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05-11-2020, 11:18 AM
#17721
Originally Posted by Beagle
Who knows what the future holds. They will either do the $1,100m in the second half and the shares will recover or they won't and the degree by which they undershoot will be the degree by which the shares are punished, time will tell. If they do more than $1,100m in the second half I'd say its party time and Coutts will be out of jail.
I was just thinking this morning....there could be a real baby boom coming up. All these lockdown's and people having nothing much to do other than watch T.V. surf the internet and do the business with their partners.
First half sales are not yet reported ...who knows they beat 775 mil guidance ...so no need do 1.1 billion next half ...who knows 11/11 sales far exceed expectations ...part of first half !! So as stated before ...will know for surely on 18th Nov ...it can be short term lottery !!!
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05-11-2020, 01:14 PM
#17722
For Bars Report
Proprietary Channel Checking in China
OUTPERFORM
We recently visited 34 stores in China, interviewing sales reps & store managers, analysing a2's shelf presence, pricing, and
the perception of New Zealand sourced infant formula. We complemented this with a proprietary online survey, with 105
responses from end customers. Travel restrictions meant the channel checks were undertaken by our colleagues in Hong
Kong. Our findings provide confidence that The a2 Milk Company (ATM) is performing well in the key offline channel. It also
supports our view that the recent daigou-linked downgrade is a temporary issue, particularly as channel mix readjusts. After
recent underperformance, ATM is trading at a one year forward PE of ~24x (~21x adjusted for cash and ~19x when also
adjusted for US losses) — attractive against any benchmark.
Three key take-aways from our proprietary channel checks
Other notable points of interest
N E W Z E A L A N D E Q U I T Y R E S E A RC H F O O D, B E V S , & AG R I DA I R Y N U T R I T I O N C O M PA N Y
5 N OV E M B E R 2 0 2 0
NZX Code ATM
Share price NZ$14.35
Target price NZ$23.00
Risk rating High
Issued shares 736.5m
Market cap NZ$10,568m
Avg daily turnover 782.4k (NZ$13,395k)
Financials: Jun/ 20A 21E 22E 23E
NPAT* (NZ$m) 385.8 406.7 498.2 573.1
EPS* (NZc) 52.1 54.9 67.3 77.4
EPS growth* (%) 34.4 5.4 22.5 15.0
DPS (NZc) 0.0 0.0 0.0 23.2
Imputation (%) 100 100 100 100
*Based on normalised profits
Valuation (x) 20A 21E 22E 23E
PE 27.5 26.1 21.3 18.5
EV/EBIT 17.7 16.2 13.1 11.4
EV/EBITDA 17.5 16.0 12.9 11.2
Price / NTA 9.4 7.0 5.3 4.2
Cash div yld (%) 0.0 0.0 0.0 1.6
Gross div yld (%) 0.0 0.0 0.0 2.2
Very high recognition that a2 Platinum is New Zealand sourced. 91% of Mother & Baby Store (MBS) personnel we spoke to
indicated that a2 is New Zealand sourced, with the balance citing New Zealand and Australia. This is particularly important given
recent escalating geopolitical tension between China and Australia.
Strong performance for ATM across our channel checks, with results from our MBS visits surprisingly the strongest. This
includes a2 ranking #1 brand in our MBS interviews, with a2 the most consistently named brand in the “top sellers”. This is
encouraging given we view the offline channel as the key avenue of growth for ATM.
New Zealand/foreign still ranking well, albeit observable lift in domestic: New Zealand still tops the list for IF quality
perception (by a large margin), however, MBS personnel noted some change in consumer behaviour in favour of domestic brands.
Signs of discipline from ATM. With well controlled pricing and what appears to be a targeted marketing and investment approach.
Predominant resistance against buying a2 was price (~18% of total responses in both our offline and online surveys).
Category showing resilience; 86% of respondents said they would not change their IF brand of choice if their income declined.
No observable inventory turn issues. With expiry dates fresh and ATM’s new lid at all stores visited.
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05-11-2020, 01:18 PM
#17723
Thanks for that Greekwatchdog, very bullish report.
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05-11-2020, 01:20 PM
#17724
Originally Posted by sb9
Thanks for that Greekwatchdog, very bullish report.
Now that ain't no bull....
