longer just thinking trade. Its thinking gun boat diplomacy and trade war. The trade policy is being set by political objectives not Hanseatic League commercial trade objectives.

So true ...they could do that ie change their tune as now they have critical mass of world trade on their side ...so what they did to Australia didn't have much impact on their business with others including cousin NZ as their business too big and important to scarifies over such superficial bonds .

[Balance]

So true ...they could do that ie change their tune as now they have critical mass of world trade on their side ...so what they did to Australia didn't have much impact on their business with others including cousin NZ as their business too big and important to scarifies over such superficial bonds .

Australia acts as the lapdog of US and decided to pull the dragon’s tail. Where is the backup from the US now that Australia is feeling the hot breath of the dragon?

Dumb geopolitics by Australia - so dumb only a drongo would play that game!

[alokdhir]

Australia acts as the lapdog of US and decided to pull the dragon’s tail. Where is the backup from the US now that Australia is feeling the hot breath of the dragon?

Dumb geopolitics by Australia - so dumb only a drongo would play that game!

The importance of their business to the countries is doing the job for them ....Divide and Rule ...also exposing the selfish alliances of this world . NZ is much more sensible in their foreign policy ...portray themselves to be Neutral and fully know which side of their bread is buttered :p

[Balance]

Regulatory risks overhanging any overseas firms doing business in China.

The authorities there at anytime can shave 50% off a company's earnings & share price by imposing punitive regulations - and there is no recourse.

Pay a PER of 30X F22 earnings for a company with high risk earnings?

Also begs the question why a multi-national like Nestle, already well represented in China with a full range of products, would want to takeover ATM in such a high risk market?


https://www.nzherald.co.nz/business/chinas-shake-up-heightens-regulatory-risk-for-kiwi-businesses/LP7CICGYRINALDKTEAUPZLLDRE/

Paywalled

Excerpt : "China's dramatic regulatory crackdown is being closely followed by local fund managers amid speculation of possible flow-on effects to some Australasian businesses. Questions have been raised, for example, about whether China could potentially look at introducing price caps on the sale of premium infant formula manufactured by international companies. The speculation first surfaced after the State Council of China released new birth policy in July with a strong focus on reducing the costs of raising a child."
"China is not just doing this to spite international firms. They are doing this probably reluctantly to deal with growing social unrest driven by wealth inequality and the lack of affordability in education and health etc.

"The big shock and awe factor has probably largely played out but there will be incremental fine tuning and adjusting and certain sectors they continue to look at. So, for New Zealand businesses doing business up there it's a good reminder that the cost of capital and required return on investing in China has got to be higher because it is a high-risk destination."

[Ggcc]

Regulatory risks overhanging any overseas firms doing business in China.

The authorities there at anytime can shave 50% off a company's earnings & share price by imposing punitive regulations - and there is no recourse.

Pay a PER of 30X F22 earnings for a company with high risk earnings?

Also begs the question why a multi-national like Nestle, already well represented in China with a full range of products, would want to takeover ATM in such a high risk market?


https://www.nzherald.co.nz/business/chinas-shake-up-heightens-regulatory-risk-for-kiwi-businesses/LP7CICGYRINALDKTEAUPZLLDRE/

Paywalled

Excerpt : "China's dramatic regulatory crackdown is being closely followed by local fund managers amid speculation of possible flow-on effects to some Australasian businesses. Questions have been raised, for example, about whether China could potentially look at introducing price caps on the sale of premium infant formula manufactured by international companies. The speculation first surfaced after the State Council of China released new birth policy in July with a strong focus on reducing the costs of raising a child."
"China is not just doing this to spite international firms. They are doing this probably reluctantly to deal with growing social unrest driven by wealth inequality and the lack of affordability in education and health etc.

"The big shock and awe factor has probably largely played out but there will be incremental fine tuning and adjusting and certain sectors they continue to look at. So, for New Zealand businesses doing business up there it's a good reminder that the cost of capital and required return on investing in China has got to be higher because it is a high-risk destination."
I just spoke to an orchidist which works for Scales. They are not sending any apples to China this year as it has become too risky. Even at a premium price they get, the risk is not worth it.

