A2 Milk attributes share surge to China stimulus measures
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The news: The A2 Milk Company has attributed last week's sudden surge in its share price to the recently announced economic stimulus measures in China, and flagged that it is in ongoing discussions over the acquisition of a manufacturing facility.
The numbers In response to an ASX price query, A2 Milk noted the economic stimulus measures announced by the Chinese government last week.
In response to these measures, A2 Milk said the China A 300 Consumer Staples index was up 27% last week, with the share prices of companies operating in the dairy and nutrition sector "increasing significantly" over the same period.
The likes of Ausnutria, Bright Dairy, Feihe, H&H, Mengniu and Yili increased in the range of 13% to 35%, the company noted.
A2 Milk said that given its exposure to Chinese consumer demand, it considers this to be "the most likely explanation" for the increase in its share price last week.
The New Zealand dairy producer paused trading on Friday after its shares rocketed 8.7% to $6.24.
The context: A2 Milk also said that it is in discussions over a potential acquisition of a manufacturing facility, as part of its push to develop infant milk formula manufacturing capability and increase China market access.
The company said the discussions are incomplete with no binding terms agreed, due diligence not yet completed, and there was "no certainty a transaction will occur".
What they said: "As such there is no further meaningful information to disclose at this stage," A2 Milk said.
The source: ASX announcement
