Feelin Confident, page-197

A2M is a steal at $9.50. 

It was at $11.89 on Aug 30, shortly after its FY18 results release.

What has changed since results release (negatives):

1. CEO sold all of her shares

2. Other directors also sold small parcels of shares

3. Uncertainty regarding CBEC e-commerce laws in China and the impact it may have to A2M

4. A slight dip in the markets

What has changed since results release (positives):

1. Q1 was in line with expectations with China standing out,

Revenue estimates by segment (I'm going with NZ$280 million), factoring price increases and market share statistics):

ANZ 190m

China 70m

UK & US 20m

- With no growth all year, that gives us NZ$1.12b (or >20% growth).

- Assuming growth continues there is no reason why 40% growth FY19 v FY18 is not possible.

- If CBEC results in no sales except China label (10% of total China sales), there is a $150m hole in the revenue forecast for FY19, however we will still be up year on year.

We need to ask ourselves whether the sell down from $11.89 to $8.14 had any real substance?  My answer is NO.  The worst case scenario is still revenue growth (of about 5%) and it is quite probable that we will have no CBEC issues come 1 Jan 2019 (either further delays to implementation or acceptance of A2M's tax friendly compliant approach).

Despite all this speculation, I'd expect:

- further broker upgrades

- Infant formula to be introduced in the US

- more Synlait shares acquired by A2M

- director share purchases in A2M

GLTA,  I feel confident of $12 by AGM date.  Fundamentally we are sound.