A2M (ASX) Chart Update

Originally posted by CarlosG: ↑

For the 6 month from 9/20 to 2/21 China Feihe offline market share grew 0%
their online market share at the same time grew ~1% with a big drop in November which coincide with biggest online sales event 11/11, Also November is a month with the biggest sales of IF during a year (see below, that data from 2017 but I would guess will be similar to other years).
So, I would not be so sure Feihe was gaining to much share during the last 6 month

One more note. Domestic brands dominates the lower-tier market. And in this market Feihe is number one. However 1st and 2nd tier dominated by foreign brands. But market share of lower-tier cities is growing and I think this is where a2 need to expend and rather quickly.

"The biggest advantage of most domestic brands is their ability to organize channel services in lower-tier cities. An important fact is that in the past two years, the birth rate in China has been declining, and the number of newborns in third to sixth tier cities accounts for 80% of all births. The market of lower-tier cities accounts for nearly 60% of China’s infant formula market [3]. At a macro level, growth in China's infant milk powder market is currently stagnant. However, third and lower-tier cities, have faster population growth and greater demand for infant formula consumption. In these cities, domestic stakeholders are dominating."

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Hmmm...

Jan-Feb21 brand performance

Large domestic companies’ collective market share increased 860bps yoy in Jan-Feb, accounting for over 50% of market share, higher than leading MNC (30%).Leading local brands gained share from both MNC and smaller players. This was driven by stronger servicing and increasing trust from parents of the younger generation.

Feihe, the leader in IMF, further gained share, reaching 20.2%, followed by Junlebao (7.9%), Wyeth (7.2%) and Biostime (7.0%).

International online IMF value market share --> Aptamil maintained no.1 position and its market share remains at 21% in Mar

n Jan-Feb 2021, Feihe further solidified its leadership position, with sales growth of 55% yoy, one of the fastest among all the players monitored by Nielsen. This has aided Feihe to reach 20.2% market share by sales value, the highest in its history, widening its gap in the offline market vs. other players.

Oh. This I just saw today from Nestle's results. Some read-x from Nestle results: Pet food continues to grow 8.7% (+vs Symrise), infant formula sales declined due to lower birth rate and stockpilling last March as Danone also said (-ve DSM/AAK), confection grew 10.3% due to impulse buying and gifting (+ve AAK), vitamins and supplements grew 9% as immunity boosting products still in strong demand (+ve DSM), prepared food +10.2% (+ve Giv/Sym).

Nielsen data for the Mom & Baby Store (MBS) channel suggests that A2 has continued to outperform vs. other international brands. However, the YoY growth for the months of Jan/Feb 21 was at +20.4%, slower vs. the past half year.

Tmall/Taobao channel data for A2 also weakened significantly though unsurprisingly given te ongoing difficulties in both the CBEC and Daigou channels, which is now wellunderstood in the market. A notable positive from this dataset for the month of March is that the market share for A2 was largely flat MoM, after a quarter of steep declines. While weakness in the CBEC channel has been anticipated (GSe 2H21 revenue growth
-49%) the decline in sales momentum for MBS is below current expectations and, should this slower rate of growth continue, would require reconsideration of our forecasts for the channel over FY21 (GSe 2H21 +30%), which is forecast to remain in strong growth due to new store openings across the channel. Given MBS was the only remaining driver of growth for A2 revenues over FY21 we believe the risk to the A2
story remains elevated and we maintain our Neutral recommendation despite value appearing in the stock.

A2 sales growth remains ahead of other international brands, but growing slower vs. prior months

Chinese brands continued to outperform vs. the International brands in the MBS channel reporting +43.1% and -3.4% growth respectively for January and February 2021. While A2’s growth rate for the period was stronger vs. the international brands at +20.4%, it was a material step down vs. the c. 45-46% reported over the past 8 months. A2’s market share also reduced from 2.77% in Nov/Dec 20 to 2.24% over Jan/Feb 21. Notably, this coincides with a step change in growth recorded for the domestic brands at c. low 20% over the past 8 months to +43.1% in Jan/Feb 21.