SML - Synlait Milk Ltd [Archive] - Page 10

Chanchay

10-05-2019, 09:30 AM

That's probably bad so I better go and take the carburetted big block for a spin after an extended idling period once the market closes. PS -Have just decided to take the dog for a walk instead.

Good to hear your doing your bit for the planet.

Unfortunately bad news for Synlait pokeno. NBR reporting today that appeal court has overruled high court regarding land us covenants.

Synlait should put something to market before opening I would think

minimoke

10-05-2019, 10:02 AM

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Beagle

10-05-2019, 10:20 AM

If NBR reported this 17 hours ago SML have plenty of time to prepare a market release. Very poor form not to do so before today's open! It may also impact ATM

Agree 100%. They're top notch at the really "important" stuff like saving some CO2 or ensuring their diversity and inclusion policies and practices are absolutely right up to the minute and current best possible practice but operationally if there's something that could...oh you know...stop a near $300m plant being constructed...oh that's not important and we'll just let the market know in due course if we can be bothered at all. Disc: Very pleased to be out.

BlackPeter

10-05-2019, 10:27 AM

Agree 100%. They're top notch at the really "important" stuff like saving some CO2 or ensuring their diversity and inclusion policies and practices are absolutely right up to the minute and current best possible practice but operationally if there's something that could...oh you know...stop a near $300m plant being constructed...oh that's not important and we'll just let the market know in due course if we can be bothered at all. Disc: Very pleased to be out.

Here we go: http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/334380/299650.pdf

It took them only 2 minutes after your post to prepare their announcement. Says however basically nothing.

Looks like they never thought about a plan B in case the court decides against them. Big surprise ...

minimoke

10-05-2019, 10:43 AM

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Beagle

10-05-2019, 10:44 AM

minimoke

10-05-2019, 10:46 AM

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minimoke

10-05-2019, 10:56 AM

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couta1

10-05-2019, 11:06 AM

Must be time for a complete take over by ATM at a discounted price. Lol

Chanchay

10-05-2019, 11:06 AM

The pink colour of the headline will appeal to some. I would have thought an appeal to the supreme court is almost certain but they're quite a long way into a ~ $260m debt funded construction process so what do they do in the meantime, stop construction ? What does this mean for suppliers who have signed up to supply milk from this spring ?

Talk about throwing the cat amongst the pigeons !

Trying to find details of the appeal at the moment. I'm selling most my holding this morning. I took longer to convince than the likes of beagle and friends but I'm coming around to their thinking.

If the appeal to supreme Court doesn't overturn then those effected by the land decision may seek damages from sml

Beagle

10-05-2019, 11:12 AM

Getting in front of the Supreme Court wont happen tomorrow and the SC have an appalling record with coming out with timely decisions.

You can add mind-reader to your C.V. mate as that's exactly what I was thinking.

That little pink p and little pink e has made me feel all fuzzy and warm. Such a nice touch. Must have taken ages to work out where those delicate little colours should be placed. Yeah I noticed that too, where's my pink teddy bear ?, this is so incredibly PC I am really tearing up and need a cuddle lol

minimoke

10-05-2019, 11:17 AM

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Beagle

10-05-2019, 11:19 AM

Yeah, it could be 1:2 scrip bid shortly the way things are going....and to think these two were matching share price pace, stride for stride at one stage last year.

minimoke

10-05-2019, 11:36 AM

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couta1

10-05-2019, 11:40 AM

Could be to. Bin SML brands, keep their certifications and secure your supply line Yep brands that are struggling to get certification anyways.

mondograss

10-05-2019, 11:41 AM

The original high court decision:
https://forms.justice.govt.nz/search/Documents/pdf/jdo/d0/alfresco/service/api/node/content/workspace/SpacesStore/04823f80-116e-4eff-a547-79206346e58e/04823f80-116e-4eff-a547-79206346e58e.pdf

Basically (from my quick read through) there's some land that was subject to covenants that it stay as farming land because Winstone were going to develop a quarry nearby. They never did that, the land was rezoned Industrial 2 and other factories (Hynds concrete and Yashili dairy) have now been built on it or nearby. The high court decided that because of the rezoning and the changing nature of Pokeno it wasn't reasonable to continue the covenants. Apparently only a small part of Synlaits land extends into the area affected by the covenant. The owner of the original Winstone site seems to think he can have it rezoned residential and naturally wants to protect the rural outlook.

