The obvious answer to me and most others is that they need diversification.
Except - it is easy to say "diversify" but harder to point to attractive avenues for doing so.
America does not look promising due to the prospect of increased tariffs, on an industry that is already a highly protected & subsidised local monopoly.
SEA they have made some in-roads but even if successful it is just pocket money compared to China. There was mention of Middle East recently so we'll see what happens with that.
That leaves diversification by product category rather than region. That means to some extent accepting that overexposure to China is a given and instead using the brand recognition to kick off into other product categories that aren't contrary to demographic trends like birth rates. The recently launched senior milk powders suggests this is the strategy being pursued.
There are many more dairy categories that could be disrupted by a focus on A1-free / A2 products. Cheese, yoghurt, protein drinks, etc. but the reality is these require expanded manufacturing capacity to make the margins worthwhile. So they need to invest in stainless steel which is capital intensive and many will not like.
A2M Price at posting:
$4.98 Sentiment: Hold Disclosure: Held
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