a2 Milk entirely side-stepped the carnage faced by other market darlings over the last 12 months to gain more than 282% in this timeframe, and a remarkable 1,115% since listing in 2015. In this exclusive interview, Jonathan Koh from Greencape Capital outlines the additional tailwinds the market has missed with a2 Milk, and explains why he still sees value in the company.
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There needs to be more skepticism about the infant formula market. There is no fundamental, durable, competitive advantage that any of these companies claim to have. In the grey market, traders are increasingly moving to other brands such as 'aptamil' and 'karicare' within the span of six months. The large influx of capital in the industry within a short period of time poses a threat to investors. Paying up for growth in this market sounds good until companies fall short of their growth target due to the constant change in chinese consumer behaviour.