Media Updates, page-11019

I am originally from Shanghai and my parents are living in Shanghai now so I have some first hand news about this Shanghai lockdown.

I have to say the lockdown caught basically everyone in Shanghai, no one expects this lockdown will last for such a long time. The shops are all closed so it will affect some sales of A2. However, the good thing is online shop is still active and delivery is allowed but the delivery fee is increased. However, parents who need baby formula will pay for it nonetheless as no parents will starve their babies.

What I am worry about is more about the logistic. Anyone can see the the shipping is significantly affected by this lockdown as Shanghai is a major port of China. so it is harder and more expensive to get the formula into China. So potentially it will start impacting the sales of other cities as well as there is no more formula to sell. Meanwhile, it means higher cost of transportation and longer lead time which introduce huge challenge for A2 to forecast their future sales. I hope they are smart enough to manage these challenges so we are not running into overstocking or stock shortage in the coming months. I believe this is something that really hurts SP as market does not like uncertainty.

For my own opinion, I believe in DB's ability to handle these challenges. To be honest, the good news is no news from A2 until the next financial report. Any update earlier will not be a pretty one, IMHO.