Speed bumps ahead for Kogan, a2 Milk
In this article published in The Australian, Roger discusses the speed bumps ahead for equities. There are market darlings today whose share prices will decline 50, 60, 70 and even 90 per cent in the next 12-24 months. Read here.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Jonathan Hall
:
Let me inform you about Nestles product Atwo is only sold online because Nestle has not got China Compulsory Certification for selling it into China
Atwo is being sold at prices 80% above A2’S infant formula
Atwo cannot compete on price because it will canabalise its own a1 Illuma infant formula products being sold into China
Atwo is being produced from 4 herds in Ireland its ability to ramp volume is non existent
To produce the A2 gene infant formula at any scale will take up to 5 years because you have to convert all the herds to the A2 gene – there is simply no a2 gene scale in Europe or America or Britain
Since A2milks last update in January
A2M infant formula is being sold in 6,700 stores in China following registration – this is new output
A2 infant formula is being sold in 350 outlets in Hong Kong (new)
A2 fresh milk and dairy products are being sold in 150 outlets in Singapore (new)
A2 fresh milk and dairy products are being sold in 1200 additional stores in the North Western US (in addition to the 3800 stores they already operate in the rest of the US)
A2 has launched 2000 movie billboards across China and the fastest growing infant formula brand as determined by Kandar
A2 has tripled infant formula production
Samples of 2000 stores throughout Australia show A2’s infant formula is sold out within an average of 3 hours after restocking
Scale competition is 5 years away – anybody launching now is simply doing so to test and are many years away from being a serious competitor because of herd genetics constraints
A2 is now going throughout the world through its partnership with Fronterra
In 5 years they will be the Coca Cola of MILK
The Chinese infant formula market is 20billion and the lastest figures have A2’s market share as 6.9% and growing fast.
The next update will be the fastest and highest revenue growth for A2 EVER
I hope you are short oh boy do I hope you are short
Roger Montgomery
:
Thanks Jonathan “In 5 years they will be the Coca Cola of MILK”. Coca Cola sells about 1.8 billion cans per day. I’ll put your 5 year target in the calendar. Further, if as you say, serious competition is 5 years away, that should be factored into your valuation as best as can be.