ATM - A2 Milk Corporation Limited

[aperitif]

a2’s WeChat impressions have gone parabolic this week. Interesting times 14998

[Sideshow Bob]

Meantime, struggling to make much headway on Amazon......number 81 on the best seller list.

Bubs 2nd and 6th....

https://www.amazon.com/Best-Sellers-Baby-Toddler-Formula/zgbs/baby-products/16323121

[winner69]

A2 share price a bit weak today ….. getting tainted with problems at Synlait?

[Sideshow Bob]

https://www.nutraingredients-asia.com/Article/2024/04/15/major-infant-nutrition-brands-gaining-market-shares-in-china-despite-shrinking-birth-rates?utm_source=copyright&utm_medium=OnSite&utm_campaign=copyright

Growth in market share for A2 and other brands.

[aperitif]

15064

New products now on JD & Tmall

[aperitif]

http://www.myguancha.com/post/23399.html

[Sideshow Bob]

https://www.interest.co.nz/rural-news/127749/keith-woodford-reveals-rather-remarkable-transition-underway-where-a2-beta-casein?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+1 5+May+2024

Keith Woodford reveals a rather remarkable transition underway where A2 beta-casein milk from 2024-born calves will exceed 85%. He calls for a full-industry review of how we can benefit from the unique advantage that gives our dairy sector

[whatsup]

ATM, up and running ( again IMO ) !

[sb9]

It’s been very looooong time between drinks..

[Baa_Baa]

It’s been very looooong time between drinks..

Up over 80% since the Nov 23 low, snooze & lose. I thing there has been so much negative sentiment on ATM for such a long time, people have taken their eye off the ball, and miss the recovery ... even if it turns out to just be a 'trade'.

[Sideshow Bob]

https://www.livewiremarkets.com/wires/why-a2-milk-is-back-in-flavour?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Thursday+23 +May+2024

[Bikeguy]

A2 seems to be gaining fairly steady now?

[Sideshow Bob]

A2 seems to be gaining fairly steady now?

Basically highest level since May 2021, when it was all unwinding.

Obviously market sees no Synlait/China IF issues.

[Bikeguy]

Basically highest level since May 2021, when it was all unwinding.

Obviously market sees no Synlait/China IF issues.

Yes, have to agree, market seems to know something? It’s been down for so long and there hasn’t been any really startling positive news has there?

[carrom74]

Expect some substantial holding notices soon. That will show us who is buying..(Hopefully not Citi nor Goldman sachs)

[Bikeguy]

Expect some substantial holding notices soon. That will show us who is buying..(Hopefully not Citi nor Goldman sachs)

Are they big shorters?

[carrom74]

Are they big shorters?
Yup- pump n dump brigade- GS for sure

[Sideshow Bob]

https://www.shortman.com.au/top

Only 33rd on the ASX.

[Newman]

Basically highest level since May 2021, when it was all unwinding.

Obviously market sees no Synlait/China IF issues.

What if Synlait goes into receivership, its plant that produces A2 infant formula is sold to someone else, and A2M does not have sufficient IF cans to sell to China?

[Baa_Baa]

What if Synlait goes into receivership, its plant that produces A2 infant formula is sold to someone else, and A2M does not have sufficient IF cans to sell to China?

Cue ‘Jaws’ music. Have a think about the massive vested interests of the two largest shareholders, then consider whether this is a realistic scenario.

[Bikeguy]

What if Synlait goes into receivership, its plant that produces A2 infant formula is sold to someone else, and A2M does not have sufficient IF cans to sell to China?

Yes, agreed, thats kind of why I’m surprised at the level of lift and consistency lately…

I just didn’t envisage this type of movement without the supply situation being suitably sorted…maybe it is?

Cards surely have to be turned over sooner rather than later….

[Mrbuyit]

Probably making more money from thier massive pile of cash ( its something like 800m isnt it?)than they are from selling milk powder?

[Bikeguy]

Probably making more money from thier massive pile of cash ( it’s something like 800m isnt it?)than they are from selling milk powder?

So true, must be making a mint at the moment with the high interest rates!!

[Baa_Baa]

Probably making more money from thier massive pile of cash ( its something like 800m isnt it?)than they are from selling milk powder?

At roughly 6% interest on $800m, the interest earned would be about 3% of sales revenue. So it would be far more sensible to deploy that capital into something productive

[Mrbuyit]

For sure the revenue number at ~800m blitzes the potential interest earnings, but i think total profit for last 6 months reporting period was something like 85M?

[Bikeguy]

At roughly 6% interest on $800m, the interest earned would be about 3% of sales revenue. So it would be far more sensible to deploy that capital into something productive

Like purchasing SML?

[sb9]

At this we could see sp in double digits veru soon. That’ll be some turnaround lead by DB, if it indeed happens.

[aperitif]

Data and trends

In the first quarter of 2024, maternal and infant consumption data were released, and online sales of milk powder increased by 10.6% year-on-year.Recently, Magic Mirror Insight officially released the White Paper on New Consumption Potential in the First Quarter of 2024 (hereinafter referred to as the White Paper). In the white paper, the consumption trends and data of maternal and infant categories in the first quarter are disclosed in detail. In the first quarter of 2024, the online sales of the infant milk powder market reached 10.6 billion yuan, with sales increasing by 10.6% year-on-year. At the same time, the online sales of the infant diaper market and the infant nutrition market also maintained a growth rate, and the online sales of infant nutrition products reached 2.7 billion yuan, a year-on-year increase of 16.5%.

http://myguancha.com/post/23510.html

[billkiapi]

Like purchasing SML?

That will change dynamics quite a bit. A2M is a business that has been built off contract manufacturing- essentially outsourcing capital risk of product plants, and outsourcing production and supply risks (fixed/variable cost issues). It's helped A2M amass a huge cash pile.

Buying SML makes a whole lot of vertical integration sense, but they'll quickly need to build production management talent in house. A well run production plant is a wonderful thing, but it's easy to have a badly run production plant which sucks cash out of the business.

[Bikeguy]

That will change dynamics quite a bit. A2M is a business that has been built off contract manufacturing- essentially outsourcing capital risk of product plants, and outsourcing production and supply risks (fixed/variable cost issues). It's helped A2M amass a huge cash pile.

Buying SML makes a whole lot of vertical integration sense, but they'll quickly need to build production management talent in house. A well run production plant is a wonderful thing, but it's easy to have a badly run production plant which sucks cash out of the business.

This is such an interesting situation, both parties effectively need to maintain relationships with each other going forward ?(Bright &A2)

[Newman]

This is such an interesting situation, both parties effectively need to maintain relationships with each other going forward ?(Bright &A2)

Without Bright Dairy, Synlait would not be able to renew its license to produce IF for exporting to China, and without the license, A2M would lose a large part of its business.

[Bikeguy]

Without Bright Dairy, Synlait would not be able to renew its license to produce IF for exporting to China, and without the license, A2M would lose a large part of its business.

I think the same, whatever happens it’s not in either parties interests to win the battle with to much blood on the floor…

[whatsup]

WHO is the big sella today OFF aprox 5% atm ? !!!

[carrom74]

Overbought and no news .. so was always expected to get a pull back .

[billkiapi]

Not sure a2 don't have insurance for that with Yashili (Mengniu) and China State Farms/Animal Husbandry. I think SML relied on the Bright effect and it has backfired.