I think some analysts are just starting to get the business model. A milk/dairy business with A2M's volumes is not worth multi billions of dollars. A Nutrition company or a pharmaceutical company selling nutritional product can get to those valuations due to the crazy margins and trust which consumers have in their product to help their health. Trust is not something that can be bought; it is earned in various ways.
Two AGM's ago, the company announced it was no longer a dairy company; it was to transform into a nutrionals company. Not sure many got the significance of this at the time even though the chairman stated he thought the new nutritionals they were developing had a bigger market potential than IF.
We look now 2.5 years later and we see 90% of profits come from IF. So in theory we would be lucky to be 1/10 the valuation without the IF. So you are correct that the milk business in the US is not about selling milk, per se. It is about establishing credibility for the base product and marketing the business so it becomes familiar to Americans. At that time, they can release the high margin nutritionals which solve many of the same dairy related issues which dairy based nutritionals cause in the general population. It will be very difficult at that time for competitors to make any impact in that A2 nutritionals space due to having no credibility in A1-free milk.
A2M Price at posting:
$14.13 Sentiment: None Disclosure: Held
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