ATM-A2 MILK

[BlackPeter]

China, being China, I suspect will start enforcing an increase in birth rate. They are far forward looking enough to know that things won't pan out well in 60 years time with a large aged population with few young ones to support it.

I suspect they managed to demonstrate already that they are not forward thinking. Their female population in reproductive age is already ways to small to turn the trend and keeps rapidly decreasing, and Chinese women have anyway very little reasons to get married and to get children. They are all from the princess generation ... too selfish to look after children, and on top of that is there little or no social security for a woman in China who does look after children instead of having a job. Ongoing sexism on the job creates additional hurdles for women with gaps in their careers.

Demographic:
https://en.wikipedia.org/wiki/Demographics_of_China

Jeez - I see fertility in China is currently at 1.08 children per woman ... and they would need 2.1 to keep the population at least constant (i.e. they would need to double fertility to stay still). Their sex ratio at birth does not help either - 111 boys to 100 girls. I am wondering how this will help them to increase the future birthrate ...  maybe they order in future men to carry the babies?

I guess at least they can act as deterring example to the rest of us and demonstrate how not to manage the big coming population decline which all countries will see over the coming 50 years. 

Remember - peak population for the globe is around 2050 ... thanks to Africa still growing. The rest of the world is declining - just not as fast as China is.

As KW would say - time to invest in funeral homes instead of baby milk.

Anyway - too late for the empire of the middle - they screwed it up in the 1970'ies with their one child policy. Not a lot they can do now to fix their mistakes 2 generations later. A ways too small cohort of women and most of them already too old to reproduce does not augur well for population development.

[Minimoke]

I suspect they managed to demonstrate already that they are not forward thinking. Their female population in reproductive age is already ways to small to turn the trend and keeps rapidly decreasing, and Chinese women have anyway very little reasons to get married and to get children. They are all from the princess generation ... too selfish to look after children, and on top of that is there little or no social security for a woman in China who does look after children instead of having a job. Ongoing sexism on the job creates additional hurdles for women with gaps in their careers.

Demographic:
https://en.wikipedia.org/wiki/Demographics_of_China

Jeez - I see fertility in China is currently at 1.08 children per woman ... and they would need 2.1 to keep the population at least constant (i.e. they would need to double fertility to stay still). Their sex ratio at birth does not help either - 111 boys to 100 girls. I am wondering how this will help them to increase the future birthrate ...  maybe they order in future men to carry the babies?

I guess at least they can act as deterring example to the rest of us and demonstrate how not to manage the big coming population decline which all countries will see over the coming 50 years. 

Remember - peak population for the globe is around 2050 ... thanks to Africa still growing. The rest of the world is declining - just not as fast as China is.

As KW would say - time to invest in funeral homes instead of baby milk.

Anyway - too late for the empire of the middle - they screwed it up in the 1970'ies with their one child policy. Not a lot they can do now to fix their mistakes 2 generations later. A ways too small cohort of women and most of them already too old to reproduce does not augur well for population development.

Its China. Get married, have babies or miss out on things.

Time to invest in foods for an aging population.

[BlackPeter]

Its China. Get married, have babies or miss out on things.

Time to invest in foods for an aging population.

I guess the data disagree with your statement. Time for an alternative reality?

[Minimoke]

I guess the data disagree with your statement. Time for an alternative reality?

The data is backward looking. I'm talking about future demographic policy.

[CG]

Yes, but remember ... in the relationship between amazon and A2M is A2M only a powerless minnow without any lever to negotiate.

They used to sell A2 Platinum for something like NZD 50 in China. Now I see you can buy the tin at amazon for  for USD 19.99 (i.e. NZD 32.75), and of that amazon will still take a nice bite.

I am wondering what this will do to their (well, A2M's) margins ... ?

Anyway - anything which stemms inflation must be good for the economy. Great A2M is doing this service for all of us ...

If A2M is a powerless minnow, what you will say about other 99% of sellers on Amazon then? I'm not sure if you know but Amazon is a market place where pretty much anyone can sell their stuff without need of special relationship with them. Yes, Amazon get their commissions but this is how it works.
If you are wondering about A2M's margins you might want to compare products of similar sizes at least. Comparing price of 900g tin to 400g tin won't help. A hint for you 900g tin on Amazon priced at US$39.99 (NZ$65.51). So, you might need to check your math again.
Btw, a2 platinum on Amazon is not really a news those who follow the company know it was available there for at least couple of months.

