Yes, the figures are as at 31 December 2021, the latest ones. However, company supposed to maintain a certain level of inventory and not just drive it to the ground. I think that this level is quite appropriate and in fact as per their outlook in this report they said inventory likely to go up. I do not remember any comment about 'tight' inventory, I think there was something about tight control, but it might be just me.
So, based on that and if everything is going according to the plan I might say that current level of finished goods could be around 90-100mil and if IF makes up lets say around 80% of that amount we will have 70-80mil just for IF. With the lowest possible net realisable value of $15-20 per tin (it's just my guess) we will have something around 4mil tins. With revenue from IF of around 18-20mil a week this level of inventory corresponds into about 4 weeks of sales. So, yes I do believe they can come up with up to 1mil tins if needed, especially if they are in a position to ramp up production by 20-25% in the next couple of months. But that would be another story.
As for the old/new and English/Chinese label I don't think it really make a difference. I doubt any of their labels will be appropriate (display in imperial system and probably need duplication in Spanish) for US market anyway and probably would need some ugly sticker. In that case old is better. And in fact will be an opportunity to dump old label at once in one market rather than feed it slowly everywhere.
But regardless of anything it wasn't the point of my original post. My point is they need to pursue this opportunity to the end, they might not be given another one. Even if it cause short term pain somewhere else. Not many complained last year when they wrote off $100mil of stock to support premium price in the future. It was the right move. So, this is the same, even if there will be short lived shortage in AU or China I'd say be it if it helps get established in US. After all isn't a favorite approach of David Hearn to create an artificial shortage to create illusion of brand supremacy?
A2M Price at posting:
$4.32 Sentiment: None Disclosure: Held
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