[alokdhir]

I like all the negative news flows being highlighted in the media ...they are setting the stage for capitulation ...making the SP even more attractive to a " Suitor " ...lets hope it works out that way for the sake of old shareholders still waiting for some good news out of this old horse :D

[couta1]

I like all the negative news flows being highlighted in the media ...they are setting the stage for capitulation ...making the SP even more attractive to a " Suitor " ...lets hope it works out that way for the sake of old shareholders still waiting for some good news out of this old horse :D How many old shareholders that bought in below current prices are left though? I would suggest very few by now, most of the current holders would range from those bleeding from a small cut to those that are on life support, this company is as an appalling story of wealth destruction as you will ever see for a large cap.

[alokdhir]

How many old shareholders that bought in below current prices are left though? I would suggest very few by now, most of the current holders would range from those bleeding from a small cut to those that are on life support, this company is as an appalling story of wealth destruction as you will ever see for a large cap.

I agree with your wealth destruction part ...but there are still many many here holding from 50 cents times ...they still making huge profits !!

If we see the long term charts of ATM then we observe it went up big in just 3 years now back to similar levels ...June 2017 SP was $ 3.25 ...so still making reasonable returns on just 4 years period . Only problem is with entrants after 2019 maybe . But it got too much euphoric attention of the markets ...while it was just a " One Trick Pony " ...China market and IF business ...still struggling to add something meaningful else

PS : Today Morningstar upgraded it to " Buy " ...lol

[Master98]

Regulatory risks overhanging any overseas firms doing business in China.

The authorities there at anytime can shave 50% off a company's earnings & share price by imposing punitive regulations - and there is no recourse.

Pay a PER of 30X F22 earnings for a company with high risk earnings?

Also begs the question why a multi-national like Nestle, already well represented in China with a full range of products, would want to takeover ATM in such a high risk market?


https://www.nzherald.co.nz/business/chinas-shake-up-heightens-regulatory-risk-for-kiwi-businesses/LP7CICGYRINALDKTEAUPZLLDRE/

Paywalled

Excerpt : "China's dramatic regulatory crackdown is being closely followed by local fund managers amid speculation of possible flow-on effects to some Australasian businesses. Questions have been raised, for example, about whether China could potentially look at introducing price caps on the sale of premium infant formula manufactured by international companies. The speculation first surfaced after the State Council of China released new birth policy in July with a strong focus on reducing the costs of raising a child."
"China is not just doing this to spite international firms. They are doing this probably reluctantly to deal with growing social unrest driven by wealth inequality and the lack of affordability in education and health etc.

"The big shock and awe factor has probably largely played out but there will be incremental fine tuning and adjusting and certain sectors they continue to look at. So, for New Zealand businesses doing business up there it's a good reminder that the cost of capital and required return on investing in China has got to be higher because it is a high-risk destination."
china market is "too big to ignore" for IF, be patient with this puppy!

[couta1]

I agree with your wealth destruction part ...but there are still many many here holding from 50 cents times ...they still making huge profits !!

If we see the long term charts of ATM then we observe it went up big in just 3 years now back to similar levels ...June 2017 SP was $ 3.25 ...so still making reasonable returns on just 4 years period . Only problem is with entrants after 2019 maybe . But it got too much euphoric attention of the markets ...while it was just a " One Trick Pony " ...China market and IF business ...still struggling to add something meaningful else

PS : Today Morningstar upgraded it to " Buy " ...lol In Sept 2017 the sp was around current level so your entrants after 2019 comment is far too generous, old holders at levels like 50c would be like hens teeth now, those people are a tiny minority in the story to date.

[alokdhir]

In Sept 2017 the sp was around current level so your entrants after 2019 comment is far too generous, old holders at levels like 50c would be like hens teeth now, those people are a tiny minority in the story to date.

Now many are hoping that it will stop somewhere then turnaround returns can be phenomenal if u can get lucky ...That involves luck also and some astute calculations also ...need understand how to see value in business from all's point of view ...not just number crunching type ...as some interested parties may see value in ATM @ say $ 5 and for some its worthless @ $ 3 also . $ 1.5 B revenue with profits and well tied supply chain etc may sound good to someone in the business etc .

For me its becoming very interesting for ATM from suitor point of view ...no one is thinking of this management doing anything worthwhile to improve SP in a hurry

[Beagle]

I think Balance makes a very good point. Paying a forward PE of 30 makes sense only when you have very high confidence in strong earnings growth . That metric made sense many years ago when the company was consistently growing very strongly year after year. It should be abundantly clear that the future for ATM is highly uncertain and the geopolitical risk has never been higher. A forward PE in the mid teens based on ~ 20 cps earnings would more correctly reflect the risk and opportunities in my opinion.

