ATM - A2 Milk Corporation Limited

[Biscuit]

Maybe dont want to waste good money to buy their worthless shares ...lol

lol, that would show an unusual amount of good judgement on their part.

[Hoop]

I know ...U r right about results ...but like u said for ZEL ..." Where there is smoke ...there is fire too " So maybe signs of that fire keeping shorts at bay .

Also u r a seasoned markets player ...U know markets look at least 6 months ahead and normally stock bottoms much before business bottoms ...so maybe ATM bottomed last June around 5.40 ...

DISC: Very small position taken today morning for entertainment purposes only ...after all stuck inside ...Lockdown fatigue

ASX opening neutral..not negative...so behaviour has not changed..Price NZ6.52 down NZ63c -8.8%...No major technical breaks so I'm taking the odds of this 3 month rally continuing is getting better as the day progresses..

Putting more money where my mouth is...accumulated a small parcel just now.

[Balance]

lol, that would show an unusual amount of good judgement on their part.

Maybe they will use the cash to buy Nestle A2 milk business for $500m?

[flyinglizard]

Maybe dont want to waste good money to buy their worthless shares ...lol

But I found some good spots in its reports........ The turning point may be Q1 22 after all aging English label inventory gone.

I am just complaining that the two key drivers they do not deliver.

[alokdhir]

But I found some good spots in its reports........ The turning point may be Q1 22 after all aging English label inventory gone.

I am just complaining that the two key drivers they do not deliver.

If u r right that business turning point maybe Q1 22 then Hoop is right that stock bottomed around 5.40 in June last ...

I agree with Hoop ...more chance of it going up ahead then down ...Maybe will follow Hoop to actually see while holding some !!!

[Balance]

One analyst’s takeaway regarding revenues :

‘Overall, the company is expecting first half revenue to be marginally lower than the prior corresponding period. Though, this includes revenue from the acquired Matura Valley business.’

Lower revenues, lower margins and increased marketing, promotion and distribution expenses - analysts are going to be taking a knife to their current forecasts.

[Ferg]

For what it's worth, normalised earnings was 23.3c per share. Normalised earnings being NPAT and adding back the after tax effect of the stock write down of $108.6m, one-off MVM acquisition costs of $10.4m and one-off software costs of $9.7m.

Comprehensive income was savaged by the SML revaluation of -$134m resulting in an overall comprehensive loss of $53m for the year, hence the slight reduction in NTA versus last year.

H2 was an operating loss (EBIT) of -$57.8m but this was negatively impacted by the 3 items previously mentioned. Adjusted EBIT (adjusted for the 3 items above) was $46m for the half versus $175m (unadjusted) for the previous half. This was impacted by:

• lower sales & adjusted COGS for less GM of $86m (note: only $85m of the $108m stock provision was in H2, note also H1 was not adjusted for its stock provision)
• an increase in marketing costs of $33m versus H1
• an increase an adjusted admin costs of $8m (insurance?)

ATM is priced like a growth stock but it's hard to see growth in FY22 given the run rate on the revenue lines for H2 versus H1. Although I haven't compared H2 revenues by line to H2 last year.

Maybe the market is pricing in growth for FY23.

[Getty]

Maybe they will use the cash to buy Nestle A2 milk business for $500m?

Very suspocitive!

[Maxtrade]

Only buyers today will be short covering.

Tomorrow is when sp is going to get another big leg down imo after brokers and analysts do their downgrades and recommendations.

I was wondering why we haven't seen the ASX dive further. That would make sense. So likely to see the ASX drop more tomorrow then?

[Beagle]

Good analysis Ferg. More stock write-downs to come.
I've been an accountant for 40 years now, (yeah even I find that hard to believe). I have consistently seen that the very best guide to the near future financial performance is the most recent financial performance so the 2H adjusted profit of only $46m makes for a very sobering prognosis going forward.

Who knows what FY23 will bring, (really its a lottery), but I think they will do well to earn 20 cents per share for FY22, (I am very skeptical they can do that). I think people still paying a PE of around 30 are very, very "brave". I think the daigou channel is ostensibly dead and buried.

Very good stock to short, in my opinion.