ATM-A2 MILK

[KW]

https://en.wikipedia.org/wiki/Daigou

Doesnt apply to IF.  Physical travel works for those coming to buy thousands of dollars worth of luxury items (like handbags, clothes, watches, jewellery etc and is why all those luxury boutiques exist in places like NZ) but its not going to be profitable to pay for an airline fare just to stick a few tins of IF in your luggage.  Plus IF is not a one off purchase, its a regular purchase for several years - so who is going to rely on someone travelling to and from Australia to buy their IF for them?  Daigou for IF is far more commercial (as it has to be) and does not involve people smuggling it in their suitcases.  The majority of daigou in Australia operate through agents now, who organise the shipping, registration and taxes. 
 

[Left Field]

Adding to KW's comments, the following recent SMH article by Jessica Yun underlines the importance of the Daigou Channels for A2 Milk.

https://www.smh.com.au/business/companies/turning-a-corner-a2-milk-retargets-chinese-daigous-amid-134m-share-buyback-20220829-p5bdh4.html

[KW]

Adding to KW's comments, the following recent SMH article by Jessica Yun underlines the importance of the Daigou Channels for A2 Milk.

https://www.smh.com.au/business/companies/turning-a-corner-a2-milk-retargets-chinese-daigous-amid-134m-share-buyback-20220829-p5bdh4.html

As A2 is finding out, marketing is expensive when you have to do it yourself.  Far cheaper to let the daigou and agents like AZ Global do it for you.  The difference is having margins in the 30%+ range, or 13%.

[CG]

As A2 is finding out, marketing is expensive when you have to do it yourself.  Far cheaper to let the daigou and agents like AZ Global do it for you.  The difference is having margins in the 30%+ range, or 13%.

Interestingly that having AZ Global (Mr.Zhang) as A2 biggest daigou customer did not help them with their margin in FY21 which was 10%. So, I suspect it's not that quite simple.
Btw, not quite sure what this talk about daigou is all about. DB clearly stated they are all in favor of diagous. They just don't need ticket clippers like Mr.Zhang in the middle.

[Ferg]

Interesting.  So there is no link between the collapse in daigou sales and the closing of borders to travellers?

[KW]

Interesting.  So there is no link between the collapse in daigou sales and the closing of borders to travellers?

More that the borders closed and there were no international students or temporary migrants coming in (the usual source of daigou), while those in the country had to leave when they lost their job or their visa ran out (unlike NZ, Australia did not extend visas or provide welfare support to them). 

And of course, global shipping was completely disrupted and nobody wanted to buy IF if it took 3 months for it to arrive.  China was also claiming that covid was coming in on international goods so were holding them up in warehouses for months for "testing". Consequently demand from China dried up, along with those available to supply it. 

It remains to be seen if Chinese demand for imported IF will go back to what it was, now that they have had almost 3 years of buying domestic products.  A lot of the Chinese daigou in China switched from being sellers of imported IF to becoming social media influencers promoting domestic IF.

[CG]

More that the borders closed and there were no international students or temporary migrants coming in (the usual source of daigou), while those in the country had to leave when they lost their job or their visa ran out (unlike NZ, Australia did not extend visas or provide welfare support to them). 

And of course, global shipping was completely disrupted and nobody wanted to buy IF if it took 3 months for it to arrive.  China was also claiming that covid was coming in on international goods so were holding them up in warehouses for months for "testing". Consequently demand from China dried up, along with those available to supply it. 

It remains to be seen if Chinese demand for imported IF will go back to what it was, now that they have had almost 3 years of buying domestic products.  A lot of the Chinese daigou in China switched from being sellers of imported IF to becoming social media influencers promoting domestic IF.