[CG]

Its quite amazing to think that China's birth rate has halved since 2016.  And 2023 is the second year where total population has fallen.  Maybe they will soon be looking to import people rather than export them as they do now.  All those girls going overseas to study won't be helping their fertility rate. 

• China's population drops 0.15% y/y in 2023
• Birth rate at new low, death rate at highest since 1974
• Total new births drop 5.7% to 9.02 mln
• Total deaths rise 6.6% to 11.1 mln

Yep, I've heard that almost all girls left China now. That is why boys have to marrying holograms. They have so many holograms now it helped to increase their marriage statistics. The only question I have will those hologram's babies need infant formula?

It surprises me how people in NZ hate their home grown businesses, always trying to undermine and devalue them. Only to realize the loss when some offshore entity come and buy it out for pennies.

[KW]

Yep, I've heard that almost all girls left China now. That is why boys have to marrying holograms. They have so many holograms now it helped to increase their marriage statistics. The only question I have will those hologram's babies need infant formula?

Currently 60% of Chinese international students are female.  I'll bet that the more the CCP tries to pressure them into marrying and having babies (eg. by wielding the social credit regime against them if they dont) the more that they will flee to other countries, either under the guise of studying, or by simply getting an overseas work visa.

[CG]

Currently 60% of Chinese international students are female.  I'll bet that the more the CCP tries to pressure them into marrying and having babies (eg. by wielding the social credit regime against them if they dont) the more that they will flee to other countries, either under the guise of studying, or by simply getting an overseas work visa.

You think as a truly western person. The thing is it's quite far from reality. I don't want to generalize, but over the years I met quite a few Chinese people here in NZ, most of them came here because they wanted to have bigger family (it was before China removed one child policy) and pretty much all of them had at least 2 children. Saying that these people had and maintained very strong connections to their families back in China. Some of them as far as I know now moved their families back to homeland.

[BlackPeter]

...
 A hint for you 900g tin on Amazon priced at US$39.99 (NZ$65.51). So, you might need to check your math again.

Fair enough ... I didn't realise that Synlait is now filling two different sizes of tins. Not sure this is an improvement, though. Last time I visited their line in Dunsandel they hardly managed to cope with one tin size. Maybe this (adding complexity to their production line) is the reason they had so many production problems over the last year as ATM claims?

But I guess, if they kill these margins internally it must be ok  ...?

[BlackPeter]

...
It surprises me how people in NZ hate their home grown businesses, always trying to undermine and devalue them. Only to realize the loss when some offshore entity come and buy it out for pennies.

Your language gives you away. Holder who did fall in love with their holding? Legitimate criticism has nothing to do with hate ...

NZ grown? Maybe. But I assume you realise that ATM as well as many of its holdings do have deep Chinese connections? Obviously - nothing wrong  with that, it is just, that their interests are for some time not any longer aligned with the interests of NZ retail investors. Given as well that A2M (with a strong Chinese cornerstone shareholder) and SML (in practical terms majority controlled by China - City of Shanghai holds more than 40% and A2M (with Chinese influences) makes up the balance to over 50%) seem to try to destroy each other in the public forum (or at least performing an amazing show fight) makes one wonder who is hating whom.

I assume the A2M Chinese and the SML Chinese don't hate each other, which makes me wonder why A2M and SML perform this amazing value destructing spectacle. Clearly not in the interest of any retail share holder, isn't it?

No matter how NZ retail shareholders feel about any of these companies, they might be better off to keep away while the dragons wrestle  ... too difficult to make money if the boards interests are clearly not aligned with the interests of the retail shareholders.

[KW]

You think as a truly western person. The thing is it's quite far from reality. I don't want to generalize, but over the years I met quite a few Chinese people here in NZ, most of them came here because they wanted to have bigger family (it was before China removed one child policy) and pretty much all of them had at least 2 children. Saying that these people had and maintained very strong connections to their families back in China. Some of them as far as I know now moved their families back to homeland.

There will always be people who want a big family, but there are now more people who don't want any children.  The birth rate has more than halved in China since 2016 despite being allowed (and encouraged) to have 3 children.  Attitudes have shifted, its not 2016 any more, and the ones that are in NZ with large families are clearly not representative of China as a whole.   Once they might have shifted countries to have more children, now they might shift countries to avoid having children.

