Updates shares in paragraphs 1-3, adds analyst comment in paragraph 7

Jan 19 (Reuters) - Shares of New Zealand's a2 Milk ATM.NZ tumbled more than 11% on Monday to post their biggest drop in 17 months, after data showed that the total number of births in key market China fell to the lowest level in decades last year.

The dairy producer's New Zealand-listed shares fell 13.9% in their biggest intraday drop since August 19, 2024 to NZ$9.50, the lowest level since late September 2025.

The stock finished 11.2% lower at NZ$9.8, its lowest close since late September 2025. The company's Australia-listed shares A2M.AX slumped up to 14.8% before trading was halted.

Data from China's National Bureau of Statistics showed that the total number of births in China dropped to 7.92 million in 2025, its lowest in decades, from 9.54 million in the previous year.

Matt Montgomerie, a senior analyst at brokerage Forsyth Barr, attributed the share price drop to the latest China birth rate data and observed that markets moved instantaneously to the figures.

Montgomerie said in a note that their previous forecast of 8.6 million new births in China in 2026 now appeared to be optimistic, after the latest figures highlighted that China’s proactive birth/fertility policies were having limited impact.

"Multiples are too high with China's birth rate weakening. China data was weak everywhere. I would be worried if I owned Chinese retail exposure and that is what a2M offers," said Mathan Somasundaram, CEO at Deep Data Analytics.

In its annual report in August, a2Milk had flagged that it expected a decline in China's birth rate in 2025.

In 2024, the rate was higher due to a combination of delayed births from COVID years and the 'Year of the Dragon' effect.

(Reporting by Sherin Sunny in Bengaluru and Tom Westbrook in Singapore; Editing by Rashmi Aich and Subhranshu Sahu)

((Sherin.Sunny@thomsonreuters.com;))