ATM - A2 Milk Corporation Limited

[winner69]

Re Credit Suisse and their own woes and headaches, you be the judge...

https://www.bbc.com/news/business-56841945.amp

https://www.efinancialcareers.com/ne...nvestment-bank

https://www.wsj.com/amp/articles/cre...es-11619256601

Sorry for topic digression however relevant in light of above.

OK - by association CS analysts useless then?

[sb9]

OK - CS analysts useless then?

I’m not endorsing that viewpoint, but important for people to be in the know in wider scheme of things and make their own judgment.

[whatsup]

When the so called experts say, declining birth rate, at what % is it declining anything, less than 10% I would say because of the population would be meaningless, come on experts numbers and sources please? .

[ratkin]

When the so called experts say, declining birth rate, at what % is it declining anything, less than 10% I would say because of the population would be meaningless, come on experts numbers and sources please? .

It all a red herring anyway. Just a device used by down rampers to make the picture look as bleak as possible. Reality is a small change in birthrate is the last thing holders need to be worrying about.

[whatsup]

It all a red herring anyway. Just a device used by down rampers to make the picture look as bleak as possible. Reality is a small change in birthrate is the last thing holders need to be worrying about.

B!00dy downrampers/shorters will try any trick, I guess that they are making up now for the hundreds of millions that they lost on the way up.

IMHO its all about picking the bottom now as it will rise again, always the potential for someone to have a crack at getting a 10% stake, then its game on !!

[BlackPeter]

When the so called experts say, declining birth rate, at what % is it declining anything, less than 10% I would say because of the population would be meaningless, come on experts numbers and sources please? .

It all a red herring anyway. Just a device used by down rampers to make the picture look as bleak as possible. Reality is a small change in birthrate is the last thing holders need to be worrying about.

B!00dy downrampers/shorters will try any trick, I guess that they are making up now for the hundreds of millions that they lost on the way up.

IMHO its all about picking the bottom now as it will rise again, always the potential for someone to have a crack at getting a 10% stake, then its game on !!

Amazing what the endowment effect can do to peoples judgement and social behavior ...

Anyway - good luck to all hodlers :

[Balance]

English label stage 3 A2 IF sale at 215RMB, Chinese label sale at 380 RMB. Normally English label IF is more expensive so I think these are to expire thus they have to sell at discount.

Now Chinese label stage 3 A2 IF is the most expensive one among the same products at JD.com.

They had a huge pile of stock to quit didn't they

Hope it's moving ...at any price

Anybody know how much surplus stock there was

A few comments regarding the two postings above :

1. Discounting

More than a year after the massive stock-up by the daigou channel to capitalize on the likelihood of ramp up in demand from China because of the covid lockdowns, we now see the aftermath of that stock-up in the massive discounting of A2 IF in the China market as expiry dates loom.

Clearly a case where the huge expectations of demand have failed to not only materialize but of greater concern, excess supply has obviously overwhelmed whatever demand there is there.

The daigou channel is getting its backside burnt big time with this kind of massive discounting and ATM's premium positioning will be taking a beating imo. Implications :

1. Going to take the daigou channel a lot longer to recover,

2. ATM is going to have to spend a lot to burnish the premium positioning.

It has been more than 7 months after the first profit downgrade (overstocking situation and dropping demand) when ATM becomes aware of the problem - it's clear that the company had no handle on just how bad the situation was and still is.

So yes, a fourth downgrade is looming - not just for F21 but for F22 as well imo.

2. Stock Levels

The half years results to 31 Dec 2020 paint a very grim picture of just how bad ATM's systems were in not quantifying the overstocking situation out there, or more to the point - how sharply sales have fallen off the face of the cliff!

Total sales dropped by $128m (16%)

but

inventories increased $51m (35%) or $75m (51%) when the $23m stock write-off is taken into consideration.

With the panic discounting happening per 1 above, it looks like stock has not been moving out there - the last two downgrades (after the first) attest to that in any case.

To make the picture of even greater concern, note that inventories were $118m as at 31 Dec 2019 vs $198m as at 31 Dec 2020 (or $222m per stock write off) - a doubling of stock levels!

Synlait's announcement puts the stock situation in perspective - ATM is still grappling with poor MIS about real sales levels out there.

The new CEO will be grappling with all that as he formulates his strategy - let's see what he comes out with.

[Lease]

A few comments regarding the two postings above :

ATM's premium positioning will be taking a beating imo.

So how do you explain A2 Chinese label stage 3 IF is still the most expensive one among the same products, ie, A2 IF from Nestle, Bellamy,etc?

[winner69]

Down another 1% plus on ASX today

[Balance]

So how do you explain A2 Chinese label stage 3 IF is still the most expensive one among the same products, ie, A2 IF from Nestle, Bellamy,etc?

Does not mean that its premium positioning is not taking a beating - ultimate proof will be sales numbers.

When China consumers can get the genuine NZ product, shipped all the way from NZ to their door, at over 40% discount - what does that say about the advertised China label price?