ATM - A2 Milk Corporation Limited

[Bikeguy]

What if Synlait goes into receivership, its plant that produces A2 infant formula is sold to someone else, and A2M does not have sufficient IF cans to sell to China?

Yes, agreed, thats kind of why I’m surprised at the level of lift and consistency lately…

I just didn’t envisage this type of movement without the supply situation being suitably sorted…maybe it is?

Cards surely have to be turned over sooner rather than later….

[Mrbuyit]

Probably making more money from thier massive pile of cash ( its something like 800m isnt it?)than they are from selling milk powder?

[Bikeguy]

Probably making more money from thier massive pile of cash ( it’s something like 800m isnt it?)than they are from selling milk powder?

So true, must be making a mint at the moment with the high interest rates!!

[Baa_Baa]

Probably making more money from thier massive pile of cash ( its something like 800m isnt it?)than they are from selling milk powder?

At roughly 6% interest on $800m, the interest earned would be about 3% of sales revenue. So it would be far more sensible to deploy that capital into something productive

[Mrbuyit]

For sure the revenue number at ~800m blitzes the potential interest earnings, but i think total profit for last 6 months reporting period was something like 85M?

[Bikeguy]

At roughly 6% interest on $800m, the interest earned would be about 3% of sales revenue. So it would be far more sensible to deploy that capital into something productive

Like purchasing SML?

[sb9]

At this we could see sp in double digits veru soon. That’ll be some turnaround lead by DB, if it indeed happens.

[aperitif]

Data and trends

In the first quarter of 2024, maternal and infant consumption data were released, and online sales of milk powder increased by 10.6% year-on-year.Recently, Magic Mirror Insight officially released the White Paper on New Consumption Potential in the First Quarter of 2024 (hereinafter referred to as the White Paper). In the white paper, the consumption trends and data of maternal and infant categories in the first quarter are disclosed in detail. In the first quarter of 2024, the online sales of the infant milk powder market reached 10.6 billion yuan, with sales increasing by 10.6% year-on-year. At the same time, the online sales of the infant diaper market and the infant nutrition market also maintained a growth rate, and the online sales of infant nutrition products reached 2.7 billion yuan, a year-on-year increase of 16.5%.

http://myguancha.com/post/23510.html

[billkiapi]

Like purchasing SML?

That will change dynamics quite a bit. A2M is a business that has been built off contract manufacturing- essentially outsourcing capital risk of product plants, and outsourcing production and supply risks (fixed/variable cost issues). It's helped A2M amass a huge cash pile.

Buying SML makes a whole lot of vertical integration sense, but they'll quickly need to build production management talent in house. A well run production plant is a wonderful thing, but it's easy to have a badly run production plant which sucks cash out of the business.

[Bikeguy]

That will change dynamics quite a bit. A2M is a business that has been built off contract manufacturing- essentially outsourcing capital risk of product plants, and outsourcing production and supply risks (fixed/variable cost issues). It's helped A2M amass a huge cash pile.

Buying SML makes a whole lot of vertical integration sense, but they'll quickly need to build production management talent in house. A well run production plant is a wonderful thing, but it's easy to have a badly run production plant which sucks cash out of the business.

This is such an interesting situation, both parties effectively need to maintain relationships with each other going forward ?(Bright &A2)