Synlait’s results build on the momentum that a2 volumes are coming back strongly.
5 points to consider.
1. a2 deliberately ran down their China label inventory in 1st qtr FY22 so Synlait sales would have been significantly down in HY 22. Does not reflect actual sales of A2 formula
2. Synlait end of year inventories are down 40% from previous year suggesting increased sales of formula to A2.
3. Synlait actively sourcing new farms as milk supply not enough. Already recruited 9 more farms for FY23
4. Synlait looking to re-allocate higher milk supply to infant formula production and reduce lower margin WMP (ingredients) sales.
5. A2 MVM looking to source infant base formula to Synlait to keep up with the demand.
A2M Price at posting:
$5.35 Sentiment: Buy Disclosure: Held
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