DON'T PANIC A2 HOLDERS, YOU ARE IN A BETTER SPOT THAN MOST, page-344

Small business doesn’t usually have large inventory as it chews into the cashflow the business is reliant on. The photo you took could be due to the below 3 likely scenarios.

1) Stock already sold and ready for China

2) Volume is turning and recovering and the Daigou shop’s stocking large quantity in anticipation of the increase in sales

3) A2M has passed on some of the margins which has encouraged Daigou shop restocking.

People might disagree but I intend to see the inventory level in the Daigou shop as a sign of recovery. To me the negative sentiment permeating through A2m in this forum at the current SP is unjustified and over the top.

Let’s us shift away from the inventory discussion as this doesn’t help the current SP and focus more on the market sentiment.

I don’t think anyone in this forum has ever picked up on the hints from the movement of the big shots investment banks. Well from their share holding announcement . So allow me to do some analysis.

1) Morgan Stanley is long on A2M. They had about $5m call option placed mid March to end of March at a price of $11-12. And so they pumped in $30m 1 day before the report day(24/02) and another $10m on 25/02 trying to pull the SP up to cover their call options( obviously got shot down so it’s not just retails ,big names also lost money on A2m) Smarting from the loss, they bought $ 10m Put option at $7.88 as an insurance. The interesting fact is some institution ( presumably who had been bearish on A2M and made the dump on 25/02) was happy to sell the put option for a conditional profit of $11.6m. This says to me heavy weights in the market have pretty much agreed that close to $8 is the rock bottom no matter how much disparity on SP outlook they got prior to 25/02. Morgan Stanley have also about $54m Equity swap agreement expiring between Aug-Oct this year. This agreement is very much a long bet with a strong bullish view. The current SP is at 3 year low ( Presume the agreements were struck in the past 3 years) which most likely will give MS negative price gain on the equity swap agreement if SP stays as it is and this is on top of the $54m they spent on the swap.( what a risk!) They’re expecting the SP to recover hard , hard enough to recoup the $54m spent the swap deal at the minimum. We’re not talking about a $1-2 rise here.

2) It appears UBS has been a net seller for about 6-7m shares during the period Nov- March this years on first look. Close look tells me they’ve been a net buyer of 6m shares since 24/02 spending over $50m+ and are still accumulating I believe. although UBS is less aggressive and choose to take the cash and swap out their medium to long term SP gain. The short term position indicates to me they also expect a strong recovery.

3) Now let’s look at what their individual targeted prices are for A2M. UBS at NZD 15.6 MQ at $ 13.84 , MS at around $10.5 and JP Morgan at $12 I believe . Well Citi is being a black sheep and bearish on $7.4 . Well it will be interesting to see how much shares Citi holds and how much skin they’ve got in the game. Can anyone provide some data on other big players in the current market?

So now you see the big shots are catching the falling knives and there is a mob here thinking A2M is finished. Way too negative guys , way too negative. It’s not going to be a big V recovery but with so much Skin in the game from the big shots and Daigou gradually recovering A2 will be on their way back ,albeit not to a lofty height of $20 . Too all , patience is a virtue.