- The a2 Milk Company has delivered an impressive track record of growth across a range of diverse and complex markets.
- The growth trajectory it has achieved in China and the opportunities in this market offer a compelling long-term growth story.
- The revised earnings guidance highlights issues with its Cross Border E-Commerce sales channel which it needs to reduce reliance on.
- Although an exceptional company, the 20-35% earnings downgrade due to its CBEC sales channel and ongoing political trade disputes present material risks to the company.
- Accordingly, my advice is to take a prudent approach and await a lower entry point 10% below the current share price or news of an early China recovery.
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a2 Is An Exceptional Company But The Earning Guidance Is Spilt Milk