Tribeca Investments fund manager Jun Bei Liu tips A2 for China potential

Tribeca Investments fund manager Jun Bei Liu tips A2 milk for its potential expansion in the China market.

A2 is in a unique position to take advantage of the market in China, says Tribeca Investments fund manager Jun Bei Liu. Picture: Ryan Osland

Tribeca Investments fund manager Jun Bei Liu has recommended A2 milk for its potential expansion in the China market at the Sohn Hearts & Minds Conference in Sydney on Friday.

Liu said A2 price was not expensive when one considered its potential in the Chinese infant formula market.

She said A2 had a big potential for sales in China’s mother and baby store market as well as its current sales offline.

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“A2 is in a unique position to take advantage of the market in China,” she said.

She said its products were already some of the top 10 selling brands online in China.

“It is building a premium brand in a competitive market,” she said.

“Where others have failed, A2 has done it incredibly well.”

She said some people believed that the company’s share price was already expensive, but the current price did not take into account its growth potential in China.

“Some may say A2 looks expensive on traditional measurements, but it is not (expensive) for growth.”

Sohn Hearts & Minds 2019 graphic

Liu’s stock tip at last year’s Sohn Conference, a Chinese company called New Oriental Education and Technology which is listed on the New York Stock Exchange, was the second-highest performing stock of all those tipped at the 2018 Australian conference.

The company, which is the largest teacher of English language in China, saw its shares rise by more than 80 per cent in the period from the conference in November last year to the end of September.

Ms Liu, who manages the $340m Tribeca Alpha Plus Fund, said her fund is very positive on the growing Chinese consumer spending.

“It is a multi-decade thematic,” she said.

Ms Liu said there were estimates that the middle-class in Chinese would be spending more than $11 trillion over the next decade.

“The Chinese consumers will be spending an enormous amount of money,” she said. “We like companies that have an exposure on that front.”

She said there were 15 million babies born in China each year.

Chinese parents also fed their babies infant formula from birth until age five, unlike parents in the Western world.