I take it as you did not read a2's report and did not listen investor call and it looks like your "analysis" is based on media and analysts reports headlines at best

[KW]

I take it as you did not read a2's report and did not listen investor call and it looks like your "analysis" is based on media and analysts reports headlines at best

Or the reports of all the other listed ASX and US companies who utilise the daigou trade or are actual daigou

[CG]

Or the reports of all the other listed ASX and US companies who utilise the daigou trade or are actual daigou

Quite a few of your last posts were all about daigou. daigou this, daigou that. First you were implying not working with daigou is bad, now you are saying working with daigou is bad, be a daigou even worse (are you implying A2 is a daigou company, whatever that means?) and you are not interested in companies that work with them, which is kind of funny as you are a big fan of BUBS who is using daigou more than anyone. So, you invest in them and don't read their reports either? You need to make up your mind. But any way your reply just confirmed my suspicions that you have no clue about A2 milk.

[KW]

Quite a few of your last posts were all about daigou. daigou this, daigou that. First you were implying not working with daigou is bad, now you are saying working with daigou is bad, be a daigou even worse (are you implying A2 is a daigou company, whatever that means?) and you are not interested in companies that work with them, which is kind of funny as you are a big fan of BUBS who is using daigou more than anyone. So, you invest in them and don't read their reports either? You need to make up your mind. But any way your reply just confirmed my suspicions that you have no clue about A2 milk.

Where did I say that working with daigou is bad?  Or that I'm not interested in companies that use them?  I think your comprehension skills need some work mate. I understand A2 inside and out, have been a shareholder since they were 50c a share, and I sold A2 my shares because there are fundamental issues with A2 that have not been sorted out (related to both their product and their distribution) and these were visible long before Covid.  So yes, I've moved on to BUB. 

[winner (n)]

Quite a few of your last posts were all about daigou. daigou this, daigou that. First you were implying not working with daigou is bad, now you are saying working with daigou is bad, be a daigou even worse (are you implying A2 is a daigou company, whatever that means?) and you are not interested in companies that work with them, which is kind of funny as you are a big fan of BUBS who is using daigou more than anyone. So, you invest in them and don't read their reports either? You need to make up your mind. But any way your reply just confirmed my suspicions that you have no clue about A2 milk.

CG - you've just been 'told off' by KW - if I was you I'd take KW's comments on board

KW has been around for ages and is a very successful and respected investor - I've found it very useful listening to people like that.

[KW]

Interesting.  So there is no link between the collapse in daigou sales and the closing of borders to travellers?

I think the biggest problem with closing the borders and there being no tourist travellers was that shut down air freight as well.  No passengers means no planes, and no planes means no ability to air freight goods to customers.  Which is the kiss of death for a perishable product for a consumer that literally will die if their food doesnt arrive on time.  As China is still in its "zero covid" phase, I'm thinking that air traffic will still be down substantially, which means air freight availability is still limited. 

[Basil]

CG - you've just been 'told off' by KW - if I was you I'd take KW's comments on board

KW has been around for ages and is a very successful and respected investor - I've found it very useful listening to people like that.

+1.  This hound dog would think very, very long and very hard before taking the opposite side to any position KW takes.

[CG]

CG - you've just been 'told off' by KW - if I was you I'd take KW's comments on board

KW has been around for ages and is a very successful and respected investor - I've found it very useful listening to people like that.

Have you ever heard expression "You shall not make for yourself an idol"?

[CG]

Where did I say that working with daigou is bad?  Or that I'm not interested in companies that use them?  I think your comprehension skills need some work mate. I understand A2 inside and out, have been a shareholder since they were 50c a share, and I sold A2 my shares because there are fundamental issues with A2 that have not been sorted out (related to both their product and their distribution) and these were visible long before Covid.  So yes, I've moved on to BUB. 

Didn't you write "Or the reports of all the other listed ASX and US companies who utilise the daigou trade" on my statement that you did not read A2's report? Ignoring company's report is quite an interesting way to say - I'm interested in companies who work with daigou and analyze its business. My comprehension skills allowed me to build very successful career and retire at somewhat young age quite awhile ago and live on my investments. So, I'll keep it as it is for now.
"So yes, I've moved on to BUB" - does not look like since you are still hanging around