Look, the old model, built solely on a high-margin daigou...

Look, the old model, built solely on a high-margin daigou channel delivered impressive EPS of 0.40, but it also concentrated the company’s success in one volatile area. When COVID hit, that over-reliance and the lack of diversification in domestic operations and alternative distribution channels quickly exposed the business’ vulnerabilities.

Now, under the guidance of seasoned visionaries, those who helped set the premium dairy standard and forge deep, strategic relationships in China. The company is pivoting it's strategy. Instead of leaning solely on daigou, the new approach smartly diversifies channels, reinvests in product innovation, and optimises capital allocation. This strategic shift has moderated EPS to 0.26 and brought the PE down to around 23, reflecting a more sustainable, de-risked model that better safeguards shareholder value.

Moreover, the specialised expertise and government relationships required to navigate China’s market mean that any takeover would likely attract only a very select group of suitors, underscoring the strength of the current management’s focused approach. In essence, while the old daigou-centric model once drove strong short-term returns, its inherent risks were laid bare during the COVID crisis.

The new diversified strategy not only strengthens the brand but also sets a benchmark for sustainable, long-term growth a blueprint that savvy, forward-thinking investors are rallying behind, and one that new companies in our sector should look to emulate.