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.
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