Fund Manager Summary
The fund managers believe that the outlook for A2 Milk Company Ltd (A2M) is promising, particularly due to its recent trading performance and product launches. In their opinion, the positive feedback on the new premium genesis product indicates strong market potential. Additionally, the ongoing consolidation in the Chinese market presents significant growth opportunities. With a robust $1bn cash balance and more flexible supplier contracts, the company has the necessary optionality for capital returns and EPS-accretive investments. This positions A2M favorably for future performance, making it an attractive investment opportunity.
Source: Trading View
Commentary From The Managers
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Pendal Group
24 Nov 2025
$9.35
Summary
- Pendal Group acknowledges A2 Milk's upgraded FY26 guidance.
- Revenue growth forecasted to shift from high single digit to low double digit.
- NPAT is now expected to be slightly ahead of FY25.
- This upgrade was largely anticipated by the market.
- Consensus estimates were already ahead of previous guidance.
- Multiple brokers had predicted this upgrade.
- Analyst estimates have adjusted marginally following the announcement.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Pendal Group
24 Nov 2025
$9.35
- Pendal Group acknowledges A2 Milk's upgraded FY26 guidance.
- Revenue growth forecasted to shift from high single digit to low double digit.
- NPAT is now expected to be slightly ahead of FY25.
- This upgrade was largely anticipated by the market.
- Consensus estimates were already ahead of previous guidance.
- Multiple brokers had predicted this upgrade.
- Analyst estimates have adjusted marginally following the announcement.
Summary
Wilson Asset Management
24 Nov 2025
$9.35
- A2 Milk Company upgraded FY2026 revenue growth guidance from high single digits to low double digits.
- Upgrade driven by strong English label performance as the market recovers.
- Key factors include label shifting, innovation, premiumisation, and e-commerce growth.
- Transformation activities at the Pōkeno milk processing facility are underway.
- Transition of the A2 Platinum product is planned for FY2027.
- Update led to earnings upgrades by analysts, reinforcing positive momentum.
Summary
Wilson Asset Management
20 Nov 2025
$9.30
- A2 Milk has shown strong growth, reflecting effective management execution.
- Fiscal year 2026 revenue guidance has been upgraded due to better-than-expected trading.
- Core product categories, including infant milk formula and liquid milk, are performing well.
- A weaker New Zealand dollar is anticipated to positively impact reported sales.
- Net impact on EBITDA from currency movements is expected to be minimal.
- The brand's strength is resonating with consumers in Australia and China.
- A2 Milk is positioned for potential success in additional international markets.
- Wilson Asset Management continues to hold due to these positive indicators.
Summary
Perpetual Asset Management
31 Oct 2025
$9.53
- A2 Milk showed a strong performance in October, increasing by 10.4% in the portfolio.
- Investors are optimistic about strategic initiatives being executed by the company.
- CEO Bortolussi announced a significant investment of nearly $500 million to expand in China.
- This investment includes a $257 million acquisition of the Pokeno manufacturing facility from Mengniu Dairy.
- Over $100 million will be allocated for site upgrades and working capital to support future growth.
- Management acknowledges China's declining birth rate and anticipates flat infant formula sales in the medium term.
- The company is diversifying beyond infant formula into products targeting older age groups.
- A2 Milk is expanding into smaller Chinese cities through online sales channels.
- Focus on premiumisation and innovation positions A2 Milk well in a challenging environment.
- Perpetual Asset Management remains optimistic about A2 Milk's growth trajectory, supported by strategic investments and product diversification.
- New Zealand's constructive trade relationship with China provides a stable foundation for long-term expansion.
Summary
Mint Asset Management
30 Sept 2025
$8.63
- Mint Asset Management rates A2 Milk CEO David Bortolussi highly for improving disclosure and earnings consistency since 2021.
- The current share price reflects expectations of success from new products linked to the Yashili license acquisition.
- Increased manufacturing share is anticipated to impact medium-term margins and short-term earnings negatively.
- The benefits from A2’s cash reserves are expected to diminish.
- While A2 Milk is a desirable stock, Mint Asset Management sees more attractive risk/reward opportunities elsewhere.
Summary
Ten Cap
30 Sept 2025
$8.63
- A2 Milk (A2M) experienced a strong re-rating following its results.
- Despite this, A2M underperformed the market in September.
- Feedback on market share trends remains positive.
- New product launches are also receiving favorable responses.
- There is potential for incremental upside with additional product lines in the coming years.
- Ten Cap continues to hold its position in A2M due to these positive indicators.
Summary
Antares Capital
30 Sept 2025
$8.63
- Antares Capital added A2 Milk to the portfolio in September.
- Encouraged by the recent acquisition of additional capacity for its infant milk formula businesses in China.
- This acquisition will help A2M continue its recent market share gains.
- Despite challenging Chinese demographics for infant milk formula sales, A2M is adapting.
- A2M is developing protein and calcium rich milk formulations for an aging Chinese population.
