Chart Update, page-17398

CLV is one of few company that supplies premium infant formula ingredients to IF producers around the world including Aus/NZ. I don't think it's ever been officially confirmed but I'm assuming they supply some ingredients to Synlait and A2M.

Anyway, CLV is ultimately contingent of demand for imported IF primarily in China, if perhaps a bit of a lagging indicator (since it's driven by demand for IF production rather than actual IF sales). Their 12 month chart is similar to A2M, dropping about 50% off its high particularly in the last six months.

A couple days ago they reported interim results which identified many of the same issues that have arisen over the past 6 months for A2M, for example:

"Some customers have experienced reduced demand as the China market undergoes changes in supply channels due to COVID restrictions and the Daigou channel reduction, whilst minimal international travel by Chinese tourists and students has slowed the ‘grey market’ importation of many products including infant formula"

But they also have expressed the following about the future outlook:

"the Australian and New Zealand market has been heavily impacted by the reduced infant formula demand from China. The fundamentals of these manufacturers, their brands and product quality remain, and we expect they will adjust channel strategy to meet the changing dynamics of the market to regain their position."

Worth noting their SP is already up 20% in the past few days in response to their results announcement.