For A2 Milk, sustaining growth will be challenging over medium term - Citi

A2 Milk

12/09/2022 20:26

** Citi says approval for A2 Milk  A2M.AX  by China's State
Administration for Market Regulation (SAMR) was expected by the
market
    ** A2 on Monday noted that Synlait Milk  SML.NZ  got SAMR
approval for an extension to sell co's China-label formulation
until Feb. 21, 2023, when a new food safety legislation comes
into effect (https://bit.ly/3Byt5eP)
    ** Brokerage says news is unlikely to result in EPS
revisions
    ** Having market access is positive, however, it does not
guarantee end-consumer sell through - Citi
    ** Citi says sustaining growth over medium-term could be
challenging given the birth rate and resurgence of Chinese
brands 
    ** Four of 12 analysts rate the stock "buy" or higher, 4
"hold" and four "sell" or lower; their median PT is A$5.64–
Refinitiv Eikon data 
    ** Stock is up 4.4% this year, as of last close 

 (Reporting by Navya Mittal in Bengaluru)
 ((navya.mittal@thomsonreuters.com))