- Early feedback on these formulations has been very positive.
Summary
Wilson Asset Management
31 Aug 2025
$9.53
- The a2 Milk Company is a leading producer of dairy products made with a2 beta-casein protein across infant formula and liquid milk.
- For FY2025, the company reported record revenue of $1.9 billion, up 13.5%.
- EBITDA rose 17.1% to $274.3 million and net profit after tax increased 21.1% to $202.9 million.
- Growth was driven by English-label infant formula sales, which increased by 17.2%.
- There was a strong uplift in US liquid milk sales, up 22.1%.
- Despite contraction in the Chinese infant formula market, the company gained record market share.
- Exit rates in the second half of FY2025 indicate strong momentum into FY2026.
- The company reshaped its supply chain by acquiring a New Zealand nutritional facility.
- Divesting its stake in Mataura Valley Milk improved integration and flexibility.
- This restructuring presents significant margin upside over the coming years.
- Wilson Asset Management continues to hold because the company remains well placed to capitalize on structural demand for premium dairy products worldwide.
Summary
Perpetual Asset Management
31 Aug 2025
$9.53
- A2 Milk delivered standout performance in August, contributing + 18.7% to the portfolio.
- The company’s 21% rise in full-year profit and higher-than-expected results highlight its earnings power.
- A special NZ$300 million dividend was declared, showcasing strong cash generation capabilities.
- Management strengthened the firm’s position through strategic supply chain investment, including the acquisition of the Pokeno manufacturing facility.
- A2 expanded its market position in China, with 3.3% growth in China-label infant formula sales despite a market decline of 5.6%.
- Perpetual Asset Management remains optimistic about A2 Milk, citing its strong balance sheet and disciplined capital management.
- The company’s continued expansion across China and international markets provides a supportive backdrop for future growth.
Summary
Ten Cap
31 Aug 2025
$9.53
- A2 Milk (A2M) delivered a strong FY25 result.
- Capital return was a key highlight of the results.
- Successful streamlining of its long-awaited supply chain was achieved.
- These developments strengthen the company’s operating platform.
- Reinforces Ten Cap's conviction in A2 Milk’s growth trajectory.
Summary
Perpetual Asset Management
30 June 2025
$8.01
- Perpetual Asset Management acknowledges that the overweight position in A2 Milk (A2M) impacted relative performance negatively over the June quarter, with a decline of 1.01%.
- Recent softer China shipment data has put pressure on A2M shares, contributing to uncertainty.
- May export figures indicated a year-on-year decline in direct shipments to China, affecting sentiment around A2M's core segment.
- Despite these challenges, brand strength, premium market positioning, and diversification strategy are seen as positive factors for A2M.
- With recent share price weakness largely reflected, long-term demand for high-quality nutritional products remains strong.
- Perpetual Asset Management continues to hold a constructive outlook on A2M's future prospects.
Summary
Antares Capital
30 June 2025
$8.01
- A2 Milk commands approximately 9% market share in China, with strong brand recognition in Tier 1 cities.
- Strategic expansion into Tier 3–4 cities via 29,000 offline mum-and-baby stores is viewed positively.
- Launch of China-label IMF with new packaging and formula aligns with local preferences and regulatory expectations.
- Impact of local IMF brands' aggressive subsidies is limited due to differing target demographics.
- Chinese parents conduct detailed research on IMF products, often testing multiple brands before settling.
- Only 30% of mothers breastfeed, with many switching to IMF after 6–9 months, driving demand for Stages 2 and 3 (73% of the market).
- Births have declined again in Q1 2025, with potential annual births falling to 6 million by 2030.
- Some consumers are trading down from premium to mid-tier brands, especially in Stage 3 IMF.
- Chinese IMF companies are initiating various promotion programs, including free samples of up to six tins.
- The Daigou channel remains but has diminished; around 10% of A2 English-label IMF is still sold this way.
- Antares Capital's view on A2 Milk has become more balanced, recognizing near-term opportunities against significant structural challenges.
- For these reasons, A2 Milk is not currently held in any of Antares Capital's portfolios.
Summary
Ten Cap
31 Mar 2025
$7.93
- Ten Cap continues to hold in A2 Milk Company Ltd due to strong market share data.
- Successful rollout of new products has positively impacted A2M's position.
- Demographic developments in China are encouraging for the company's future.
- Announcement from Hohhot regarding financial incentives for families aims to boost birth rates.
- Ten Cap views the efficacy of policy measures as a crucial indicator of broader fiscal support.
- Monitoring fiscal support closely remains a key focus for Ten Cap.
Summary
Perpetual Asset Management
28 Feb 2025
$7.98
- A2 Milk was the top contributor to returns in the PIC portfolio in February, with the stock rising 35.3%.
- The management team continues to demonstrate its ability to execute operationally through supply constraints and other external and market headwinds.
- The company reported a stronger than expected first half financial year 2025 (FY25) result.
