The a2 Milk Co Ltd

ATM: XNZE (NZL)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	NZD 6.00	Gfkkxn	Gbqdbytth

A2 Milk: Success in China Remains Crucial

Angus Hewitt

Dec 21, 2023

We maintain our NZD 8.00 (AUD 7.20) fair value estimate for a2Milk. China is its key battleground. And there are hurdles leaving shares in a2 Milk materially undervalued. The new registration process is weighing on the near term, and demographics and consumer trends are weighing on the longer term. Nevertheless, we expect a2 Milk to continue capturing share in a declining market as increasing premiumization partially offsets falling births in China.

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