A2M, the large milk and infant formula company, held a decent AGM.

Most of their numbers went up (that’s good) but the extreme pressure in the total addressable market is grim (that’s bad).

As a reminder, the demographics in China are very challenging (fewer births, aging population) and that will likely lead to an ever more competitive backdrop, even as A2M are seemingly executing well.

Perhaps there is money to be made, but the valuation multiple is not exactly cheap (~19x forward) and it simply seems like there are easier ways to make money, elsewhere.

Perhaps, for us, we already have a similar trade on, in that we bought RMD (after it corrected from $40 to $25), and RMD “conceptually” has a similar headwind, e.g. potentially less demand for their product, in RMD’s case, due to technological intermediation, in A2M’s case from their target market disappearing.

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