next week annoucement, page-70

Whether or not the SP is to rise or fall on Tuesday I feel will be completely dependent on whether or not the market is looking short or long term. If people are expecting the growth rate to either remain constant or exceed this year's then they're going to be disappointed, considering that the Synlait expansions are only expected to begin commissioning in Oct/Nov currently.

This would mean that most of the sales and earnings growth from the AGM update would have to rely on Synlait allocating greater resources to IF production which looks like it will be minimal, having a look at the past two financial years.



Short-termism would likely lead to a sell off, while long-term sentiment would stabilise the price above $7, possibly nearing the $8 mark. How well researched A2 shareholders are would also be an important factor in influencing the SP, those having done more homework would be pleased with the results despite the potential slight slump in the growth rate due to constricting supply, while others won't. The real and full growth waiting to be realised from the increase in supply won't come to fruition till comes June 18.

Taking into account the stellar 11/11 general sales data for JD and Kaola in particular, in reality this should mean that (normalised) performance has improved significantly, although I feel that many people are pricing in growth as if there were to be a substantial supply increase that is already available. Good chance that the instos would be playing with this fact on Tuesday.

This being said, fundamentals will ultimately dictate where the company is heading, and that is above and beyond $10 in 1 to 2 years time without a shred of doubt. Even with just a 17.3% increase in production from the previous period, the A2's sales increased by 55.8%.

Now what do you think that would translate into with a doubling of IF production capacity, and a Platinum-hungry market that's stripping shelves upon stocking within the hour?