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$6.72 the a2 milk company limited

I'll keep a tight look at the A2 vs Bellamy sales data in the...

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FortuneChaser

655 Posts.

05/02/16

23:55

Post #: 16955828
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Originally posted by asb83 ↑

According to A2M's latest update on 18 Dec, they are expecting FY EBIT of $NZD 33 - 37M. That's $AUD 30.9 - 34.6M.

Bellamy's 6 months x 2 is already higher than A2M's forecast FY EBIT (19 x 2 = $AUD 38M). Remember that Bellamy's increased the price of their product by ~30% in late November, so this will significantly add to EBIT and they've also said they are expecting a stronger 2HY 2016. Bellamy's FY EBIT will more likely be somewhere around AUD $50M.

Bellamy's have a higher margin business model than A2M. The milk side of A2M's business is not high margin, hence why their revenues are higher, yet EBIT is lower.

Both have pretty much identical market caps at the moment:

A2M = $1.28B
BAL = $1.23B

By the end of the year, I'm predicting A2M to be around $2.50 (30% more than current price) and BAL to be $20 (56% more than current price). I think that is fair based on the above.

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I'll keep a tight look at the A2 vs Bellamy sales data in the following days, it's interesting that when Bellamy increased price more customers switched to A2, if A2 increases the price I'd assume more customers would switch to Bellamy again, competition is really good for the customers

Last edited by FortuneChaser: 05/02/16

A2M Price at posting: $1.82 Sentiment: None Disclosure: Held
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0 Great analysis

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(20min delay)
Last $6.72		Change -0.020(0.30%)		Mkt cap ! $4.858B

Open	High	Low	Value	Volume
$6.81	$6.89	$6.68	$14.52M	2.142M

Buyers (Bids)

No.	Vol.	Price($)
1	13046	$6.71

Sellers (Offers)

Price($)	Vol.	No.
$6.73	17123	4

View Market Depth

No.	Vol.	Price($)
3	9925	6.680
2	6687	6.670
3	8037	6.660
2	14730	6.650
1	3131	6.640

Price($)	Vol.	No.
6.730	17123	4
6.740	12987	2
6.750	15146	3
6.760	7249	1
6.790	3755	1

Last trade - 16.10pm 14/08/2024 (20 minute delay)

A2M (ASX) Chart