Group 1 - A2 Milk Company is undergoing a strategic transformation by acquiring and divesting assets, including the purchase of Yashili New Zealand Dairy Company for approximately NZD 282 million (around RMB 1.2 billion) from Mengniu Dairy's subsidiary [1] - The acquisition of the Yashili factory marks a significant milestone in A2's supply chain transformation strategy, allowing the company to gain access to more desired Chinese label registered formulas [2] - A2 Milk Company reported a 13.5% increase in revenue to NZD 1.902 billion and a 21.1% increase in net profit after tax (NPAT) to NZD 202.9 million for the fiscal year ending June 30, 2025 [2] Group 2 - Revenue growth by region includes a 13.9% increase in China and other Asian markets, a 22.5% increase in the U.S., and a 42.7% increase in Matou Valley Milk, while revenue in the Australia-New Zealand region remained flat [3] - By product category, A2 Milk Company saw a 9.9% increase in infant formula, a 3.3% increase in standard products, a 17.2% increase in English standard products, and a 14.4% increase in liquid milk [3] - A2 Milk Company achieved a record market share in the Chinese infant formula market, increasing from 7.1% in FY2024 to 8%, positioning itself among the top four brands in the world's largest infant formula market [3]

Core Viewpoint - A2 Milk Company announced the acquisition of Yashili New Zealand Dairy Co., Limited for approximately NZD 282 million (around RMB 1.2 billion), marking a significant step in its supply chain transformation strategy [1][3][4]. Group 1: Acquisition Details - The acquisition includes a fully integrated nutrition manufacturing facility located in Pokeno, North Island, New Zealand, and the registration certificates for two Chinese label infant formula products [3][4]. - The transaction has been approved by New Zealand's Overseas Investment Office (OIO) and is expected to be completed by September 1 [1][3]. - A2 plans to invest approximately NZD 100 million (around RMB 400 million) in the Pokeno facility over the next few years to enhance capacity and create over 100 new jobs [3][4]. Group 2: Strategic Implications - A2 aims to enter the NZD 23 billion (approximately RMB 1000 billion) Chinese label infant formula market through the acquisition, which is crucial for its growth strategy in China [7][10]. - The company intends to support long-term growth by expanding its product portfolio and innovating within the Chinese market, particularly in lower-tier cities and online channels [7][10]. - A2 has signed a long-term supply agreement with Fonterra to secure high-quality non-A1 protein milk sources for its products [10][12]. Group 3: Financial Aspects - A2 expects to receive net cash of approximately NZD 100 million from the sale of its 75% stake in Matou Valley Dairy to Open Country Dairy, which will result in an estimated book loss of NZD 130 million [4][10]. - The company plans to invest around NZD 1.2 billion in working capital and product development over the next few years [10][12]. - The initial payment for the acquisition will be NZD 145 million, with the remaining amount held in escrow until necessary regulatory approvals are obtained [11][12]. Group 4: Historical Context - A2 Milk Company, founded in 2000, has focused on A2 protein milk and has captured a significant market share in the A2 infant formula category, accounting for 58% as of June 2023 [16][18]. - The acquisition of Yashili's facility is seen as a strategic move to enhance A2's manufacturing capabilities and expedite the registration of more infant formula products in China [14][18].