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Speaker 1: A busy reporting season has just finished for the ins

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Speaker 1: and exlisted companies. We'll talk about the winners and the

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Speaker 1: losers from the last four weeks. Jeremy Hutton from Milfed

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Speaker 1: Asset Management is with us right now.

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Speaker 2: Hey, Jeremy, good evening, Heather, Hey, doing very well.

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Speaker 1: Thank you. One of the big winners has got to

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Speaker 1: be A two Milk.

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Speaker 2: Yeah, A two Milk. They had another bumper reporting season.

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Speaker 2: Investors absolutely loved it. They sent the share price up

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Speaker 2: over twenty one percent in August alone, and the stock

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Speaker 2: is now up sixty percent so far year to date

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Speaker 2: in twenty twenty five. The A two Milk story, it

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Speaker 2: really can be boiled down to the fact that the

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Speaker 2: company is doing really well in a tough market. And

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Speaker 2: we know Chinese birth rates have been declining for a

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Speaker 2: number of years and that is a substantial headwind for

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Speaker 2: infant formula players and A two as well to overcome.

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Speaker 2: But now by market share, A two is the fourth

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Speaker 2: biggest player in the massive Chinese infant formula market. It's

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Speaker 2: bigger than huge competitors like Nesley and me Johnson and

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Speaker 2: other large Chinese and Western brands as well. So A

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Speaker 2: two continue to perform really well in a tough market.

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Speaker 1: Market really loved that transaction. That the purchase of the

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Speaker 1: plant in Poconoa.

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Speaker 2: Yeah, that's right, So the acquisition of the local Ushiley

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Speaker 2: dairy plant and Pocono The markets got really excited about this.

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Speaker 2: Now it wasn't so much about the financials of the deal,

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Speaker 2: but more that the site comes with these extra China

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Speaker 2: market registrations and these are effectively a license to operate

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Speaker 2: your brand or product in the Chinese market. And A two.

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Speaker 2: They currently only have one of these registered China label

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Speaker 2: products and it has been holding them back versus competitors,

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Speaker 2: they all have multiple products in the market. So they

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Speaker 2: get these two extra slots from the Pocono plant and

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Speaker 2: that means A two. You know, they can continue to grow,

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Speaker 2: bring out some new products and innovate and really de

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Speaker 2: risk the brand story a lot here.

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Speaker 1: Okay, on the other side of the equation, what happened

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Speaker 1: with Ebos.

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Speaker 2: Yeah, Ebos is a very tough start for the new CEO.

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Speaker 2: In his first update, the share price was down over

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Speaker 2: twenty percent, and this is very surprising for Eboss. It

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Speaker 2: is a great company. It's performed really well and always

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Speaker 2: consistently grows. Has done so over the past decade on

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Speaker 2: the nz X, but their forward guidance this time round

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Speaker 2: for the next financial year was for flat earnings and

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Speaker 2: the market got really caught off side by this. They

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Speaker 2: had to downgrade a lot of their outlooks for earnings.

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Speaker 2: But one could say it's a bit of a harsh

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Speaker 2: reaction as there is still confidence in the EBOS story.

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Speaker 2: Their core businesses of Australian pharmacies and animal care products

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Speaker 2: are still growing reasoningly reasonably well medium term. But sometimes,

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Speaker 2: particularly when it's a new CEO in the chair, the

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Speaker 2: market can shoot first and ask questions later, particularly if

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Speaker 2: they get the framing or the pitch wrong.

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Speaker 1: Now now that the Reserve Bank is leaning on reducing

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Speaker 1: the OCR, or what's the outlook for the rest of

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Speaker 1: the year, do you think.

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Speaker 2: Yeah, supportive Reserve Bank and OCR interest rate track should

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Speaker 2: be positive for the New Zealand market. The local market

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Speaker 2: has lagged key pairs substantially this year, but we are

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Speaker 2: considered a defensive, yield driven market. We don't have the

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Speaker 2: racy tech or AI stocks like they do overseas. We've

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Speaker 2: got more solid high dividend payers like telecoms companies, infrastructure,

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Speaker 2: real estate and these should perform well in a falling

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Speaker 2: interest rate environment. And then secondly I'll just call out

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Speaker 2: also the cyclical sectors, which is sort of the next leg,

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Speaker 2: like construction companies, retail exposed companies. They've really had a

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Speaker 2: tough time as we know in New Zealand, but again

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Speaker 2: should start to perform better when some of the economic

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Speaker 2: activity and data starts to improve.

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Speaker 1: Good stuff. Hey, Jeremy, thanks as always for talking us

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Speaker 1: through that. Jeremy Hutton, Milford Asset Management. For more from

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Speaker 1: Heather Duplessy Allen Drive, listen live to news Talks. It'd

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