Reuters reported on February 20 that New Zealand A2 benefited from the expansion of its market share in China, with net profit of NZ$152.7 million in six months, an increase of 55.1% over the same period last year. Its share price soared more than 8% to a 11-month high of NZ$13.95, and its share price rose 38% in 2018, outperforming the 4.9% rise in the S&P/NZX 50 index.
Jane Delichka, A2's managing director and CEO, said the company's infant formula grew at all stages in the first half of the year, and the outlook for the second half of the year remained promising. By entering small cities, the company has increased its market share in China. A2 brand awareness in China still has a lot of room to improve, the company will re-invest resources in marketing activities in the second half of the year. Chinese parents have accepted the company's baby milk powder, which is easier to digest than traditional milk, Delichika said.
It is reported that with Nestle and other companies in China to introduce A1-free infant formula, the market competition will become increasingly fierce. Nestle said in a statement that its total revenue rose 41% in the six months to NZ$613.1 million, while revenue from China and other Asian markets grew by about 50%. Income growth in the second half of the year is expected to be roughly in line with that in the first half. In addition, New Zealand dairy giant Fonterra said it was signing an agreement on farms to supply milk to A2 in 2019/2020.