In my opinion this is a SELL and fair value is about $3.

[winner69]

Blackmores had similar problems with Chinese distribution and sales last year

Blackmores share recovering well …heading to $100 …..might even get to the highs of $170 odd again;)

[alokdhir]

Blackmores had similar problems with Chinese distribution and sales last year

Blackmores share recovering well …heading to $100 …..might even get to the highs of $170 odd again;)

Eventually should happen with ATM also ...depends upon your luck and patience to get those returns sooner then latter ...not easy to hold steadily going down stock ...But $ 3 should not happen and most likely wont happen . Not advising to buy ...just testing my market sense ...lol

[aperitif]

https://zhuanlan.zhihu.com/p/405875664

[mike2020]

Eventually should happen with ATM also ...depends upon your luck and patience to get those returns sooner then latter ...not easy to hold steadily going down stock ...But $ 3 should not happen and most likely wont happen . Not advising to buy ...just testing my market sense ...lol

No one said $3. They said $3.50 :)

[alokdhir]

No one said $3. They said $3.50 :)

If u read post # 22703 it mentions $ 3 ...but u want just $ 3.50 :cool:

[Ggcc]

https://zhuanlan.zhihu.com/p/405875664
Had to use google translate as all in Chinese, but it was interesting reading

[Rawz]

Had to use google translate as all in Chinese, but it was interesting reading

What was the gist of it Ggcc, please

[Ggcc]

What was the gist of it Ggcc, please
I am reading that all A2 milk sales of IF increased 110% over the month of July basically. have Pm'd the rest to you in bulletin points. Some of it is lost in translation to me

[Master98]

Omnichannel retail in China: How Australian infant nutrition firms are expanding offline and online reach (foodnavigator-asia.com) (https://www.foodnavigator-asia.com/Article/2021/09/13/Omnichannel-retail-in-China-How-Australian-infant-nutrition-firms-are-expanding-offline-and-online-reach)
australian infant milk omnichannel retail in china.

[dreamcatcher]

https://zhuanlan.zhihu.com/p/405875664

Interesting read many thanks.........Google translated version below

https://translate.google.com/translate?sl=auto&tl=en&u=https%3A%2F%2Ftranslate.google.com%2Ftranslate%3 Fsl%3Dauto%26tl%3Den%26u%3Dhttps%253A%252F%252Fzhu anlan.zhihu.com%252Fp%252F405875664

[aperitif]

From WeChat Index

12962

[Balance]

https://www.rnz.co.nz/audio/player?audio_id=2018812282

The rise & fall of a market darling.

Big lesson learnt - never fall in love with a stock. Don’t be afraid to change your investment strategy when the story changes.

[winner69]

No doubt China will 'sort' Australia out over AUKUS and Aussie nuclear subs

A2 better bring operations back to NZ and not masquarade as an Australian company

[Akane]

I wonder how Evergrande will affect ATM........

[dreamcatcher]

I wonder how Evergrande will affect ATM........

Security cordon surrounding their building with people demanding payment just imagine the ripple effect.

[Valuegrowth]

I wonder how Evergrande will affect ATM........

I don't think it will affect ATM. It will affect Iron ore producers. Construction materials too may come down.

https://www.valueprop.com/blog/dangers-customer-concentration

[Rawz]

SP looking sick. Looks like it’s going to set a new 52 week low next week.

I kinda had it in my mind that $5.50 was a good entry point, but now that we are here I think there isn’t much short term upside. All negative, I.e;
Rumors of a takeover gone.
China govt risks.
Declining birth rates in China.
No positive company announcements.
ATM on page 2 of sharetrader.

Okay, will buy at $5, promise

[winner69]

Direct Broking clients - A2 second most bought stock on NZX last week (FPH was first)

That must be good sign

BUY value traded in that stock exceeded the SELL value traded in that stock by the largest degree, last week.

[alokdhir]

Direct Broking clients - A2 second most bought stock on NZX last week (FPH was first)

That must be good sign

BUY value traded in that stock exceeded the SELL value traded in that stock by the largest degree, last week.

