Pindoudou - New Daigou, page-10

If A2M engages with PDD, this will be the end of the company. It is a classic short term gain but long term ruins strategy. The company still has potential but needs to recognise the proper strategy to increase shareholder value.

A2M was and still should aim its market as a premium brand and do marketing similar to the LVMH or other premium brands. If A2M start chasing after market segment on PDD, then it will be swamped by competition and the resulting low margins. In the process it will also have destroyed its brand. A2M can't win against the competition these days, there are too many brands with their own A2 protein IF out there.

The company also needs to reduce the expectations on its previous margins, trading some margin to promoters that will move its stock. This market is no longer the early days when A2M was the only A2 protein player in the IF market. It needs to form bonds with proper Chinese promoters that allows the company to distinguish itself as the starbucks coffee of IF in China. The days of 30% operating margin is gone, any expectation to keep this margin from the current weak market position is not feasible.

Focus on premium growth, marketing, and have realistic expectations in a competitive market. The previous CEO Jayne Hrdlicka I think she was on to something, but the board could not understand her vision and now here we are. The board is out of their depth, one quick fix would be fire everyone and start again.