Asian countries have the worst fertility rates in the world.  Look at Japan.  Taiwan, Singapore, Hong Kong, and Macau.  South Korea now has a fertility rate of 0.7.  I'd say this is actually more of an Asian thing than it is a western thing.

https://www.statista.com/statistics/268083/countries-with-the-lowest-fertility-rates/

https://time.com/6488894/south-korea-low-fertility-rate-trend-decline/

[CG]

Your language gives you away. Holder who did fall in love with their holding? Legitimate criticism has nothing to do with hate ...

NZ grown? Maybe. But I assume you realise that ATM as well as many of its holdings do have deep Chinese connections? Obviously - nothing wrong  with that, it is just, that their interests are for some time not any longer aligned with the interests of NZ retail investors. Given as well that A2M (with a strong Chinese cornerstone shareholder) and SML (in practical terms majority controlled by China - City of Shanghai holds more than 40% and A2M (with Chinese influences) makes up the balance to over 50%) seem to try to destroy each other in the public forum (or at least performing an amazing show fight) makes one wonder who is hating whom.

I assume the A2M Chinese and the SML Chinese don't hate each other, which makes me wonder why A2M and SML perform this amazing value destructing spectacle. Clearly not in the interest of any retail share holder, isn't it?

No matter how NZ retail shareholders feel about any of these companies, they might be better off to keep away while the dragons wrestle  ... too difficult to make money if the boards interests are clearly not aligned with the interests of the retail shareholders.

Oh, no! My cover is blown, my true and secret love is uncovered. What should I do, what should I do? I guess I'll tell you a bit more of my secrets, I would marry my holding if I could like those Chinese boys marry girls holograms. I would marry it because it made me so much money that I was able to afford early retirement and now can enjoy comfortable life with multiple overseas travels every year. And yes, I still have sizable holding. I invested in this company early because I saw huge potential and it's sill the case. So, instead of buying into conspiracy theories about Chinese influence and some other crap by some "legitimate" critics who is trying to figure out how margin was squeezed by comparing products of different sizes and even have no idea what kind of products company is offering, I follow and learn about the business. Are they perfect - no, company did and does have issues, but not that bs people mainly talking about. And yes, I visited Dunsandel and Pokeno factories.
Btw, it's not Synlait's decision on what size tins they should fill, it's up to A2M. If A2M will tell them to fill 3kg they will fill 3kg. If Synlait unable to do so, it's not A2M's problem and they will find someone who will. Just shows one more time your limited knowledge of A2M business.

In fact I'm in love with all my current 16 holdings, ah, no, cancel that, only 14, 2 were naughty recently, because every year they bring me ever increasing dividends. If I didn't love them I wouldn't buy them.

[BlackPeter]

Oh, no! My cover is blown, my true and secret love is uncovered. What should I do, what should I do? I guess I'll tell you a bit more of my secrets, I would marry my holding if I could like those Chinese boys marry girls holograms. I would marry it because it made me so much money that I was able to afford early retirement and now can enjoy comfortable life with multiple overseas travels every year. And yes, I still have sizable holding. I invested in this company early because I saw huge potential and it's sill the case. So, instead of buying into conspiracy theories about Chinese influence and some other crap by some "legitimate" critics who is trying to figure out how margin was squeezed by comparing products of different sizes and even have no idea what kind of products company is offering, I follow and learn about the business. Are they perfect - no, company did and does have issues, but not that bs people mainly talking about. And yes, I visited Dunsandel and Pokeno factories.
Btw, it's not Synlait's decision on what size tins they should fill, it's up to A2M. If A2M will tell them to fill 3kg they will fill 3kg. If Synlait unable to do so, it's not A2M's problem and they will find someone who will. Just shows one more time your limited knowledge of A2M business.

In fact I'm in love with all my current 16 holdings, ah, no, cancel that, only 14, 2 were naughty recently, because every year they bring me ever increasing dividends. If I didn't love them I wouldn't buy them.

Hmm, sounds like you are either privvy to an amazing amount of Insider information - or you are quite misinformed.

I used to follow SML quite closely (until they hired Leon, who gave me a great reason to sell the shares still at their peak . I remember a discussion with their former CFO (Nigel Greenwood) who confirmed at that stage that SML owns the IP for A2 Platinum, owns the export licences to China and fully controls the manufacturing process.

