ATM - A2 Milk Corporation Limited

[winner69]

morbid fascination as to how expensive 'strategic' reasons by investing in similar companies

A2 have paid $288m for their interest in Synlait - now worth $140m ..... 'strategic' reasons worth it

Goodness knows what $270m into MVM is going to bring

Maybe it's a case having too much cash burning holes in pockets - or Babidge's follies

[Master98]

looks like MVM is a black hole, loss maker, expect back to positive EBITDA FY25, they buy this plant just want to maintain good relationship with china partner.

i quote my own post.

[Arbroath]

FWIW I'll have a stab at FY22 even though management are too scarred to attempt it publicly (actually think David wants to preserve his credibility for when they make a FY23 forecast next year)

H1 Revenue $600-625m + c. $40m for MVM = $640-665m (in keeping with marginally lower guidance but is actually about a 10% fall in core revenue on H1 '21)
H2 Revenue $650-675m + c. $40m for MVM = $690-715m (in keeping with significantly higher guidance for H2 and is a decent uplift in core business on H2 '21)

Total Revenue $1.33-1.38b (about a 5-8% revenue uplift on FY21 excluding MVM)
Ebitda margin around 20% so $260-275m ebitda
Npat around $160-170m after higher tax rate of c. 38%
EPS c. 19 cents per share = PE of 32 at $6.08. Ex-cash PE is c. 27x and Ex-MVM and US losses the core business PE still about 20x

The real action though is around whether they can demonstrate that momentum is building for FY23 to be the real recovery year. Valuations on FY22 earnings aren't that material to me. If they tangibly start to turn this around then they'll recover to $9-10 pretty fast once that is apparent. If not, they'll head towards Beagle's PE based valuation in the $4 range.

[winner69]

Arbroath - for what's it worth my calculated guess for F22 sales is 1,360m

some 660m in H1 and 700m in H2

Not as optimistic as you re npat - my calc said about 130m or eps 17.5 cents .... current PE 34

I think we are both about right --- a bright future built into current share price (or a big takeover premium)

[couta1]

There was an article in the Herald today titled, Dont retire poor-How to avoid hardship in your twilight yrs. My first thought was dont invest in the A2 milk company as it has been one of the greatest examples of wealth destruction you will ever see, great for the few early investors but between the current price and $21 some serious damage has been done to punters financial status to varying degrees including instos like Blackrock who bought around double the current price plus some. Manipulating/gameplaying instos like UBS and Citi have probably done pretty well with their shorting operation but the vast majority have been losers for sure.
I sold my latest holding after reading the report(Yes for a good sized loss) I thought it was the most uninspiring/flat/ stale old cracker report I'd read in ages.
Holding and waiting for a T/O was the only reason to keep holding and I decided against that as it will probably never happen but might be wrong.
Of course go big or go home types like myself go down hardest but it is what it is.
I don't know where the sp is heading over the next year but its road back to $21 I doubt will ever happen, should get back to double digits if things go well but as one of the most staunch holders/traders of the stock since 2013 im out for good, even my extremely frugal lifestyle is no match for the damage this thing can do.

[Master98]

There was an article in the Herald today titled, Dont retire poor-How to avoid hardship in your twilight yrs. My first thought was dont invest in the A2 milk company as it has been one of the greatest examples of wealth destruction you will ever see, great for the few early investors but between the current price and $21 some serious damage has been done to punters financial status to varying degrees including instos like Blackrock who bought around double the current price plus some. Manipulating/gameplaying instos like UBS and Citi have probably done pretty well with their shorting operation but the vast majority have been losers for sure.
I sold my latest holding after reading the report(Yes for a good sized loss) I thought it was the most uninspiring/flat/ stale old cracker report I'd read in ages.
Holding and waiting for a T/O was the only reason to keep holding and I decided against that as it will probably never happen but might be wrong.
Of course go big or go home types like myself go down hardest but it is what it is.
I don't know where the sp is heading over the next year but its road back to $21 I doubt will ever happen, should get back to double digits if things go well but as one of the most staunch holders/traders of the stock since 2013 im out for good, even my extremely frugal lifestyle is no match for the damage this thing can do.

Hi couta1, look forward and put this behind.

[couta1]

Hi couta1, look forward and put this behind.

For sure mate, its been a year from Hades to say the least and a lesson for others I guess that all that glitters doesn't always glitter.

[flyinglizard]

Two questions:

- For China label section, the FY21 annual report shows that the first time, H1 sales are more than H2 (page 13.) that implies the China label sales could be slowing down too (the historical data shows H1 sales normally lower than H2)


- AFTER ACQUIRISION OF MVM, the depreciation of plants and equipment nearly double due to increase in fixed assets items, in accounting terms that it will looks bad for NPAT. Not sure the amount, coz we do not know the fixed assets of MVM. Anybody know what the depreciation amount for H1 FY22?

[flyinglizard]

FWIW I'll have a stab at FY22 even though management are too scarred to attempt it publicly (actually think David wants to preserve his credibility for when they make a FY23 forecast next year)

H1 Revenue $600-625m + c. $40m for MVM = $640-665m (in keeping with marginally lower guidance but is actually about a 10% fall in core revenue on H1 '21)
H2 Revenue $650-675m + c. $40m for MVM = $690-715m (in keeping with significantly higher guidance for H2 and is a decent uplift in core business on H2 '21)

Total Revenue $1.33-1.38b (about a 5-8% revenue uplift on FY21 excluding MVM)
Ebitda margin around 20% so $260-275m ebitda
Npat around $160-170m after higher tax rate of c. 38%
EPS c. 19 cents per share = PE of 32 at $6.08. Ex-cash PE is c. 27x and Ex-MVM and US losses the core business PE still about 20x

The real action though is around whether they can demonstrate that momentum is building for FY23 to be the real recovery year. Valuations on FY22 earnings aren't that material to me. If they tangibly start to turn this around then they'll recover to $9-10 pretty fast once that is apparent. If not, they'll head towards Beagle's PE based valuation in the $4 range.

The revenue is still going down, they have more inventory to write down during H1 FY 22. MVM plants and equipment depreciation!!! and China label sales slow down !!! you cannot ignore the higher and higher shipping cost, COGS will be higher and marginal cost higher.

[aperitif]

There was an article in the Herald today titled, Dont retire poor-How to avoid hardship in your twilight yrs. My first thought was dont invest in the A2 milk company as it has been one of the greatest examples of wealth destruction you will ever see, great for the few early investors but between the current price and $21 some serious damage has been done to punters financial status to varying degrees including instos like Blackrock who bought around double the current price plus some. Manipulating/gameplaying instos like UBS and Citi have probably done pretty well with their shorting operation but the vast majority have been losers for sure.
I sold my latest holding after reading the report(Yes for a good sized loss) I thought it was the most uninspiring/flat/ stale old cracker report I'd read in ages.
Holding and waiting for a T/O was the only reason to keep holding and I decided against that as it will probably never happen but might be wrong.
Of course go big or go home types like myself go down hardest but it is what it is.
I don't know where the sp is heading over the next year but its road back to $21 I doubt will ever happen, should get back to double digits if things go well but as one of the most staunch holders/traders of the stock since 2013 im out for good, even my extremely frugal lifestyle is no match for the damage this thing can do.

Emotion, be it fear or greed, is the greatest enemy of the ordinary investor

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