A2M has a pretty massive expected earnings recovery, which can be a little hard to believe, given China’s shrinking (thus more competitive) addressable market.

The comments about margin are quite a bit below street, given FY23 expectations (FY22 13.5%, FY23 14.14%).

Still on 24x 2 year blended forward (so giving the multiple a fair bit of the strong forward EPS profile) makes for a high multiple (not quite double the market). What precisely are you paying for?

Mind you, I also thought that the IPH management commentary about business unit performance and margin was a downgrade, relative to street, and it was certainly not taken as such.

Back to A2, valuation, and expectations aside, the mgmt comments about approval to export to IMF to the US strike me as sensible/level-headed “it’s a highly competitive market, we are a long way away, freight costs are high, don’t get too excited about this opportunity, Mr Market”…

We will watch, with interest.

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