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MarketScreener Homepage  >  Equities  >  New Zealand Stock Exchange  >  The a2 Milk Company Limited    ATM   NZATME0002S8

THE A2 MILK COMPANY LIMITED

(ATM)
  Report
End-of-day quote. End-of-day quote New Zealand Stock Exchange - 10/21
15.46 NZD   -2.03%
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NZ's a2 Milk forecasts weaker revenue on disruption to Chinese sales, shares plunge

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09/27/2020 | 05:09pm EDT

* H1 revenue forecast at NZ$725 mln-NZ$775 mln

* ATM shares mark worst day since Aug. 21, 2019

Sept 28 (Reuters) - New Zealand's a2 Milk Co Ltd forecast lower first-half revenue on Monday as lockdown measures in Australia's Victoria state hurt its informal Chinese sales channel more than expected, sending its shares down more than 14%.

Sales from the "daigou" channel, where shoppers in China buy products in bulk from stores outside the country and import them informally, account for a significant portion of the dairy firm's infant milk formula (IMF) revenue in Australia and New Zealand.

The Auckland-based company said it already had been experiencing disruptions to its daigou network due to low Chinese tourist and international student numbers, and it now expected difficulties to continue through the first half of fiscal 2021.

The company forecast revenue between NZ$725 million ($474.95 million) and NZ$775 million for the six-months ended December 2020, compared with NZ$806.7 million reported a year ago.

Shares of a2 Milk plunged as much as 14.9% after the announcement, its worst daily performance since Aug. 21, 2019.

"The extended lockdowns in Victoria combined with less tourists and less students throughout the country has meant an increase in inventory and less demand," said Jeremy Sullivan, investment adviser at Christchurch-based advisor firm Hamilton Hindin Greene.

The company said it believed weak daigou trading to be a short-term logistics issue.

It added that demand for its IMF brand in China was still solid and expected full-year revenue between NZ$1.80 billion and NZ$1.90 billion, higher than last year's figure of NZ$1.73 billion but still below Refinitiv estimates of NZ$2.07 billion.

"Whilst revenues are growing year on year, a trend I think will continue, this miss is material and the market is acting in kind," Sullivan said.

Meanwhile, shares of Synlait Milk, which is partly owned by a2 Milk and also depends on daigou shoppers for its sales, were down about 6%. ($1 = 1.5300 New Zealand dollars) (Reporting by Arundhati Dutta and Anushka Trivedi in Bengaluru; Editing by Peter Cooney and Stephen Coates)


Stocks mentioned in the article
ChangeLast1st jan.
CLASS III MILK FUTURES (DC) - CMG (ELECTRONIC)/C1 0.56% 21.6 End-of-day quote.11.18%
CLASS IV MILK?FUTURES (GDK) - CMG (ELECTRONIC)/C1 -1.10% 13.52 End-of-day quote.-19.48%
DRY WHEY?FUTURES (DY) - CMG (ELECTRONIC)/C1 0.29% 34.3 End-of-day quote.4.10%
MILK (CLASS III) (DA) - CMR (FLOOR)/C1 0.09% 21.48 End-of-day quote.0.00%
NONFAT DRY MILK FUTURES (GNF) - CMG (ELECTRONIC)/C1 0.45% 107 End-of-day quote.-12.22%
SYNLAIT MILK LIMITED 0.00% 5.45 End-of-day quote.-38.70%
THE A2 MILK COMPANY LIMITED -2.03% 15.46 End-of-day quote.2.93%
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Financials
Sales 2021 1 831 M 1 219 M 1 219 M
Net income 2021 395 M 263 M 263 M
Net cash 2021 1 151 M 766 M 766 M
P/E ratio 2021 29,0x
Yield 2021 -
Capitalization 11 480 M 7 644 M 7 642 M
EV / Sales 2021 5,64x
EV / Sales 2022 4,38x
Nbr of Employees -
Free-Float 91,0%
Chart THE A2 MILK COMPANY LIMITED
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Technical analysis trends THE A2 MILK COMPANY LIMITED
Short TermMid-TermLong Term
TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 9
Average target price 18,27 NZD
Last Close Price 15,46 NZD
Spread / Highest target 48,8%
Spread / Average Target 18,2%
Spread / Lowest Target -15,9%
EPS Revisions
Managers
NameTitle
Geoffrey Howard Babidge Chief Executive Officer
David Lovat Hearn Chairman
Shareef Khan Chief Operations Officer
Strauss Race Chief Financial Officer
Julia Cecile Hoare Deputy Chairman