ATM - A2 Milk Corporation Limited

[allfromacell]

Nice to see strong growth continued in the CBEC and China labels, also surprised to see A2 Fresh Milk in Aus still growing strongly at 12%.

I think the revenue guidance is broadly inline with consensus but increased margins should see the SP lifting today . Hopefully theses are conservative too.

[couta1]

Consensus beaten, analyst upgrades will be forthcoming, not that I care what those manipulating scum think but some do.

[silu]

Hot damn I'm still going through the figures but on first count they exceeded my expectations. Let's hope the market is getting the same surprise as me and is burning whoever still shorts this stock.

[NZSilver]

Consensus is approx 1.65bil for fy 2020, so 800mil half year means likely fy will be 1.8-2billion. Significant upgrade. Should have bought more at these prices, but I didn't sell any either so glass is half full!

[mfd]

Half year revenue expected to be 30% up on last year with decent margins maintained, and the long term incentive plan places a floor of 15% CAGR for both EPS and revenue for the next few years if management want their bonuses. Happy to hold.

[silu]

Although still small in the overall scheme of things I find the +110% growth for US sales very pleasing.

[couta1]

Must also mention the new supply agreement with Synlait with very favourable terms for A2.

[Beagle]

Last year they did 47% of their sales in IH so at the mid point of sales guidance if we extrapolate the same 1H - 2H trend out sales for FY20 will come in about $1.68B as against average analyst expectation of $1.65b, a 1.8% forecast consensus beat.

By my calculations at the mid point of EBITDA forecast of 29.5% against average analyst expectation of 28.2% this adds $1,680m x 1.3% = $21.8m to EBITDA, which was according to average analyst estimate $476m, so is now $497.8m. I expect eps to be about 5% above the current analyst average of 44 cps = ~ 46 cps which gives approx. 18% earnings growth on last years 39 cps.

My thoughts, worthwhile update and I have moved my thinking to seeing the shares at fair value at $13, forward PE 28 seems reasonable with a growth rate of 18% and forecast growth rate for the FY21 and FY22 of a similar amount. Upgraded from reduce to HOLD at $13.

Disc: No position and not looking to buy.

[couta1]

Lol $13 is history, back to $18 next year, enjoy the ride holders.

[Oliver Mander]

Talk about knocking it out of the park. Should have backed my instinct more int he run-up to this...won't do badly at all, but held back a bit 'cause of the uncertainty. Powerful looking Outlook.