The a2 Milk Company Ltd (Australia) (ASX: A2M) share price is up 2.5% to $6.86 this morning after the company released a presentation and market update for the UBS Australasia conference. Some of the highlights of last year were covered, including a2's rapid growth, its grant of Chinese registration, growth in Chinese market share, and its investment in SYNLAIT FPO NZX (ASX: SM1), in which it owns an 8% stake.
Most interesting for a2 shareholders however, was the company's update on its performance so far in financial year 2018:
- Fresh milk sales higher in the first quarter compared to last year
- Initial shipments of fresh milk to Singapore
- Estimated Chinese market share of 4.1% in baby formula, up from 3.5% previously
- Increasing distribution in China via 'mother and baby stores' (MBS), an offline distribution channel
- Increasing distribution footprint in USA and UK
While the company did not provide formal guidance, it is expected that investors will receive a more meaningful update at a2 Milk's annual general meeting (AGM) next Tuesday, 21 November.
The updates today from a2 were encouraging as it shows the business is making progress on all fronts, including its research & development. It also shows that additional opportunities may be added over time, such as new products and new markets like Singapore, the EU, and the Middle East. However, the market has become very aware of a2's potential, and in my opinion the company is fully priced today.