Sure - I don't follow them anymore very close since I sold out, and maybe they gave their rights away. I can't see however why SML would do that, and looking at the current dogs breakfeast in company relations it sounds, that A2 has a quite different view of what they are allowed to do with A2 Platinum, than Synlait has. Clearly, they just need a genius like you to sort that out instead of relying on expensive lawyers.

So, why don't you just stop the current artbitration process between the companies (hey, they are wasting your shareholder funds) and tell both ATM as well as SML off for being stupid to fight about some confidential agreements when the answers are absolutely obvious to you.

You could save them millions ;

Discl: used to hold both (ages ago), holding currently none. 2 hot 4 me  ;

[CG]

Hmm, sounds like you are either privvy to an amazing amount of Insider information - or you are quite misinformed.

I used to follow SML quite closely (until they hired Leon, who gave me a great reason to sell the shares still at their peak . I remember a discussion with their former CFO (Nigel Greenwood) who confirmed at that stage that SML owns the IP for A2 Platinum, owns the export licences to China and fully controls the manufacturing process.

Sure - I don't follow them anymore very close since I sold out, and maybe they gave their rights away. I can't see however why SML would do that, and looking at the current dogs breakfeast in company relations it sounds, that A2 has a quite different view of what they are allowed to do with A2 Platinum, than Synlait has. Clearly, they just need a genius like you to sort that out instead of relying on expensive lawyers.

So, why don't you just stop the current artbitration process between the companies (hey, they are wasting your shareholder funds) and tell both ATM as well as SML off for being stupid to fight about some confidential agreements when the answers are absolutely obvious to you.

You could save them millions ;

Discl: used to hold both (ages ago), holding currently none. 2 hot 4 me  ;

I'm not sure what exactly I'm misinformed about, but it seems someone here has a problem to separate two businesses.
Nobody is arguing that Synlait holds SAMR and fully controls the manufacturing process at their facilities. It might hold some IPs to manufacturing process for this particular IF as well. But it does not have any rights to finished products and it's manufacturing these products to specifications A2M gave them. I'm not sure why is it so hard to understand. Have you ever heard term "outsource manufacturing"? Take Apple for example. Apple does not manufacture its products, Foxconn and some other companies do for them. That Foxconn might have some IPs and knowhows to the manufacturing process, but it produces iphones and other stuff to exact Apple's specifications, assemble, packed them, ship to Apple, get paid for its service and has absolutely no rights to the finished product. Same or rather say similar relations exist between A2M and Synlait.

Yes, it seems like you still have no clue about what that "exclusive rights" arbitration is about. Will try one more time. When A2M and Synlait signed their agreement in return for A2M being "Synlait's preferred customer, with committed production capacity and access to new technologies, and continued favourable and competitive pricing terms", A2M gave Synlait "exclusive supply rights up to a specified IF product volume and a right of first offer for certain additional volumes, in both cases in respect of the IF stages 1-3 already supplied by Synlait and for sale by the a2MC group in the markets of China, Australia and New Zealand". In simple words in exchange for lower price A2M promised that a2 Platinum stage 1-3 they sell in China and ANZ will be manufactured by Synlait and nobody else. Now A2M trying to get rid of this "exclusive supply rights" clause because while it's in force A2M can't legally sell a2 Platinum manufactured by others (MVM for instance) in China and ANZ. They can in Vietnam or US for example, but at this point of time and probably in the nearest future they do not have volume to justify full scale production on another site, plus they want to diversify their supply options which makes perfect sense. So, to load other manufacture with needed volume A2M need shift at least part of production from Synlait, but it's not possible while "exclusive supply rights" agreement in place. Why they went into arbitration. To get rid of this clause A2M was arguing that Synlait did not maintain DIFOT performance which is a part of the "exclusive supply rights" agreement. Obviously Synlait disputes that. They did have 20-business day to resolve this peacefully but were unable to. Therefor went to arbitration, which will decide if A2M has rights to cancel that "exclusive supply rights" agreement. I'm a bit puzzled with why do you think that I or somebody else can stop or resolve that arbitration?
PS. I'm not a genius but some say I have good analytical skills

[Whome]

CG, your analysis of the current situation between Synlait and ATM is spot on. Discl. No longer a shareholder of either company for quite some time, but so much to learn about management practices between these two companies.