With index exclusion finally completed yesterday with $ 5.42 still intact ....seems SP wise worst is over ....maybe now the action will happen on takeover or stake sale etc front .

From SP angle this should be the worst time technically with many need sell out due to index exclusion ....so makes sense to start from this level .

[Beagle]

Direct Broking clients - A2 second most bought stock on NZX last week (FPH was first)

That must be good sign

BUY value traded in that stock exceeded the SELL value traded in that stock by the largest degree, last week.

Coutts appears to have been busy both on the ski slopes and off them.

Long term downtrend remains intact. Remains uninvest-able in my opinion for anyone other than short term traders.

[Balance]

Coutts appears to have been busy both on the ski slopes and off them.

Long term downtrend remains intact. Remains uninvest-able in my opinion for anyone other than short term traders.

Agreed.

Company has still to articulate a strategy to stabilise declining sales & falling margins, let alone grow sales & profits..

Unless there is a takeover, ATM is heading down towards $3.00 which is where fair value resides.

[Akane]

Direct Broking clients - A2 second most bought stock on NZX last week (FPH was first)

That must be good sign

BUY value traded in that stock exceeded the SELL value traded in that stock by the largest degree, last week.

Or it's the second most sold stock? When there's a buy, there's a sell.

[winner69]

Or it's the second most sold stock? When there's a buy, there's a sell.

Clients of other brokers must have been selling more stock than buying

[Akane]

Clients of other brokers must have been selling more stock than buying

Probably the sharesies crowd? :lol:

[Baa_Baa]

Clients of other brokers must have been selling more stock than buying

There were a very high number of very low value/volume trades (https://stocknessmonster.com/trades/atm.nzx/).

[percy]

There were a very high number of very low value/volume trades (https://stocknessmonster.com/trades/atm.nzx/).

I take it that shows the big buyers are off skiing with Couta1.

[winner69]

There were a very high number of very low value/volume trades (https://stocknessmonster.com/trades/atm.nzx/).

In total last week Direct Broking clients bought more $s (value) of A2 stock then DB clients sold

[couta1]

I take it that shows the big buyers are off skiing with Couta1. Lol your right there but the A2 Milk company has been a frequently discussed topic on the chairlifts, I'm sure many potential punters are not going to be opening their wallets in a hurry after hearing my story, the land of milk and honey can turn into a dry desert with cracks everywhere and no bees to be seen.

[alokdhir]

In total last week Direct Broking clients bought more $s (value) of A2 stock then DB clients sold

Who are the advisers of DB clients ? Which analyst group ? Also do they have High Net Worth clients more then smaller clients ...maybe they got advance advise to load up !!!

[Ggcc]

Who are the advisers of DB clients ? Which analyst group ? Also do they have High Net Worth clients more then smaller clients ...maybe they got advance advise to load up !!!
I’m a direct broker client and I don’t take advice from any advisors other than Doing My Own Research

[alokdhir]

I’m a direct broker client and I don’t take advice from any advisors other than Doing My Own Research

I found out that its Jarden enterprise and they do advise their HNI clients ....also they are active analysts on NZX stocks . Own research actually works best

[aperitif]

https://mp.weixin.qq.com/s/yLyV5yeGBaiGXyRY1WXIaw

[flyinglizard]

retail investors are buying but why SP keeps dropping? Institution holders dumping, maybe

[Balance]

retail investors are buying but why SP keeps dropping? Institution holders dumping, maybe

Sharks vs reef fishes.

[Balance]

Will ATM be one of the most affected stocks by the Evergrande effect?

We shall see today.

[whatsup]

$5-40 bottom for now, Im tempted !

[Balance]

$5-40 bottom for now, Im tempted !

Go for it then.

He who dares, wins!

Or so they say as they jump into the abyss?

[Blue Skies]

Will ATM be one of the most affected stocks by the Evergrande effect?

We shall see today.


Bound to be, but ATM will surely benefit eventually from NZ being out of the AUKUS agreement. That would have been the final nail in the coffin.

[whatsup]

$5-40 bottom for now, Im tempted !

UP UP and AWAY ( for now ! ). Will be interesting to see the Aussie open.

[Balance]

Bound to be, but ATM will surely benefit eventually from NZ being out of the AUKUS agreement. That would have been the final nail in the coffin.

But ATM is operated & managed out of Australia.

[Blue Skies]

But ATM is operated & managed out of Australia.


