A2 Milk (ATM, + 23.6%) was again a strong performer for the Fund...

A2 Milk (ATM, + 23.6%) was again a strong performer for the Fund during the month and our channel checks suggest that the company continues to perform well heading into the new financial year. The company iscurrently transitioning its Chinese distribution model from one dominated by the daigou to a more sustainable direct shipment model underpinned by Cross-Border E-Commerce (CBEC), China direct online and Mother and Baby Stores (MBS). June port data out of Christchurch, where Synlait manufacture the majority of A2M milk formula products, suggest very strong Chinese (+124%) and Hong Kong (+106%) exports somewhat offset by afall in exports to Australia (-17%). This supports the view that the Australian daigou market is softening but is being comfortably offset by growth in China direct sales. During July, we also witnessed price rises in the A2 Milk infant formula range across Australian supermarket channels and we also expect there was a lift in the wholesale price during the month. A2M remains a core portfolio holding for OC Funds and we remain upbeat about the long-term growth of the business.