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A2 Milk stock drops 7.5% in a day

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A2 Milk stock drops 7.5% in a day

One of the strongest performers on the ASX (Australian Stock Exchange) in the last 12 months, A2 Milk, saw a 7.52% drop today after the announcement that Nestle is joining in on the A2 protein market in China.

There is a great demand in China for premium baby formula products and Nestle will be selling their Illuma brand with a new product line called Atwo. Nestle is a powerhouse in the food and drinks industry so this will definitely put pressure on A2 Milk to perform and hold a dominant market share in the international markets.

An A2 Milk spokesman said in the New Zealand Herald paper “(a2) has been monitoring a number of companies operating in China and considers that new entrants should assist in building credibility and awareness for the A1 protein-free proposition, and hence build the overall category more quickly,”

Investors are remaining confident with A2 Milk with many jumping in on the discounted price.

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Source: commsec

Today also saw the release of A2 Milk‘s latest investor presentation from Melbourne, Macquarie AG Forum.

Some highlights from their 1st half of 2018 report include:

  • ANZ segment revenue +47% and EBITDA +65% (EBITSA is earnings before interest, tax, depreciation and amortisation.)
  • Group revenue $434.7 million and operating EBITDA $143 million
  • Infant formula consumption market share in China of 5.4%
  • Group a2 Platinum infant formula revenue of $341 million up 85% on pcp

 

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