“I just got off a call with Treasury Wines Estates (TWE),” Jun Bei explained, when asked to comment on TWE, given China’s latest trade blow of a 212% tariff on this Aussie wine company. “I thought this way we are more informed,’ she added.

This cost imposition has smashed TWE’s expected profit by 30% and its share price has fallen by a similar amount. But Jun Bei is still a believer.

“Our investment case for TWE anchors around the tremendous value emerging in this name,” she said

“At its current price, investors are largely paying for the finished premium label sitting in TWE’s cellar and farm land, but this current political issue will ease eventually and a luxury brand like Penfolds won’t stay this cheap for long,” she maintained.

Source: Google

In his article today, James Dunn focused on A2 Milk and other infant formula stocks.

“A2M has been very successful in building a customer base in China that firmly believes in the premium nature of the product and that has been a case study of successful brand-building in China. The company is very confident that this supports its business in China. But would this survive arbitrary tariffs and suddenly altered rules?” James asked.

Jun Bei, who is also a big supporter of A2M, gives her take on James’ question.

“A2 is a different story,” she said. “It has been impacted by pantry destocking after reopening.

“Earnings will be impacted for 6 to 8 months but the long-term thesis won’t be affected.

“In addition, A2 is considered a NZ label and therefore not directly impacted by the Australian/China tension,” she said.

Source: Google