ATM - A2 Milk Corporation Limited

[wagwan]

If there is any future Chinese action against Daigou channels, I suspect it will only serve to further strengthen the alternative channels trend shown (which also benefits the CCP owned companies tied to ATM's local distribution/production.)

I always regarded the Daigou channels as 'opportunistic' and never a long term channel so replacing this channel is actually a good move IMHO.

Completely agree - would think given the sophistication of A2 from a logistics, distribution and marketing perspective, management would have avoided putting too many eggs in the Daigou channel basket.

Surely, while efficient etc, it was always a channel characterised as high risk. Even without China-Aus tensions, any number of things could have disrupted this channel?

Maybe the market is overestimating the influence, and impact of Diagou channel on A2 ability to get product into China?

Clarification at next market update could go a long way to alleviating market nerves.

[Biscuit]

This kinda sums up the situation for me. Competing influences of...

* Product factors, is A2 milk really a 'thing' (and are the various markets prepared to pay a premium for it)
* Covid-factors, such as daigou 'choking' (never a huge, or reliable channel in its own right anyway)
* Geo-political factors, ie China really is taking Oz to task here to prove a point (will this come to affect ATM?)
* Economic factors (will ATM be able to continue as a premium 'growth' story as it expands in various markets, not just China)
* Investment factors, ie institutional v's retail investment (RobinHooders / Sharesies investors driving much of the present bull market)
* ASX shorting factors, which have been a huge influence to date, but historically/inevitably end in a momentous short squeeze (eg TSLA)
* Market factors, as Baa_Baa refers to above, including TA support levels (if you're into that kind of thing)
* Personal factors, such as balanced exposure, risk appetite, buy-and-hold v's ?, etc. You know, the usual stuff

Which is a heap to consider, but balances out for every individual: if/when to buy in, and at what price?

Personally, I'm in, and adding every time the sp drops below $14-ish, but this is a small part of my portfolio and balanced by other non-dairy, non-NZ, non-China, non-equity, non-whatever.

It's a risk/reward deal, like any other investment decision you make. ie you balance your risk v's the possible rewards.

Don't mean to sound preachy, but that's about it, as far as I can tell...

In my experience, things tend to work out ok in the end.

[Leftfield]

Thanks, LF. I get the picture now - those are huge numbers of IF resales through Australia via the daigou channel for ATM.

Important to appreciate the difficulty of knowing the real size of the Daigou channel.

Whether a young mom is buying IF from her local Aussie supermarket for her baby, or parcelling it up and sending it back to relatives/friends/on-line orders etc in China would not be identifiable as a daigou sale by ATM.

Sales to large corporate daigou's could be known if they purchased direct from ATM. However, I suspect many smaller corporate Daigou's purchased from existing wholesalers/retailers (as evidenced by the 'shopping teams' that were once seen plundering Australian supermarket shelves.)

Ssssoo the true extent of this channel may never be known.

[winner69]

In my experience, things tend to work out ok in the end.

Yes indeed , easy to blindsided by an enormous amount of noise - esp if you analyse the noise to death and worry about the consequences

Sometime in the future one may ask out of curiosity 'did something happen in December 2010?'

[Balance]

They say share prices are driven by greed, fear and hope.

ATM currently is a great example of all 3 at work!

[Biscuit]

They say share prices are driven by greed, fear and hope.

ATM currently is a great example of all 3 at work!

There has been a distinctly cyclical nature to ATM's fear-hope-greed sequence. Historically, December is the month of hope.

[tomm]

you guys only talk about china , china ..but forgot about US.
It got 900% increased and continue expaning itself... imaging the Us markets... and they are just starting...

[xp04]

Here’s the rub I suspect :

Any ban will mean no export of A2 IF or milk powder via Australia.

Hope ATM has a contingency plan in place to export from NZ to the Australian based Daigou players (they are obviously big players) in such an event.

So, what you are saying is AU just need to send their currently banned products through NZ ports and problem disappears for them? It will became NZ products. Don’t know how aussies still haven’t figured this out

[Balance]

you guys only talk about china , china ..but forgot about US.
It got 900% increased and continue expaning itself... imaging the Us markets... and they are just starting...

US market is potential (hope), China is reality (fear).

bull.... is in the wings, waiting to pounce (greed).

[Gregnz]

Yes indeed , easy to blindsided by an enormous amount of noise - esp if you analyse the noise to death and worry about the consequences

Sometime in the future one may ask out of curiosity 'did something happen in December 2010?'

What happened in December 2010?