ATM-A2 MILK

[Left Field]

Naaiiice....

FDA Developing New Framework for Continued, Expanded Access to Infant Formula Options for U.S. Parents and Caregivers

https://www.fda.gov/news-events/press-announcements/fda-developing-new-framework-continued-expanded-access-infant-formula-options-us-parents-and

[kasper]

Naaiiice....

FDA Developing New Framework for Continued, Expanded Access to Infant Formula Options for U.S. Parents and Caregivers

https://www.fda.gov/news-events/press-announcements/fda-developing-new-framework-continued-expanded-access-infant-formula-options-us-parents-and

Has potential but A2 are yet to even get in on the action, there are so many other players who already have a slice of the pie you would have to wonder how much would be in it for A2 with a pie sliced into such a large number of pieces. I reckon A2 has lost its disruptive ability and influence since Covid and has had its glory days.

[Left Field]

Still early days on the USA market Kasper....

ATM has established a sound USA foothold but their Mataura Plant still has to come up to scale.

They clearly need to diversify away from too much reliance on China.

Ssooo let's hope the ATM team have a cunning plan up their sleeves.

[kasper]

Still early days on the USA market Kasper....

ATM has established a sound USA foothold but their Mataura Plant still has to come up to scale.

They clearly need to diversify away from too much reliance on China.

Ssooo let's hope the ATM team have a cunning plan up their sleeves.

So much time to jump back on this one once it gets back on track although I have over 2 million reasons and some lifetime scars as to why I might not want to.

[KW]

Naaiiice....

FDA Developing New Framework for Continued, Expanded Access to Infant Formula Options for U.S. Parents and Caregivers

https://www.fda.gov/news-events/press-announcements/fda-developing-new-framework-continued-expanded-access-infant-formula-options-us-parents-and

Well that changes everything!  Although maybe not for A2 LOL.  But for Bubs definitely maybe.  Although there is still a risk that the expanded import ability is limited to the big internationals, like Danone/Nestle and the US companies that have offshore manufacturing plants. 

[Basil]

Trading on 32.8 times estimated FY22 earnings.  https://www.marketscreener.com/quote/stock/THE-A2-MILK-COMPANY-LIMIT-11384022/financials/
Market seems to be saying they will enjoy a strong rebound in sales and margins in the years ahead but what if those expectations aren't met ?

[Minimoke]

Still early days on the USA market Kasper....

ATM has established a sound USA foothold but their Mataura Plant still has to come up to scale.

They clearly need to diversify away from too much reliance on China.

Ssooo let's hope the ATM team have a cunning plan up their sleeves.

most US supermarkets I have been into have a2. If I could post an image off my phone without dropping it into some other website i would show you what it looks like.

[Minimoke]

Further to my US observations. A2  has a few products on the shelf. At eye level. Very important! Great placement. One store had "half and half" being promoted at us$4.99. More expensive than other surrounding products.

It's in cabinets chock full of many other products so I am very pleased to see its position on the shelf.

Haven't found the Hershey one yet.

[Left Field]

Bloomberg reporting today.... "Baby Formula shortage worsens as stocks fall more than 60% in some states."

C'mon ATM.

[kasper]

Bloomberg reporting today.... "Baby Formula shortage worsens as stocks fall more than 60% in some states."

C'mon ATM.

Care A2+(Australia) has just been given approval to supply 4.875 mill cans in August, A2M seems to be behind the 8 ball on this one and remember its only temporal until November.

[Mafman]

But remember people, we're not submarine partners with the US. Of course the Aussie companies will get first dibs.

[Golfer01]

It is frustrating waiting for FDA approval. Their application has been in for several weeks so it can only be a matter of days before it is granted. I'm not aware of the approval process but maybe the reason for the length of time is due to the product being produced by a 3rd party (Synlait)? I also agree that there is likely to be a priority list given to the producers who have closer political ties. I feel A2 will be very keen to establish a market in USA as this would be an ideal market for IF produced at MVM (once the canning line is up and running) as they won't be able to send their IF produced at MVM to China until site registration is approved and that could take years... It appears demand is very strong in China and daigou trade is quickly improving in Australia (evident by the manufactured dates on the tins being only a few weeks old). I also think that they'll "starve" the Ozzie market to a degree. They have establish a strong market with direct sales and supply lines to China which gives them transparency and greater market understanding. Subsequently they won't want to bastardise that and revert to their old business model of sending a large percentage of their production to Ozzie and ending up not really knowing what is happening with it. I would also be confident that direct sales in China would be more profitable. IMO.

[Ferg]

It appears demand is very strong in China and daigou trade is quickly improving in Australia (evident by the manufactured dates on the tins being only a few weeks old). I also think that they'll "starve" the Ozzie market to a degree. They have establish a strong market with direct sales and supply lines to China which gives them transparency and greater market understanding. Subsequently they won't want to bastardise that and revert to their old business model of sending a large percentage of their production to Ozzie and ending up not really knowing what is happening with it. I would also be confident that direct sales in China would be more profitable. IMO.

You raise some good points.  Where did you get the relatively new dates on the products - from a friend or was that your own observation?  I have also stated elsewhere that relying on individuals taking their product into China in their personal luggage does not seem like a sustainable strategy.  In light of what happened with the daigou / lockdown fiasco, it would be good to see ATM emerge a better business with more sustainable sales channels and being closer to their market / clients.

[Shareguy]

Are things looking up for A2? Time to buy?

I'm reading about empty shelves in Australia for A2. Bubs saying strong growth in China and yes the Daigou is back. Even a shortage possibly looming in the UK for farm products due to lack of staff.

Possibility of FDA approval in the states. If successful will it be a short term thing or something bigger? A2 is already supplying 27000 stores (according to Craigs) with fresh milk , so have a possible easy entry point with existing distribution channels.

A profitable company with plenty of cash.

A lot to like or is it just those "rose tinted glasses"

[BlackPeter]

Good question. I guess they clearly had an amazing hype deflation over the last two years. Difficult to say whether they are already at the bottom - their fundamentals still don't look cheap if I try to rate them based on analysts forecasts.

On the other hand - it is one of these companies very difficult to value. Sure - lots of revenue and their revenue CAGR still looks good and might well suprise, but lets face it - revenue is not what investors are living from - at the end it is only the bottom line which counts.

While the bottom line is black (well, just), it doesn't look flash, and whether they will manage to sell in future enough of their white powder for a healthy margin without losing this money again in some logistical or in some geopolitical hiccup? Who knows?

Sure - people always will need food, but do they really need for their babies some top premium A2 milk formula (which may or may not be better than other milk formula) or will it be more important for them to fill their (and their childrens) bellies with some local food they can afford? 

I suspect that the demand for NZ based A2 formula in the Eastern Ukraine is currently limited, and so it will be in central Africa. I hear as well the Chinese are losing money while their real estate bubbles are deflating and their Covid lockdowns are ongoing (i.e. many won't feel as wealthy anymore). Just imagine these poorer (China) and starving areas (Africa, Eastern Europe, parts of Asia) growing ... and the rich areas where parents can afford to burn money for hyped up baby formula are shrinking.

Are these really ideal business conditions for A2M? I don't know ....