Media Updates, page-12138

@Goldsu

You do realise that Goldman are conducting the buyback for A2M right? They don't get to decide whether it proceeds or not. A2M is their client! They simply do as they are told.

The buying started in November and by my estimate it's almost halfway done. At that rate it will be completed well before the 12 month period allotted.

You, like many others it seems, are too fixated on the buyback. It's good and all but it's only a drop in the water. Recent improvements in the SP have been helped by it but are ultimately due to the company's stabilisation and improved sales.

Birthrates have been declining for a long time. But it's not quite as simple as less babies = less sales. Because less babies can also = a higher willingness of families to pay for premium products than would otherwise be the case.

Ask yourself, if there was a rapidly increasing birthrate, do you think parents would be as discerning about their purchasing decisions- for the second, or third child? Would they even need formula as much, as a stay-at-home mother, versus if they were going back to work?

Don't get me wrong, it would be better for A2M if birth rates improved, but it's not the only consideration. Ultimately they need to be positioned to capitalise on both scenarios, with ultra premium product for Tier 1 cities (low birthrate) and more affordable products for Tiers 3 and 4 (generally higher birthrate). Their growth in China will come from how well they can do both simultaneously IMO.