A2M

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$6.77 the a2 milk company limited

Good insights re regulation organic vs a2. Hadn't thought of that

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07/11/18

16:37

Post #: 36421459
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Originally posted by imback: ↑

A2M will always keep raising their formula price to be the most expensive and maintain reputation as the premium genuine A2 only product. The competitors will now only provide cheap advertising and validation that A1 is a big danger for their babies. Then Chinese customers buy the most trustworthy brand and premium product. So we get A2 market expansion as well as A2M margin expansion. They just added $5 margin for their Platinum in one year! A very large margin increase. Then channel these huge profits into marketing and slaes channel grwoth. Only Nestle has a chance to match this kind of spend, but they will run at a huge loss on their Atwo for many years if they want to take market share. Someone will be sacked before that happens! The rest have no chance to make any impact on A2M Platinum market share. They will just create a new cheap, secondary A2 IF market.

Now also consider A2M can use this margin to encourage diagou and MBS stores to push their product ahead of their cheap, copy cat competitors. It takes many years to build a premium name to sell at premium prices. These new competitors will be fighting at the discount isles to sell their product (just see BKL formula. $20 and less and still can't sell. Yet they start with some kind of brand name. How will AU8 sell their 'home brand' A2 IF. Only through large and unsustainable discounting which then pushes NAN and others to discount).

I have been watching the IF brand space for a long time. There are many reasons for success and failure. Just look again at the other brands produced by SML: Arakola, Cantebury Pure, Munchkin, all coming out of safe NZ clean and green, but no sales traction for many years. It's not easy to take 5% China market share in 2-3 years! One in 20,000 chance!

You have to remember A2 only milk is not the same as Organic milk in regards to regulation. Organic certification is standardized, so customers can have some assurance that it is organic. A2 only milk, you can only trust the manufacturer's reputation. If people are buying because they think A1 is poison and very dangerous for their baby, then only safe option is to buy from the original pioneering, patented company. Nestle already has a bad reputation in China and ROW, the others have no reputation for IF

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Good insights re regulation organic vs a2. Hadn't thought of that

A2M Price at posting: $9.58 Sentiment: Buy Disclosure: Held
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Last $6.77		Change 0.130(1.96%)		Mkt cap ! $4.894B

Open	High	Low	Value	Volume
$6.63	$6.77	$6.63	$10.00M	1.485M

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No.	Vol.	Price($)
1	2420	$6.76

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Price($)	Vol.	No.
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No.	Vol.	Price($)
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6.770	18339	2
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