Edgware Insights Pty Ltd

Wayne Murray

Independent Insight Provider

Equity Bottom-Up

Edgware has increased its conviction in our positive A2M investment thesis following a series of independent industry discussions. Our earnings have been revised upward. Short and medium term catalysts are attractive and the depressed global dairy industry plays to A2M’s strengths at this stage of their business development (they are lonely buyers, in a world of forced sellers).We remain strong believers in management’s ability to realise the long-term potential of the simple, powerful A2M brand across multiple dairy categories and geographic markets. And we are now more comfortable the journey does not require them to milk every single cow themselves.In preparing this research, we note that retail prices of a2 Platinum infant formulas have increased 5% since the start of March. This is a straightforward catalyst for the next earnings upgrade.Our new forecasts in FY16 of NZ$377m in revenue and NZ$73.5m operating EBITDA are 50% ahead of management guidance of NZ$335-350m and NZ$45-49m.

Edgware has increased its conviction in our positive A2M investment thesis following a series of independent industry discussions. Our earnings have been revised upward. Short and medium term catalysts are attractive and the depressed global dairy industry plays to A2M’s strengths at this stage of their business development (they are lonely buyers, in a world of forced sellers).We remain strong believers in management’s ability to realise the long-term potential of the simple, powerful A2M brand across multiple dairy categories and geographic markets. And we are now more comfortable the journey does not require them to milk every single cow themselves.In preparing this research, we note that retail prices of a2 Platinum infant formulas have increased 5% since the start of March. This is a straightforward catalyst for the next earnings upgrade.Our new forecasts in FY16 of NZ$377m in revenue and NZ$73.5m operating EBITDA are 50% ahead of management guidance of NZ$335-350m and NZ$45-49m.

A2M:ASX Industry Collaboration to Raise the Ceiling

A2 Milk Co Ltd

A2M:ASX Industry Collaboration to Raise the Ceiling