Hush, did you have to mention that ?
Lets emphasise its Headquarters is in Auckland & of course it was founded in NZ. :)

[Balance]

Hush, did you have to mention that ?
Lets emphasise its Headquarters is in Auckland & of course it was founded in NZ. :)

Should not take the Chinese for fools. If they decide to take action against the dairy sector (possible but unlikely at this stage), they will know that ATM is an Australian managed and operated company.

ATM should be smart and relocate its management operations back to NZ before the shxt hits the fan.

[Baa_Baa]

Should not take the Chinese for fools. If they decide to take action against the dairy sector (possible but unlikely at this stage), they will know that ATM is an Australian managed and operated company.

ATM should be smart and relocate its management operations back to NZ before the shxt hits the fan.

Certainly the Chinese are not fools, we're talking about their government here. They've already shown what they can do if they want to. Probably more to come. Whether it affects A2 Milk remains to be seen, so far it doesn't affect it at all.

While Australia represents A2's largest market - for fresh milk - and China it's second largest - for infant formula, all A2 infant formula product into China is sourced and shipped from New Zealand, manufactured by Synlait under very strict rules imposed by the Chinese.

A2 Milk has "management operations" in a number of countries (https://thea2milkcompany.com/our-businesses), with China having its own dedicated A2 Milk management operations. A2 Milk, Synlait and Mataura all have significant strategic ownership representation of Chinese company's.

Australia – a2 Milk™
Australia – a2 Platinum®
New Zealand – a2 Milk™
USA – a2 Milk®
China – a2™至初® (https://www.a2nutrition.cn) ... check out the China operations (you'll need a translator if only read English)
Canada – a2 Milk™
China – Official Tmall China store
HK – Official Tmall Global store

Sure, the macro risk is there but trying to pin it on A2 having offices in Australia, well I'm not sure what would motivate such a narrow focus.

[Balance]

Management operations as in CEO & all key operational executives - we and China know they manage & operate out of Australia. All key decisions are made from there.

Impossible not to notice given the big hooha with Jayne’s appointment & subsequent termination.

[Baa_Baa]

An illustration of the relationship A2 Milk has with China government is via the 'China Animal Husbandry Group' (CAHG), a China 'State Owned Enterprise'. CAHG’s parent company is the state-owned China National Agriculture Development Group (https://www.cnadc.com.cn/en/index.jhtml), which also owns a logistics and distribution company in Shanghai which is a key partner for A2 Milk. "CNADC adheres to the plans made by the Central Committee of the CPC and the State Council"

CAGH announced in 2016 the acquisition of Mataura Valley Milk processing plant. Since then the ownership has recently changed with A2 Milk taking 75% share and CAHG retaining 25%.

The Mataura Valley Milk Board composition changed with David Bortolussi as chair but they retained Dr Tingwu Xue as Director; he is President of China Animal Husbandry Group (the largest Chinese SOE in Animal Husbandry and the major shareholder of Mataura Valley Milk, BODCO Limited). Chairman of Mataura Valley Milk, BODCO Limited and Nouriz. They also retained Deyong Zhang as DirectorChief Compliance Officer and General Manager of International Business of China Animal Husbandry Group.

The CAHG website (https://cahg.cnadc.com.cn/NewsRoom/index.jhtml) describes New Zealand Milk as "Best Source of Milk in the World".

The CAHG relationship with A2 Milk is highly strategic, indeed critical in terms of the infant formula supply and distribution channels from NZ into China.

I think A2 Milk is sufficiently well known by, and connected to, the CAHG, CNADC SOE's and ultimately the strategy and plans of the CPC, to realise A2 Milk is a New Zealand company sourcing, manufacturing, infant formula into China. It does the CAHG, CNADC, and CPC an injustice insulting them in that they might naively think A2 Milk is an Australian company.

It would be quite the thing if China sanctioned, embargoed or otherwise compromised the A2 Milk Company. I just can't see it happening, is there risk, yes, is there great risk or impending doom. Yeah nah.

[flyinglizard]

Evergrande debt crisis triggers tighten monetary policy in Chinese banking system. The total property value/ total GDP ratio is over 400% in China. Bank won't lend to medium - high debt Chinese corporates at least in the near future. The rumour of A2 takeover from Chinese equity will be killed as a result in this incident.

[aperitif]

Is this a fact or your opinion? Interesting