tonglieite; please tell me have just made an innocent mistake...

tonglieite; please tell me have just made an innocent mistake when quoting only H1 EPS to calculate PE.

As far as I understand, 1 year earnings = H1 + H2.

Based on yesterday's report, H2 EPS will be at least 2.5cents.

Than means FY16 EPS will be 4 cents per share. PE = 200/4 = 50.

Now this estimated EPS is living in the past. A2M are upgrading at the rate of 50% every 6 months. Yes, the management is very conservative. They missed the H1 forecast by 9% even when they announced on Dec 18! So add a further 1.25 cents EPS this FY. PE = 200/5.25 = 38.

Now what will be the growth next year? 50-70%? Say very conservatively 50%. Then EPS = 5.25 + 2.6 = 7.85. PE = 25.


Don't worry about population growth in China. A2M will not meet its current demand for many years to come. What an investor needs to be focused on is: What growth rate can A2M source A2 milk? There is plenty of evidence farmers are coming on board. Why wouldn't they when they are losing money at current dairy prices for standard milk. I believe A2M can source A2 milk at a growth rate of at least 50% for the next 3 years.

What will the PE be if that happens?