Shane Solly: Harbour Asset Management spokesperson on A2 Milk's share price surging

A2 Milk has upped its first-half net profit by 7.6 percent - overtaking expectations - and announced its first dividend of 8.5 cents a share.

Its infant milk formula (IMF) sales grew by 7.2 percent, led by its English label, which was up 13 percent, while China label sales were 2 percent higher.

Harbour Asset Management's Shane Solly unpacked the factors behind this change.

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Episode Transcript

Speaker 1 (00:00):
Ryan Bridge nineteen after six News Talk c e B
chained solies with a harbor asset management, Shane good evening,
get a Ryan great to have you on, Hey good day.
For a two their share price was it almost twenty
percent today? Up?

Speaker 2 (00:13):
Yeah, that's right. It was a real ripper, and it's
about it's been a tough run for a two. They've
probably been battling a really modest Chinese and they're keeping
is in for formula being sold into China. They beat
expectations pretty handling more than ten percent above expectations, really
driven by better revenue and margin, and they're upgraded for
next year as well, and they've talked about a dividend,

(00:35):
So you're really about them doing their thing, picking up
share in the Chinese info formula market. Those Chinese birth
rates still yet to show recovery, and they talked about
being on track to be making two billion dollars by
twenty twenty six with their new product launches and supply
chain improvement. So yeah, market got pretty excited up just
under twenty percent.

Speaker 1 (00:55):
Mixed results from the electricity generators. Is this the you know,
the price fights and the wholesale rates, the impact of
dry weather.

Speaker 2 (01:04):
Yeah, look, you've knowed it. Today was very much about
both Manowa and Contact Energy came out with some of
little below expectations that was about this dry weather and
impact on generation, and so we have seen both companies
come out with yes guidance for Contact that was saying
financial year twenty k twenty six, we're going to be
a little bit sort of more cautious. So maybe a

(01:25):
bit of conservatism, but certainly that dry weather we've been
seeing coming back to buy.

Speaker 1 (01:31):
Share prices for I mean, this is the problem, isn't
it If your company, if your business is exposed to
the New Zealand economy, you know you have been in
a bit of trouble.

Speaker 2 (01:43):
Yeah, it has been tough, but we're actually seeing a
number of companies starting to talk about green shoots. We
saw this last week with Bulk and Steel, when today
we've had Freightways come out with a similar comment that
you know, while things have been tough, they're seeing things
get less tough. We're seeing a bit of buying for
companies that are exposed to New zeal economy, things like Spark,

(02:04):
mu Zeum, the Telco, the Telecom mu Zeon, Fletcher Building
seeing a bit of a recovery. Some of it's about
as say, these better numbers coming from companies recently Freightways
of Vulcan, but also anticipating the Reserve Bank statement this Wednesday,
where the markets expecting another rate cut. We've seen this before,
Ryan back in twenty eight twenty nineteen. Takes New Zealand

(02:24):
Mark a little bit of time to respond to rate cups.

Speaker 1 (02:27):
You know.

Speaker 2 (02:27):
First that we had to roll is this period of
slow ecin on their activity before the lower rates kicking.
And we're seeing that now, so we might be seeing
the green shoots coming through. They still need to grow
a bit to really support company returns, but we're seeing
a lot more interests back in New Zealand companies listed
on the share market.

Speaker 1 (02:43):
The share price for several Aussie banks that are listed
here on our stock exchange a week today. What's behind that?

Speaker 2 (02:49):
Yeah, look we saw Duell listed, am Z and Westpac.
This share prices is a bit weaker today. So they're
listed on the New Zealand market and the Australian market.
And what we saw was Westpac released corterly update. There
was wicked and expected when it comes back to the
profit guidance for this first quarter is not enough to
meet expectations. A couple of things behind that hard to

(03:11):
believe for some, but their need interest margins were lower
than expected, so they're not making as much on their
lending as they previously did. And their revenue run rate
so the rate of new mortgages and so forth to
writing not quite heading expectations there. Only good news really
was cost coming in a bit LOWO. So yep, that
dragged the banks down and dragged down aims in respect
that are listed on the new.

Speaker 1 (03:31):
Is our market Shane, Thank you so much for that.
Great to have you on as always, that is Shane
solely Harbor Asset Management with your market update for the seven.
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