The a2 Milk Co Ltd

ATM: XNZE (NZL)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	NZD 9.00	Qqqmmt	Dgxjnzqq

A2 Milk Facing Headwinds From Coronavirus Disruption, but Brand Health and Narrow Moat Intact

Adam Fleck

Dec 24, 2020

Business Strategy and Outlook

The A2 Milk Company has built a brand that we expect will protect economic profits for years to come. While best known in Australia for its fresh milk, A2’s future growth hinges more upon further successful penetration of the Chinese infant formula market, which we estimate made up nearly 85% of the firm’s EBITDA in fiscal 2020.

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How we make money

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

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To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.

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