ATM - A2 Milk Corporation Limited

[rbel038]

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

[Master98]

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

[blobbles]

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

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

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

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

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

[see weed]

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

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

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

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

[MAC]

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

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

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

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

http://www.dairyreporter.com/Manufac...-of-10-a2-Milk

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

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

[winner69]

Biggest shareholder Freedom said this on Friday in their results announcement

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

And this

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


Interesting

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

[Master98]

Biggest shareholder Freedom said this on Friday in their results announcement

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

And this

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


Interesting

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

Freedom could bought into ATM at under 10c years ago on NZAX.

[bull....]

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

[Harrie]

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

[psychic]

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

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