$4 PARTY ON MONDAY, page-74

I want to make a quick estimate to half year result.

Good and will boost SP towards $10 in the next 6 months: ANZ 130m, CBEC 220m(Tianmao 140m(based on unofficial figure from ecdataway) + jd.com 40%+ less than tianmao 80m), China Label 150m, Milk 90m = 590m, net margin 14%, net income 82.6m. (Net margin 14% is on the high side, but this is if everything is working out)

Bad and will gap down lower: If CBEC channel is low and margin is in the low 10% with net income <60m, this is bad. It basically means they are spending more on adverts but not seeing any effect even though the channel inventory issue is pretty much solved....or a sign that Chinese domestic brands like Feihe is taking too much share too quickly.

Key factors to watch for: CBEC channel and net margin, I believe ANZ and China Label will be lower again due to no daigou yet and CBEC channel gaining momentum.

Our main competitors in the Chinese market are Aptamil and Feihe, which will be number 1 and 2 in the foreseeable future, Mead Johnson is pretty much a bust since they've already sold their Chinese business, Nestle I don't think they are gaining too much momentum and then that left us with Junlebao, Friso, Biostime, Yili.

So if you are investing, watch out for:

1. How fast Feihe is gaining market shares
2. If A2 can maintain position against Junlebao, Friso, Biostime and Yili