A2M

1.42%

$6.23 the a2 milk company limited

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rookstar

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12/12/17

18:03

Post #: 29577125
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Originally posted by Tweety ↑

Description: Research FINAL copy.jpg AGRICULTURE/FMCG The a2 Milk Company (A2M.AX) Multiple growth levers Started well and laying the foundations for FY19-20e: The recent 4M18 trading update for A2M continued to highlight a high growth business (revenue growth of +69% YOY, EBITDA growth of +121% YOY and NPAT growth of +138% YOY) with further progress being made on expanding its distribution footprint in the US (+600 stores since Jun’17 and a doubling in its presence since Jun’16) and China (from ~1,450 in Jun’16 to ~5,800 currently). Despite delivering strong trading results and favourable signals for future growth (note we upgraded EPS by 4-7% over FY18-20e at the time of the announcement) the stock price has fallen ~5% and this is creating a buying opportunity in our view. Modest upgrade to target price: We make no changes to our earnings forecasts, but raise our target price to A$8.30ps (prev. A$8.15ps) reflecting recent moves in the AUDNZD and the natural roll forward in our valuation model. Investment view: Upgrade to Buy: Following the recent share price consolidation we upgrade our rating from Hold to Buy. Over the next 12-24 months we see a number of key growth catalysts for A2M being: (1) an acceleration in China IMF sales as brand rationalisation post Jan’18 favours brands which have achieved CFDA registration. In our view if A2M can bridge the gap between its on-line and off-line market share positions there is material upside to volume projections in FY19-20e; (2) an acceleration in demand for the existing range of a2 branded adult nutrition powders (WMP/SMP sachet packages) and the potential for a launch of more advanced formulations (eg. Fortified milk powders); (3) an acceleration in the distribution reach of fresh dairy products in the US reducing losses in this market in FY19-20e: and (4) the potential for higher margin products to be added to the existing UK portfolio (infant and adult nutrition). We continue to see A2M as having a number of growth levers at its disposal over FY18-20e while at the same time reviewing options for capital management in light of the strong levels of operating cash realisation. Recommendation: Buy (prev. Hold) Previous Close: $7.09 Price Target: $8.30 (prev. $8.15) Jonathan Snape

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https://www.nabtrade.com.au/investor/insights/latest-news/news/2017/12/4_stocks_dining_bo

Here is a link to nabtrade article

Last edited by rookstar: 12/12/17

A2M Price at posting: $7.10 Sentiment: Buy Disclosure: Held
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(20min delay)
Last $6.23		Change -0.090(1.42%)		Mkt cap ! $4.510B

Open	High	Low	Value	Volume
$6.30	$6.31	$6.17	$6.785M	1.089M

Buyers (Bids)

No.	Vol.	Price($)
1	5458	$6.23

Sellers (Offers)

Price($)	Vol.	No.
$6.24	13490	1

View Market Depth

No.	Vol.	Price($)
2	5025	6.210
1	484	6.200
1	1000	6.150
5	9029	6.100
1	1652	6.050

Price($)	Vol.	No.
6.260	1604	1
6.280	10000	1
6.300	1750	1
6.320	700	1
6.350	2000	2

Last trade - 16.10pm 04/10/2024 (20 minute delay)

A2M (ASX) Chart

broker Upgrades A2m, page-4

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