Currently, BGA is trading at around PE of 20 and PB of 1.For me,...

Currently, BGA is trading at around PE of 20 and PB of 1.
For me, the face value of these figures does not look cheap nor expensive.

Some of the concerns in the market.
1. The recent drought and the shrinking of milk pool, leading to higher cost and lower volume.
The weather-depend nature of the dairy industry is true. However, given the acquisition of Bega Food and the swift response in restructuring the supply chain. I think it's manageable
.
2. Potential equity raising
The frequently mentioned metric in Bega report is the debt/(equity+debt) ratio is around 25% "(316-28.8)/(826+316)". It is within the target 30%.
I don't think there would be another capital raising, except for another acquisition, which I think is unlikely in the near term.

3. Legal dispute with Fonterra
In my opinion, it puts Bega at serious disadvantage, not be able to use its brand. However, I think the court case will be more about the monetary compensation and Fonterra is probably looking for some sorts of loyalties from Bega for its use of Bega brand.

Upside in Bega:
1. Its band and products are well-known and uniquely Australian. It is likely to be a takeover target, once the shareholding restriction is lifted in Aug, 2021.
2. Its purchase of Bega food (including Vegimite and peanut butter) will lead the way into brand category in spread business and also diversity from dairy products, especially important during tough dairy conditions, such as the recent drought.
3. The management seems to be agile and decisive in managing the supply chain, financial leverage and expansion.