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05-11-2020, 01:35 PM
#17725
Originally Posted by Greekwatchdog
For Bars Report
Proprietary Channel Checking in China
OUTPERFORM
We recently visited 34 stores in China, interviewing sales reps & store managers, analysing a2's shelf presence, pricing, and
the perception of New Zealand sourced infant formula. We complemented this with a proprietary online survey, with 105
responses from end customers. Travel restrictions meant the channel checks were undertaken by our colleagues in Hong
Kong. Our findings provide confidence that The a2 Milk Company (ATM) is performing well in the key offline channel. It also
supports our view that the recent daigou-linked downgrade is a temporary issue, particularly as channel mix readjusts. After
recent underperformance, ATM is trading at a one year forward PE of ~24x (~21x adjusted for cash and ~19x when also
adjusted for US losses) — attractive against any benchmark.
Three key take-aways from our proprietary channel checks
Other notable points of interest
N E W Z E A L A N D E Q U I T Y R E S E A RC H F O O D, B E V S , & AG R I DA I R Y N U T R I T I O N C O M PA N Y
5 N OV E M B E R 2 0 2 0
NZX Code ATM
Share price NZ$14.35
Target price NZ$23.00
Risk rating High
Issued shares 736.5m
Market cap NZ$10,568m
Avg daily turnover 782.4k (NZ$13,395k)
Financials: Jun/ 20A 21E 22E 23E
NPAT* (NZ$m) 385.8 406.7 498.2 573.1
EPS* (NZc) 52.1 54.9 67.3 77.4
EPS growth* (%) 34.4 5.4 22.5 15.0
DPS (NZc) 0.0 0.0 0.0 23.2
Imputation (%) 100 100 100 100
*Based on normalised profits
Valuation (x) 20A 21E 22E 23E
PE 27.5 26.1 21.3 18.5
EV/EBIT 17.7 16.2 13.1 11.4
EV/EBITDA 17.5 16.0 12.9 11.2
Price / NTA 9.4 7.0 5.3 4.2
Cash div yld (%) 0.0 0.0 0.0 1.6
Gross div yld (%) 0.0 0.0 0.0 2.2
Very high recognition that a2 Platinum is New Zealand sourced. 91% of Mother & Baby Store (MBS) personnel we spoke to
indicated that a2 is New Zealand sourced, with the balance citing New Zealand and Australia. This is particularly important given
recent escalating geopolitical tension between China and Australia.
Strong performance for ATM across our channel checks, with results from our MBS visits surprisingly the strongest. This
includes a2 ranking #1 brand in our MBS interviews, with a2 the most consistently named brand in the “top sellers”. This is
encouraging given we view the offline channel as the key avenue of growth for ATM.
New Zealand/foreign still ranking well, albeit observable lift in domestic: New Zealand still tops the list for IF quality
perception (by a large margin), however, MBS personnel noted some change in consumer behaviour in favour of domestic brands.
Signs of discipline from ATM. With well controlled pricing and what appears to be a targeted marketing and investment approach.
Predominant resistance against buying a2 was price (~18% of total responses in both our offline and online surveys).
Category showing resilience; 86% of respondents said they would not change their IF brand of choice if their income declined.
No observable inventory turn issues. With expiry dates fresh and ATM’s new lid at all stores visited.
forbar notes signs just as the afr article did about bubs noticing a shift ( how big?) to local brands
one step ahead of the herd
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05-11-2020, 01:44 PM
#17726
Member
Originally Posted by bull....
forbar notes signs just as the afr article did about bubs noticing a shift ( how big?) to local brands
I think you under estimate how large the Chinese population is.
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05-11-2020, 01:47 PM
#17727
UBS target of $22.50, this one at $23 and my own at $25, let's take the $23.50 average and be done with it.
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05-11-2020, 01:52 PM
#17728
Originally Posted by Gunner
I think you under estimate how large the Chinese population is.
He underestimates a lot of things on purpose to benefit his ramping motives.
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05-11-2020, 02:06 PM
#17729
Member
I saw some Chinese social platforms discuss Chinese domestic infant formulas, it’s actually pricier than infant formula produced overseas, a premium domestic brand can cost around 400 rmb per can and brands like a2 English label are around 200 rmb per can. Why there are trend amongst local parents that want to shift to domestic because they worry about COVID situation worse in overseas and worried about overseas Infant formula may contain COVID virus.
So if New Zealand can control COVID and maintain COVID free, it’s good for a2.
if New Zealand government can maintain the relationship with China. It’s good for a2 as well.
Last edited by Justin; 05-11-2020 at 03:25 PM.
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05-11-2020, 02:14 PM
#17730
Member
Originally Posted by couta1
He underestimates a lot of things on purpose to benefit his ramping motives.
He must genuinely believe what he says, otherwise he is wasting his time if he thinks he can any effect on its share price through this platform
Last edited by Gunner; 05-11-2020 at 02:24 PM.
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