Latest issue of ordinary shares and bonds by A2Milk Company and PE ratio and share price movement through last 3 years

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Part 2.5: Discussion on latest issue of ordinary shares and bonds by A2Milk Company
A2Milk has been listed on ASX and first public offering was made on 31 March, 2015
through issue of 633,326,979 fully paid ordinary shares. The latest issue of ordinary shares was
made on October 8, 2015, and it was fully subscribed on October 9, 2015. The total number fully
paid ordinary shares issued was 58.8 million and they are oversubscribed at price of NZ$0.68 per
share. “Goldman Sachs New Zealand Limited” has been appointed as sole arranger, underwriter
and book runner. The placement price is determined by a “book-build” and it is fully
underwritten at price of NZ$0.67 (The a2 Milk Company announces Capital Raising, 2015). The
share offerings have been offered to institutional investors in Australia, New Zealand and some
selected international jurisdictions. So, it can be said that all the shares have been offered to
public and no private placement was made. It is firm underwriting as underwriter has guaranteed
to purchase all the shares offered by issuer regardless they can be sold to investors (The a2 Milk
Company announces successful completion, 2015).
It has been observed during the last few years, no bond issue has been made by A2Milk
Company (Annual Report, 2019).
Part 2.6: Price Earnings (PE) ratio and share price movement of A2Milk Company
through last 3 years
Purpose of this section of the report is to compute the net profit and PE ratio of A2Milk
for last three years in order to prepare the movement the share price and PE movement during
the last three years. Share price data is taken on yearly basis as PE ratio can be determined on
yearly basis.
 Formula of Net Profit Margin = Net profit/Sales Revenue
 Formula of PE Ratio = Share price per share/Earning per share
Financial Data to calculate the PE Ratio for last three years
Items June, 2017 June, 2018 June, 2019
Amount in $'000
Net profit
$
90,646.00 $ 195,684.00
$
287,741.00
Sales Revenue
$
549,247.00 $ 922,354.00
$
1,304,336.00
Profit attributable to equity shareholders
$
90,646.00 $ 195,684.00
$
287,741.00
Weighted average number of ordinary
shares ('000) 716047.00 724685.00 733145.00
Earnings Per share (EPS)
$
0.13
$
0.27
$
0.39
Market Price per share (MPS) June,20__ $ $ $

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4.14 9.60 17.12
Net profit margin 16.50% 21.22% 22.06%
Price Earnings Ratio (PE Ratio) 32.70 35.55 43.62
Share Price on yearly basis (June,
20__)
$
4.14
$
9.60
$
17.12
(Annual report, 2018 and Annual report, 2019) and (Yahoo Finance, 2019)
June, 2017 June, 2018 June, 2019
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
32.70
35.55
43.62
$4.14
$9.60
$17.12
PE and share price movement in last three
years
16.50% 21.22% 22.06%
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
$18.00
$4.14
$9.60
$17.12
Share Price at different level of net profit
margin
In $