Laura, the former BAL CEO, thought BAL could bypass "Daigous" to sell in China at cheaper price to gain the market quickly. Many "Daigous" didn't have high margins. A sudden drop in price caused them to lose a lot of money as their customers in China were quite price sensitive. BAL had similar market cap as A2M till then. Later, A2M just took off from there whereas BAL struggled to stay afloat.
The drop in A2M recently coincided with drop in new born babies in China. A2M is a growth stock, any negative news will hit the company very hard. A2M's catchment in China is around 5% but the newborns have dropped quite significantly from 17.28 mil in 2017 to 10.03 mil in 2020. Also, many travel and education agencies have received verbal orders to stop organising Australian tours and studies after Covid. Is A2M an excellent company? Yes, I think the risks have already been priced in but would like to wait to see where it would bottom out.
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