ATM - A2 Milk Corporation Limited

[Balance]

I think they were riding that gravy train all the way up, don't really care what's going on in the back ground as long as the honey is still flowing....
Now the ****'s hit the fan (well, more than a year ago really), I hope the BOD gets a kick in the ass, a wake up all and start cleaning up the company.

Sp down 26% YTD and breaking through all the support points - now heading down towards $7.50.

Mr Hearn is doing the company no favors, engaging in a public slanging match with Jayne via the media.

https://www.fool.com.au/2021/03/17/a...-ex-ceo-drama/

AFR adds that Ms Hrdlicka, however, released the following statement:

The information in the letter contains false statements, is contextually incorrect and designed to inflict maximum damage on me personally. I wrote to Mr Hearn today seeking clarification and further information on a number of matters and have not yet received a reply.

[Baa_Baa]

The whole Ms Hrdlicka vs Hearn thing is a distraction, irrelevant past tense. $7.50 marked on my chart, Legend @Balance gives guidance on the buy of the decade.

[Balance]

The whole Ms Hrdlicka vs Hearn thing is a distraction, irrelevant past tense. $7.50 marked on my chart, Legend @Balance gives guidance on the buy of the decade.

Irrelevant?

I would say as pertinent & as insightful as you are ever going to get about how ATM has been managed & directed as a company.

That’s probably why some shareholders have decided to sell out - because it is clear that the new CEO has a task & some serious issues ahead of him with a Chairman & Board who appointed Jayne & then, decided to part company for obscure reasons which are now surfacing into the public arena.

Meanwhile, since you use charts, are you reading the support points and trend line any differently to my observation that A2M is heading towards A$7.50?

As for the buy of the decade, I thought that some of you believed $10 was buy of the century?

[Balance]

https://www.nzherald.co.nz/business/...Z5YC6RYLYCBA4/

paywalled

Looks like both parties in ATM have decided to call it a truce - should never have happened in the first place.

Meanwhile, Forbar has done some scouting around in China :

"There is nothing to change our view that the opportunity for the a2 Milk Co is material in offline channels in China, where it currently under-indexes, and we see a2 Milk as well-placed to continue to grow.

"However there are increasing headwinds evident in our channel checks (slowing industry growth and growing competition from local brands) which means execution is important and suggests a continued lift in marketing and investment in-store will be required by a2 Milk," the broker said.

[Balance]

duplicate duplicate

[Akane]

Meanwhile, Forbar has done some scouting around in China :

"There is nothing to change our view that the opportunity for the a2 Milk Co is material in offline channels in China, where it currently under-indexes, and we see a2 Milk as well-placed to continue to grow.

"However there are increasing headwinds evident in our channel checks (slowing industry growth and growing competition from local brands) which means execution is important and suggests a continued lift in marketing and investment in-store will be required by a2 Milk," the broker said.

Please correct me if I'm wrong, but does that sound like "Yeah we're gonna be rekt, but it's okay we're still doing ok, and we won't change the way we do things"?

[Joshuatree]

Yeah all bases covered ehh. What does rekt mean Akane?

[Joshuatree]

This website dying a slow death by a thousand cuts.

[aperitif]

A2M Takeover Target/Strategic Acquisition?

These are my notes and intended for my research purposes only

a2 is currently out of favour and has been punished by the market for a few reasons; management selling, lack of transparency re daigou/inventory/pricing, EBITDA margins, fourth downgrade, new CEO, stronger NZD, JH debacle, China tensions etc

Large multinational brands are struggling to sell infant formula into China and a2 will now be on their radar. Nestle, RB and Danone all mentioned in their earnings calls they are actively on the hunt for M&A opportunities as they are struggling to differentiate…

Rationale

· Li Xiao(China CEO) previously worked for Multinationals
· New Chinese board member (Bessie Lee)
· Board/Management haven’t bought(privy)/sold, PN has 800,000 shares expiring on 12 May 2021…
· New CEO David Bortolussi has a strong background in the consumer goods industry. He transformed Pacific Brands to be acquired by Hanesbrands where he took up the role as MD…
· CFO Race Strauss – 20 years at Unilever Australasia responsible for M&A etc
· No share buyback(privy)
· MVM acquisition – Supplier and geographic diversification, CAHG retain 25% interest and acquirer will get access to a world class facility in NZ
· Deep and long lasting relationship with China State Farm
· Key China Registrations (Dunsandel/MVM down the track)
· China Label is selling at ~40% pcp!
· Diversified into UHT Smart Nutrition and Full Cream 200ml offerings
· Institutions still holding a fair chunk of the register
· Stock price is trading at a two year lows

Nestle - Good strategic fit?

· Their a2 offering has had poor uptake in China, a potential scenario could be Nestle cease all a2 sales and take a strategic stake in a2(~15%) utilizing their large distribution network to push sales. Similar to when Coke purchased a stake in MNST.
· Starbucks/Nestle relationship. Oatly just signed nationwide distribution(USA) a2 something similar???
· Manufacturing capability and product innovation in the US

Interested to hear others thoughts. I have a few more notes regarding comparable valuations/premiums for those interested!

[Gerald]

Wouldn't be suprised if we saw something, after all Ballamys was something like 30x ebitda which makes atm look cheap.