Until now, I have avoided the so-called ASX-listed “China” companies (Australasian firms selling goods to consumers in China). Firstly, because there was just so much hype about the growth opportunity and secondly, I am wary about the risks foreign companies face when doing business in mainland China. While some may label this as “Chinaphobic”, recent actions by the Chinese regulators re-confirm my view that investors require an additional premium for the country specific investment risk.
However, I am coming around to the view that there is a bit of value in some of these stocks and the company that has caught my attention is the a2 Milk Company (ASX: A2M).
A2 Milk’s story