Citi sees a2 Milk, Bubs prospects curdled as daigou woes remain

Nuchev

28/07/2021 01:55

** Citi says Australian health and nutrition firm Nuchev's
 NUC.AX  quarterly report highlights the daigou channel is
likely to remain challenged over the short-term, posing a risk
to dairy firms
    ** Brokerage bearish on prospects of New Zealand dairy
producer a2 Milk  ATM.NZ   ATM.AX  and Australian infant formula
maker Bubs  BUB.AX 
    ** The daigou channel, through which people buy products
outside China and import them informally for Chinese
consumption, has been severely hit due to pandemic-driven curbs
on travel
    ** Citi maintains "sell" rating and A$6.05 PT on a2, sees
downside risk to medium-to-long term margins
    ** Keeps "sell/high risk" view with A$0.35 PT on Bubs, says
it would turn bullish on evidence of traction from co's new
'daigou 2.0' strategy and sustainable geographic expansion
    ** Up to Tuesday's close, ATM down ~47% this year, while BUB
down 25%
    

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Daigou channel woes pummel dairy firms during pandemic    https://tmsnrt.rs/3x9omem
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 (Reporting by Shashwat Awasthi)
 ((Shashwat.Awasthi@tr.com
mailto:Shashwat.Awasthi@thomsonreuters.com))