The Death Of The Daigou, page-36

Hi hqiu,

I have posted these previously, but things do get lost when there are 700 posts a day, here is a couple of articles which might be of relevant interest to us all.

https://keithwoodford.wordpress.com/2015/05/06/synlaits-akarola/

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11544519

Simply put, there is a disruptive change about to take place in the way that NZ infant formula companies market and sell product into China. Some consider the change will be immediate, some like myself consider that the change won’t be as dramatic and will be later in 2016.

Personally, I agree with Theo Spiering, even though I am a Synlait shareholder, that Yashili and Synlait should not be going down this path, but as an investor one should always need to take such matters into account when working up valuations and associated sensitivities.

There is not so much a demand issue in China for infant formula as there is a demand on what is regarded as safe product from countries like NZ and Aussie.

I find it a bit disappointing actually that a Chinese company like Yashili should come to NZ, build a plant, then seek to gain sales volume in China quickly by disrupting the margins other NZ infant formula companies have been enjoying, should never have been allowed to happen in my opinion.

In regard to price points, I also see no change in Australian price points, only in mainland China price points, hence the pending end to the Daigou’s big profits on the horizon.

kind regards,