Disagree with your interpretation. I think you’ve misunderstood Bell Potters arguement.
The myth is that A2M pays a premium however Bell Potter contend that A2M are in fact paying a discounted rate. Your conclusion is that margins are shrinking which is also what Bell Potter says. Bell Potter are pushing back at the myth not supporting it.
The Bell Potter report says:- This analysis below would seem to challenge the widely held view that A2M pays a premium for its product and if anything would suggest it has quite a generous deal with SM1.
Today’s report from Synlait bears that statement out:- Management advised that canned infant formula volumes were up 5% on the prior corresponding period to 17,684 MT, but these were at lower margins.This was the result of the new pricing agreement entered into with a2 Milk Company last July,
A2M Price at posting:
$13.11 Sentiment: Hold Disclosure: Held
(20min delay)
