A2M- Reality Check, page-7

First 7 Last

Share
Profile

Follow
FortuneChaser

825 Posts.

2

11/02/16

22:12

Post #: 17000009
Share

Originally posted by lhantian ↑

Hi all including Hokey（want your input)

Let's do some reality check here.

I am just going to do some calculation based on A2m's ANZ and China region valuation because I think it would not be accurate to take US and UK earning/ lost into consideration for now as the expansion to these regions are still in early stage and it can be considered as a one off investment. The management can always pull the plug if it doesn't work out. Therefore valuation below exclude US and UK region.

Based on dec. 15 profit upgrade report, the sales for IF is $30mil for nov and dec 15. Therefore IF sales = 6x30mil = $180mil per year. And based on fy15 result, in ANZ+China region the sales for other products (other than IF) = $111mil per annum so let's assume there is 10% increase in sales for this segment then Fy16= $122 mil per annum. So the total revenue forecast Fy16 to be= $302 mil for ANZ +China region. Then we apply margin rate from fy15= 18%. The ebit will be $54.36 mil. Then let's apply 3 different multiples into the valuation. with Pe 20= $1.55 per share, pe 25= $1.93 per share and pe30=$2.35 per share. Based on all this, I personally do not see why a2m couldn't achieve $2+ after the 17 February announcement. Given that a2m is a growth stock the Pe should be on high 20s.

Also note: when I do the calculation above I didn't include any upsides.
1) I just assumed there is no growth in IF sales. Entirely just based on nov and dec 15 sales result. This is extremely conservative, because I highly doubt there is no sales growth.
2)The profit margin rate that I used is just based on fy15 average when IF sales to the group is still not as significant compared to now. IF margin should be higher than other milk products. So when the percentage of IF in total group sales increase so the overall margin increase too.
3) No consideration of potential product price increase. Keep in mind given the current strong demand it might be a good strategy for management to increase price. This will potentially be a great catalyst to stock price

** the calculation above is based on my personal assumption only. The purpose is for discussion only.**

Please provide constructive feedback/ input and correct me in the area that I am wrong. Cheers.

Expand

Your calculation is based on Nov and Dec sales, assuming every month would be as good as these two months. The reality is the Nov and Dec are the best selling period for Chinese consumers, the sales per month in other months would be nearly halved compared to Nov and Dec, also if the supply cap has been reached the sp would more likely go down

A2M Price at posting: $1.68 Sentiment: Sell Disclosure: Not Held
Upvote

0 Great analysis

Reply

Top Stories

WIN

'Incorrect datasets': Old irony sets WIN Metals up for golden opportunity at Emjay

ASX Market Close: Tariff fatigue truly evident; RBA eftpos proposal sinks Tyro

AII

Inside the depths of Panasqueira: A legacy carved in rock

Tuesday's HotCopper trends: Sayona intercepts, Bowen Coking crisis | July 15

Listen: HotCopper Wire Podcast 017 – RBA holds the toppings

First 7 Last

Add to My Watchlist

What is My Watchlist?

A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

(20min delay)
Last $7.22		Change 0.000(0.00%)		Mkt cap ! $5.227B

Open	High	Low	Value	Volume
$7.26	$7.27	$7.18	$10.97M	1.519M

Buyers (Bids)

No.	Vol.	Price($)
2	4528	$7.22

Sellers (Offers)

Price($)	Vol.	No.
$7.23	6500	1

View Market Depth

No.	Vol.	Price($)
1	1150	7.220
2	14413	7.210
1	700	7.200
2	10304	7.190
6	33943	7.180

Price($)	Vol.	No.
7.260	6000	1
7.270	25694	7
7.290	279	1
7.300	5520	4
7.320	5000	1

Last trade - 16.10pm 15/07/2025 (20 minute delay)

A2M (ASX) Chart

A2M- Reality Check, page-7

'Incorrect datasets': Old irony sets WIN Metals up for golden opportunity at Emjay

ASX Market Close: Tariff fatigue truly evident; RBA eftpos proposal sinks Tyro

Inside the depths of Panasqueira: A legacy carved in rock

Tuesday's HotCopper trends: Sayona intercepts, Bowen Coking crisis | July 15

Listen: HotCopper Wire Podcast 017 – RBA holds the toppings

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

A2M- Reality Check, page-7

Top Stories

'Incorrect datasets': Old irony sets WIN Metals up for golden opportunity at Emjay

ASX Market Close: Tariff fatigue truly evident; RBA eftpos proposal sinks Tyro

Inside the depths of Panasqueira: A legacy carved in rock

Tuesday's HotCopper trends: Sayona intercepts, Bowen Coking crisis | July 15

Listen: HotCopper Wire Podcast 017 – RBA holds the toppings

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News