- FY25 guidance was upgraded, implying that A2 Milk sales and margins will accelerate and expand further in the second half of the year.
- Strong sales growth and market share gains in early-stage products for A2 are a strong lead indicator for future sales growth.
- The shift in consumer purchasing towards English label products presents a relative tailwind for the company over the medium term.
- Perpetual Asset Management remains optimistic about A2 Milk, given its strong balance sheet.
- Ongoing expansion into tier 2 and 3 cities in China presents substantial growth opportunities.
- The potential from the launch of new products and entry into new markets also contributes to growth prospects.
Summary
Ten Cap
28 Feb 2025
$7.98
- Ten Cap strategically increased their position in A2 Milk Company.
- A2M's growth is supported by strong market share data.
- Successful new product launches have positively impacted performance.
- There are supportive birth trends in China benefiting A2M.
- Despite a challenging market for infant formula, A2M achieved an impressive 10% growth.
- Ten Cap remains optimistic about accretive supply chain investments and capital returns to shareholders.
Summary
Wilson Asset Management
28 Feb 2025
$7.98
- a2 Milk Company is a global dairy company specializing in a2 protein dairy and infant milk formula products.
- Recent earnings results were strong, driven by continued strength in English-label sales and market share gains in China-label products.
- The company raised its full-year guidance, supported by increased sales of higher-margin products.
- Improved cost efficiencies and ongoing reductions in losses from its U.S. and Mataura Valley Milk businesses contributed to the positive outlook.
- a2 Milk declared its first dividend payment, indicating confidence in its financial position and future earnings trajectory.
- Despite challenges such as declining birth rates in China and issues in late-stage infant milk formula, the company is executing its turnaround strategy effectively.
- Performance in early-stage infant milk formula remains strong, supporting overall growth.
- The balance sheet is robust, with close to $1 billion in cash available for supply chain enhancements and capital management initiatives.
- Wilson Asset Management continues to hold a2 Milk as its valuation remains attractive relative to growth prospects.
Summary
Ten Cap
31 Jan 2025
$5.90
- A2 Milk (A2M) was added to Ten Cap's portfolio as of last month.
- Positive feedback on the launch of the new premium genesis product.
- Continued consolidation in the Chinese market.
- Company maintains a strong cash balance of $1bn.
- More flexible supplier contracts enhance business options.
- Provides optionality for capital returns and EPS-accretive investments.
- Ten Cap continues to hold due to the ongoing strength in trading performance.
Summary
Milford Asset Management
31 May 2024
$7.08
- A2 Milk has seen a notable increase of 14.9% in its performance.
- Milford Asset Management recognizes A2M's strong execution despite a challenging market.
- A2M's brand health metrics remain solid.
- The company has achieved market share gains across various distribution channels.
- Management expresses optimism regarding a recovery in China's birth rates.
Summary
Wilson Asset Management
28 Feb 2024
$5.77
- A2 Milk Company specializes in milk products containing only the A2 protein type.
- In February, the company announced its FY2024 half-year results, which exceeded market expectations.
- Reported a 3.7% revenue growth and 5.0% growth in EBITDA.
- Increased market share in China’s infant milk formula market, despite a decline in the birth rate.
- Declared an increased FY2024 revenue growth guidance from low to low-to-mid single-digit percent.
- Upcoming product launches, including a2 Gentle Gold and new infant milk formulas, are expected to drive future revenue growth.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"With a robust cash position and flexible contracts, A2 Milk seems poised for strategic growth. The buzz around its premium genesis product and consolidation in China suggests that the company may be on the brink of a compelling turnaround."
Last Updated: 24 Nov 2025
Query The Data
Frequently Asked Questions
Who is investing in A2 Milk Company Ltd (ASX:A2M)?
Fund managers including Ten Cap, Milford Asset Management, Antares Capital, Perpetual Asset Management, Wilson Asset Management, Pendal Group and Mint Asset Management have invested in A2 Milk Company Ltd (ASX:A2M).
Why do fund managers invest in A2 Milk Company Ltd?
Fund managers are investing in A2 Milk Company Ltd due to its solid trading performance, positive reception of its new premium product, and ongoing market consolidation in China. With a robust cash balance of $1 billion and flexible supplier contracts, the company is well-positioned for capital returns and earnings-per-share accretive investments.
What happened to A2 Milk Company Ltd (ASX:A2M)?
Fund managers are investing in A2 Milk Company Ltd due to its robust financial performance and strategic initiatives. The company reported a 13.5% revenue increase to $1.9 billion for FY2025, with strong growth in infant formula and liquid milk sales, particularly in the U.S. A2 Milk's successful supply chain streamlining, including the acquisition of a New Zealand facility, enhances operational efficiency and supports future growth, especially in the competitive Chinese market. With a focus on premium dairy products and diversification into new markets and demographics, A2 Milk is well-positioned for continued expansion and profitability.