The A2 Milk Company Ltd (ASX: A2M) share price will be on watch on Wednesday following the release of Goldman Sachs' China Consumer Connections report for the month of February.
This report tracks the sales on Alibaba's Tmall/Taobao to give investors an idea of how particular items are selling on mainland China.
What happened in February?
According to the report, cosmetics and sporting goods continued their solid sales growth, whereas alcohol and snack related categories were in negative territory.
But I wouldn't suggest Treasury Wine Estates Ltd (ASX: TWE) shareholders worry about the slowdown in alcohol sales. The broker believes the timing of the Lunar New Year pulled forward demand into January.
In fact, over January and February Goldman believes Treasury Wine Estates actually delivered a 63% lift in sales compared to the prior corresponding period.
Another positive performer was the baby products category. This category has recovered from a slowdown in January, with infant milk formula achieving solid growth during the month.
Goldman estimates that a2 Milk Company's sales on the platforms grew 89% on the prior corresponding period and stole share away from Mead Johnson and Danone.
Elsewhere, Blackmores Limited (ASX: BKL) shareholders will be relieved to learn that its sales have been growing on these platforms. Goldman estimates that sales grew 28% during February.
Should you buy these shares?
Whilst I'm staying away from Blackmores until there has been a notable improvement in its overall performance, I believe this data reinforces my view that a2 Milk Company and Treasury Wine Estates could be good investments.
My pick of the two would have to be a2 Milk Company. Although its shares are changing hands at a premium to the market average, I believe the strong growth it has achieved justifies this.
Incidentally, Goldman Sachs has a buy rating and NZ$16.50 (A$15.99) price target on a2 Milk Company's shares.
