Shares in A2 Milk Company Ltd (ASX: A2M) continued to fall on Tuesday after a trading halt as investors digested some dire statistics out of China around the country's birthrate.
The company's shares fell more than 13% on Monday to be changing hands for $8.30, prompting the company to place its shares in a trading halt while it formulated an explanation for the fall to the ASX.
Company sheds little light
In an announcement that came out mid-afternoon yesterday, the company said there was no unannounced information that it believed could explain the share price fall.
It did say, very briefly, that the China National Bureau of Statistics "made its annual announcement of the number of newborns in China for the preceding year''.
What the company did not explain, and which has been reported in a number of media outlets, is that China's birthrate for 2025 fell to 5.63 births per thousand people, down from 6.39, and the lowest figure on record.
Given that A2 Milk derives a large proportion of its revenue from infant formula sales in China, the demographic shift away from having children is not good news for the company.
A2 Milk shares fell a further 1.9% on Tuesday morning to be changing hands for $8.13.
Guiding to revenue growth
A2 Milk in November upgraded its FY26 revenue guidance, saying that infant milk formula, other nutritionals, and liquid milk product categories were trading stronger than expected, and it was also benefiting from positive foreign currency movements.
It said at the time that it expected revenue growth in the double digits over the half and for its EBITDA margin to be 15% to 16%.
A2 Milk will report its first-half results on February 16.
The company also announced on Tuesday that Helena He would take on the role of Chief Marketing Officer at the company.
The company said in a statement:
Helena has significant experience in the China infant milk formula and vitamins, minerals and supplements (VMS) categories, and has both chief marketing officer and management experience working with leading global nutrition and fast-moving consumer goods companies including in Australia. Helena will; join a2 Milk Company from her most recent role as general manager, VMS – Haleon China, where she spent the past five years based in Shanghai leading the VMS category.
A2 Milk said Ms He's previous experience was with one of Europe's largest dairy companies, FrieslandCampina.
A2 Milk was valued at $6.02 billion at the close of trade on Monday.
