Why Andy think A2M is better than BAL

Before compare the A2M and BAL,in my opinion,we shouldn't  judge a small company with the PE ratio.We invest in small cap companies mainly because their performance can be rapid growth.Like a small company ,market capital is $100million,net porofit after tax is 1million,so the pe ratio is 100,but if the company can get rapid growth like 100% grwoth for next 3 year ,suppose market capital is still the same,NPAT is $2,pe ratio will sink to 50,NPAT is $4,pe ratio will  25.NPAT will 12.5.So unless you invest a big company like woolworths or westfarmer,these big company unsually cant get rapid growth,now you should focus  their PE ratio and Dividend.The lower PE ratio,the more Dividend.
   Actually,if you invest a small market capital company like BAL and A2,their dividend is too low.The only profit method for these company is buy and sell like  buy at$1,sell at$2.So judge which one is the good for small company is revenue growth .
  Now, let's compare A2M and BAL.


  A2M and BAL is only two company which produce fomula in ASX.Here are the two picture



The price for BAL from $1.4 to $7.2 in the recent years,and market capital just  $130million one years ago,The price for A2M in NZ from NZ0.55 to  0.81. The market capital A2M is 2 times  for BAL on last october,but now,the A2M market capital only 60% for BAL.Yes, BAL's revenue and NPAT is higher than A2M and the growth also faster than A2M.But actually, bellamy's fomula and A2 fomula are both popular in China. The difference is just because of A2M just launched in 2014, a new brand and the production capital not enough in last year.

The product for bellamy are organic baby formula and first foods(more than 90%of revenue from fomula) and more than 80% of fomula are sold to oversea market(most in China).BAL completely dependent on the Chinese market now,this is a opportunity,but also a big risk which depend just one market.Like australia's mining industry,8years ago,depend on china.they are the best in sharemarket,but now,the same depond the China,they become junk stock.





A2 have more product than A2M,not only procuce fomula,but also the fresh milk,milkpowder.Not only the china market,but also Australia ,UK,USA.Before 2014,no fomula just the fresh milk,it also let A2M get rapid growth and the target market is australia.And now,the fomula is focus on China,the fresh milk still  in Australia and plan to explorer USA and UK.More product and more target market,let the A2M more competitive and decentralized risk.Now,which i looking forward for A2M is just the net profit.I'm convinced that A2M will be getting better and better in future.

I will take my view for the risk of China's fomula market later