A2M Strategic Valuation, page-22

Bell Potter:
Buy on bottom of the cycle theory.
Good part, even with all the crap going on in FY21 Bell Potter believes FY21 will still be operating cash flow positive in 2hFY21.

Their investment thesis:
Based on MVM consolidated business: Revenue $1.4-1.5b and EBITDA of around $300m.
From there they see a pathway to $1.7b of revenue and $445m EBITDA. from its existing China offline distributrion network.
They mention A2M is underrepresented in the offline segment vs major competitors like H&H & Feihe. An expansion to 30k distribution points could take them to $2b in revenue and $560 in EBITDA.

THe shift to direct distribution will also make A2M a higher quality business in Bell Potters view, more in control of its marketing & route to market.

However it will also involve a more capital intensive and lower margin business (Aussie Daigou 50% gross margin, CBEC 45% gross margin, but China offline only 30-35% gross margin).

They estimate that going forward A2M will trade at a multiple of 12-16 times EV/EBITDA compared to its recent historical 20+ times.