ATM - A2 Milk Corporation Limited

[MarineSalvage]

thanks Flying Lizard - very interesting

Many "hopes" from CEO during 1 hour investor recording, the management really does not know Daigou and Chinese customer consuming behaviour, the price war between individual Daigou, retail shops in NZ, Corporate Daigou since 2017/2018. Corporate Daigou is not as important as they used to be. Daigou only work for money and not for A2 brand solely. They will sell hundreds of different products across nations through Corporate Daigou ( many big ones are international logistic companies owned by local Chinese).

Before 2016/2017, everyone went to the supermarket or pharmacy to get the products and manually posted them to China.

After Wechat App developed the payment function. All shops, corporate daigou, and individual daigoy use its online system. The individual daigou does not purchase inventory anymore, instead they contact with shops, Corporate Daigou, or other individual daigous through Wechat to complete a real time purchase within 2 minutes. There are also other technology such as paywaves App between CNY and NZD/AUD used in shops or Corporate Daigou to provide convenient foreign exchange services.

The industry seemed to reach the peak since 2017/2018, lots of shops open, more students and travelers became Daigou. Capital and technology rushed in the sector. The price war started. The margin became less than before. Some daigou retired. Corporate daigou built some big custom bonded warehouse in China and created online platform and its own brand. Retailed daigou got squeezed out the market, because they only deal with relatives, friends or people referred by someone they know.

Now, Chinese people can buy cheap imported products through local supermarkets and shops, where the products are from duty free custom bonded warehouses. The purchasing power from retail daigou is shrinking.

We cannot say Covid -19 hit the daigou market, they still can place order through Wechat and other online systems, the money transaction system still there. The competition among the industry caused more pain to A2 than Covid effect.

However, after more than one year, the ATM management still talking about covid effect, rather than the competition and strategy change.

[BlackPeter]

Haha, doesn't matter BP, if you really know what sort of people did daigou, you will see the picture, rather than read such ABC articles. Mainstream Aussie and Kiwi don't do it. Only migrants do. And we know who did daigou in migrant community.

Not quite sure I get your point. What "sort of people" do you think did Daigou? Anybody living in Australia or New Zealand is a migrant or from a migrant family. This includes yourself and myself. Some of them (including international students, but as well most other Aussies and Kiwis of Chinese descent) speak Chinese. Some other people speak Chinese as well (well, I do : All of them could run the Daigou channels. Some do.

Not sure I get the point of your "Mainstream Aussie and Kiwi" comment? The families of some Chinese speaking Kiwis and Ossies arrived in their relevant destinations many generations ago ... are they not part of what you call "mainstream Aussie and Kiwi"?

Why?

... and why would anybody need to be part of your so called "mainsteam" (whatever you mean with that expression) to run the Daigou channel?

[Habits]

Same story happen to comvita as well?

Difference being that when CVT provides a market earnings update it is revised upwards such as on 13 April there was a greater than 10 percent UPgrade. ATM should take tips from CVT and learn how to do a proper update.

[silu]

At least some good news for holders. It is staying in the MSCI index for now.

[Snow Leopard]

...but as well most other Aussies and Kiwis of Chinese descent) speak Chinese. Some other people speak Chinese as well (well, I do...

You do know that 'Chinese' is not a single spoken language as such, but an umbrella 伞 term for a range of languages?

So you do not speak Chinese as such, probably Mandarin.

[BlackPeter]

You do know that 'Chinese' is not a single spoken language as such, but an umbrella 伞 term for a range of languages?

So you do not speak Chinese as such, probably Mandarin.

China is a country of many different languages ... that's the reason they introduced Mandarin to allow at least the bureaucrats (the mandarins) and the soldiers in the empire to communicate.

I don't think however the term "Mandarin" is these days still in use (hey, the Mandarins died out, didn't they)?

But yes, I do speak some 汉语 or (as they call it in the mainland) 普通话. This is what people used to call mandarin - and close enough to a generic "Chinese".

[Maxtrade]

Do you think there is any chance of ATM becoming successful again. Or is it a dream over hoping SP could work its way back up to where it was at $20. Hard to believe that SP has fallen off down to where it is now from where it was at the start of the year.

Seems to be finding some solid support above 6.1. Could this finally be the bottom and now get a bit of a more sustained progressive increase in SP going forth from here? Albeit a slow increase

[tommy_d]

Do you think there is any chance of ATM becoming successful again. Or is it a dream over hoping SP could work its way back up to where it was at $20. Hard to believe that SP has fallen off down to where it is now from where it was at the start of the year.

Seems to be finding some solid support above 6.1. Could this finally be the bottom and now get a bit of a more sustained progressive increase in SP going forth from here? Albeit a slow increase

sounds like the desperate hopeful plea of someone, like me, who tried to catch a falling knife, and now considering selling to staunch the bleeding.
I think you might gain value from re-framing your question. Do you think A2M is a good buy at current prices? if you didn't hold, and had never held, would you be considering buying in at current prices?

the way in which you have framed your question instead seems to seek a reason to hold and cross your fingers. Good luck, hope the bleeding hasn't been too bad, i'm down 60-ish percent on A2M, it's annoying, but probably needed a lesson, and i've got away with it fairly cheaply

in answer to your question. Sure, it could be the bottom. It could also, and seems more likely to me, be a brief plateau before a further fall.

[Balance]

... and why would anybody need to be part of your so called "mainsteam" (whatever you mean with that expression) to run the Daigou channel?

Anybody can be a daigou player but daigou works best if you are a mainland Chinese with good contacts in China who want to buy genuine or unobtainable products in NZ or Oz, and get you to buy said products for a fee on their behalf.

As in 代表 diabiao, according to my migrant Chinese friend in Hamilton who is in the daigou business. She specialises in high end products like Gucci, Loui Vuitton, Prada etc. Business was good until last year when orders dried up due to the pandemic. But starting to pick up again.

Then there’s my Chemist contact in Auckland who partners with several Chinese to supply and export all manner of health supplements, beauty & yes, infant formula products to China via the daigou channel. He is a third generation Kiwi of Scottish descent.

Then there’s the corporate daigous so big that they ship products by the tonne to China and obtain their supply directly from the suppliers/manufacturers. One of the corporate daigou in Auckland had a supermarket owner as a partner.

Trust the examples give those still hazy about Daigou a better idea.

[dreamcatcher]

UBS still a BUY .....Valuation: $13.50/share (was $15.50) in 12 months' time

Risk/reward improved with possible T/O target ?