The value of something is only as high as the amount of money that people are willing to pay for it. The RB sale is going to be a crucial yard stick for reference.
At the moment A2M is facing some major fundamental issues that are certified to be fact simply, especially because all infant formula manufacturers that are selling their products in China — including domestic ones, are suffering from them. These issues are:
Sheer drop in birth rate in China.
Fierce competition due to premiumization of Chinese domestic brands.
Pricing competition.
And, other issues unique to A2M:
4. Death of the daigou channel that A2M had been so dependent on for both the marketing and distribution of its infant formula products. 5. Possible attempts by the CCP at subterfuge.
In the face of the issues above, it is only logical to accept that there is a very real chance that for a pure brand play like A2M, the decline in its financial performance may be permanent.
If another downgrade happens then it is not unreasonable to think that many more would follow.
I am curious to understand how people are still thinking that the only issue that A2M is facing is the lack of international students....
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