is this not due to being reliant on daigou in Australasia,
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This company is so slow to review and change its marketing approach, we have covid 19 for so long. The company has light assets, so it cannot be the sort of too big to change type. Is it too lazy or incompetent to change?
Maybe many years Daigou built its brand, marketing channel and high growth business model for the management team. They used to sit back and relax, let daigou do the hard work. Now Daigou has gone. The company failed to develop new market, failed to have production differentiation and failed to adopt its new market strategy under current covid environment on a monthly basis. The management enjoys their holiday and sold hell lot of holdings at the peak with some unbelievable forecasting reports. I seriously question their ability to produce a reasonable and trustful quarterly forecasting report. If you cannot, do it monthly.
The new CBEC channel only brings their higher cost, mountains of account receivables, even bad debt. Do they really have ability to manage their cash flow under new CBEC business model? They enjoyed many years "cash sale" business model from daigou channel. Now they have problem to manage their inventory system, what would be the next? cash flow!
The share buy back plan just accelerates burning company cash reserve, it really change nothing regards to its business model.
I hold my opinion firmly that SP of ATM will reach $3.5 range soon.
He sounded rather shell-shocked & a bit lost actually :
What's the current state of play with daigou?
Bortolussi said the retail component of the daigou trade had reduced substantially, although it was better than it had been.
"The corporate daigou channel - which involves multiple routes to markets - is still operating, albeit at a reduced scale - but it is still operating in a healthy way.
"The cross border English label business will continue to be an important part of our business going forward."
Have other parts of the business taken up the slack?
"Our China label business - the domestic business in China - is performing in line with expectations.
"It's broken down a little bit there at the moment for various reasons but that's a real focus for us in the future - growing our business in China domestically.
https://www.nzherald.co.nz/business...sharemarket-lower/W4Z2PITK4YXEDKCHJ3M45FLFZU/
Excerpts;
"...Oyvinn Rimer, senior research analyst at Harbour Asset Management, said a downgrade had been expected for some time and did not reflect the underlying strength of the business. New chief executive David Bortolussi had made a2 Milk's position more credible with the market, he added.
"He has acknowledged that there are some pretty significant macro variables going on in the infant formula industry.
"That, in the past, has not been accepted by the company," he said.
"There has been a change in the language and he is acknowledging that this is a problem and has presented some solutions on how to deal with them," he said. "What they have presented sounds sensible," Rimer said..."
Anyone read or heard about said solutions by DB today?
This is what I read : "However, the Company recognises that the China market and channel structure is changing rapidly and
has therefore commenced a comprehensive process to review its growth strategy and executional plans
to respond to this new environment."
So 8 months after the first downgrade and 9 months after the AGM where it was all rah rah rah, it will take another ? more months to come up with a comprehensive strategy!
What have they been doing over the last 9 months? Busy counting the 5.5 million cans of IF in their store rooms? :scared:
Jayne must be laughing into her champagne & caviar (no A2 milkshake please) to read that they are now going to adopt her strategy of increased spending, just to to stem the loss of sales but with no clear strategy yet until a comprehensive review! Heck, she presented one to them and they sacked her! :t_down:
When you summarised the new CEO appointment objectives (tactics), this is one you forgot to mention. I'm sure you meant to, or maybe you did but I missed it.
The new CEO list of things to do is a lot longer than just getting the skele's out of the closet. The "review", as you point out, no-one in the company, directors included, have confidence in anyone in the company to 'sum up the situation and develop a coherent response plan'. It's still fluid. CEO nicely puts himself at arms length, as well as buying some more time. Brilliantly played, for a company he knows is not fecked, far from it, but maybe like Foran he might've stepped in at a rather unfortunate time!
I didn't buy too many today, honest.
I spent one hour to complete this one. They have totally no idea for which direction the company is heading and what's results or changes they will get in terms of production, inventory management, and price differentiation betw Chinese and English labelling after business model changes. I feel that the new inventory swap policy for CBEC channel will bring A2 SP down. I need re-calculate my spreadsheet again.
Beagle - good to have you back and thank you for saving my bacon, with your advice in a situation like this to not get in until we have crossed the 90 day moving average on the up side. Is still nowhere near.
What a shocking concept, all that potentially going down the drain. Don't tell the greenies. Imagine the amount of methane produced, coal burnt and all the other environmental cost that went into making this magic white powder that they can't shift. Let's hope they find something useful to do with it.
the one thing management did right in my opinion is not paying dividends lol.They are going to need that cash runway.