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Date : 14/09/2022

a2 Milk Share Price is Gaining – What You Need to Know

Investors are keeping a close eye on a2 Milk news. Here’s what you need to know.

a2 Milk share price (ASX: A2M) after hearing that Synlait Milk Ltd. (ASX: SM1) had its Chinese registration application accepted.

a2 Milk is one of the most significant infant formula manufacturers in ANZ. However, it must first receive clearance from China’s State Administration for Market Regulation (SAMR) to sell its products in China. Synlait makes a significant number of infant formula products sold by A2 Milk.

a2 Milk News: FY22 Results

a2 Milk ASX share price are trading at $5.70 and have gained by 2.5% today. The current market cap of the company is approximately 4.68 Billion NZD.

a2 milk news on tradingvew.com ASX A2M Stock Analysis

  1. The increase in revenue for A2M was 19.8%, coming in at $1.45 billion (or 11.2% if MVM is excluded).
  2. The significant increase in the margin was responsible for the 59% increase in the company’s EBITDA, which brought the total to $196.2 million.
  3. The company’s net profit after taxes (NPAT) jumped by 42.3%, reaching 114.7 million dollars.
  4. Earnings per share (EPS) increased by 51.8%, coming in at 16.5 cents per a2 Milk share.
  5. a2 Milk news for FY22 announces they came close with a net cash balance of $816.5 million.

The Chinese registration of a2 Milk

As of late September 2022, a2 Milk news confirms its registration for its infant formula product bearing a Chinese label was set to lapse.

Synlait received confirmation from SAMR that their current registration was successfully renewed, as predicted by a2 Milk. Synlait will be able to continue producing the a2 Milk product with the present registered China label until 21 February 2023, when production must switch to the new infant formula/GB standard.

All products produced up to this date can legally be sold in stores after this day. As a result, a2 Milk share price has benefited, and some of the near-term uncertainty has been removed.

New method of registering in the GB

Sylait and a2 Milk are collaborating closely on registering A2 Milk’s China-label infant formula products, which have been developed to meet the requirements of the new GB (infant formula) regulations in China. Although “time is undetermined and continues subject to SAMR approval,” this is also moving forward.

A critical factor in the company’s confidence in New Zealand’s ability to navigate China’s registration procedures is the cooperation between the Ministry for Primary Industries (MPI) and SAMR.

a2 Milk share price will benefit significantly from its approval.

CEO’s Remarks

David Bortolussi, President and CEO of a2 Milk, made the following statement:

In recent a2 Milk news, Bortolussi announced that the registration of their current product has been extended until late February 2023, and they look forward to continuing our close collaboration with Synlait and SAMR as they move forward with the registration of our China label infant formula product developed in accordance with China’s new GB standards.

He further added that they are still committed to the Chinese market and excited about the prospect of bringing their improved infant milk product to Chinese parents and newborns.

The a2 Milk Company is committed to adhering to SAMR’s rules and the timeline for this necessary registration.

A2M: Conclusion

There is significant doubt over the likelihood of a2 Milk regaining its previous prominence. Asian demand for its product (particularly through daigou) has decreased, and the company’s profit margin has shrunk compared to before the pandemic. While it may be gaining some of its lost ground, investors of a2 Milk shares will have to closely follow more a2 Milk news as the future success hinges mainly on the Chinese market.

 

Previous a2 Milk articles:

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