Phil Barry: The a2 Milk Company Story – An Overview

The market value of Fonterra’s equity is $10.6 billion. Its NPAT in FY17 was $745 million. That gives it a P/E multiple of 14. 

The market value of The a2 Milk Company’s (ATM) equity is $6.1 billion – almost 60% of Fonterra’s. Its NPAT in FY17 was $91 million. That gives it a P/E multiple of 66. See Figure 1 below. 

So what? Clearly investors like ATM’s story. It is a dairy industry participant but it is not at all typical.