So it will most likely come down to an issue of "how much $ do you want to go away". They've already argued about compensation here:
https://forms.justice.govt.nz/search/Documents/pdf/jdo/d0/alfresco/service/api/node/content/workspace/SpacesStore/04823f80-116e-4eff-a547-79206346e58e/04823f80-116e-4eff-a547-79206346e58e.pdf

bonne vie

10-05-2019, 11:42 AM

Question - in the March update the Pokeno build was on track. So at what date was an appeal to reverse the covenants decision lodged with the Supeme Court? Has that appeal been lodged, considered and upheld all within 2 months? Looks like SC worked fast in this instance??

minimoke

10-05-2019, 11:45 AM

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winner69

10-05-2019, 11:46 AM

Market reaction down quite a bit

I sense the likesy of couta might be in for a quickie around the 10 buck marker when the ASX wakes up

bonne vie

10-05-2019, 12:09 PM

(15 minutes and the Ozzies wake up)[/QUOTE] Looking back at the announcements there does not appear to have been one. But having said that the court decisions mondograss refers to and 2018 company updates appear to confirm building had started before those decisions were made. Tried to read them but mainly gooblygook but would be interesting to see a timeline of the Pokeno purchase - build and what SML based it's decision to begin build before all covenant issues were resolved. Extract from part 52 of 13 Nov 2018 decision "Mr Bishop candidly acknowledged that he did not obtain anylegal advice before he signed the agreement with Synlait. The agreement with Synlaitincluded an obligation on the part of Stonehill to procure the removal of the covenants.Negotiation with the previous owner of NZIPL’s land, Havelock Bluff Limited, came to nothing because they were in the process of selling it to NZIPL. In the meantime,Synlait has proceeded with construction of the plant, notwithstanding that it has notyet settled on the purchase." Looks like a commercial decision once risks/rewards weighed up.

mondograss

10-05-2019, 12:25 PM

Yes, so Synlait might sue Stonehill for compensation for failing to procure the removal of the covenants or Stonehill might be required to shell out to NZIPL to get them to drop their opposition. Either way it looks like it is mostly Stonehills problem. Note that it only affects a relatively small part of Synlaits land so if they haven't built on that bit then potentially it's not a big impediment to the factory itself.

mondograss

10-05-2019, 12:26 PM

Having said the above, you'd think Synlait could offer a bit more clarity and reassurance than they currently have.

minimoke

10-05-2019, 12:30 PM

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minimoke

10-05-2019, 12:42 PM

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Beagle

10-05-2019, 01:03 PM

Having said the above, you'd think Synlait could offer a bit more clarity and reassurance than they currently have.

So much effort goes into ensuring the communication headlines are in the right colour there's only so much intellectual horsepower left to write the content :D

couta1

10-05-2019, 01:08 PM

You can add mind-reader to your C.V. mate as that's exactly what I was thinking.

Yeah I noticed that too, where's my pink teddy bear ?, this is so incredibly PC I am really tearing up and need a cuddle lol Lol I'm just about to give my life like Baboon a hug that I bought back from SA, seems the manly thing to do, I'll leave the teddy bears to you. PS-I just sent you a pic of him.

minimoke

10-05-2019, 01:13 PM

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Beagle

10-05-2019, 01:38 PM

Just as a bit of constructive criticism I do think they may have over cooked the font size. They may want a few meetings to resolve that before the next release. (my suggestion, to save them a bob or two is: BIG FONT for positive announcements. little font for negative announcements

Jessica Thorn has her email address on the announcement mate and I am sure she and Leon would love to hear your constructive criticism and what you think about the headline pink colour….go on...tell them all about it :D

minimoke

10-05-2019, 01:40 PM

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minimoke

10-05-2019, 01:46 PM

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couta1

10-05-2019, 01:47 PM

I'm so very pleased I'm out of sml . I dont have to put up with crap announcements like this one the other day "

Synlait (NZX: SML; ASX: SM1) applauds the government's bold Zero Carbon Bill

announcement today, including new methane targets."

It's bad enough when the school kids get brainwashed by all this Man induced climate change crap and now some of our companies are following suite. Lol. PS-Notice I said Man induced, we all know the climate is currently changing it's cycle.

minimoke

10-05-2019, 02:30 PM

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stef

10-05-2019, 02:40 PM

what if they offer to paint the factory pink? that would make the problem go away

dreamcatcher

10-05-2019, 03:19 PM

Synlait Confident in Actions Regarding Pokeno Site10/5/2019, 2:40 pm GENERAL Synlait (NZX: SML; ASX: SM1) has acted in accordance with legal advice at all times in respect to land at Pokeno which was subject to a decision in the Court of Appeal yesterday.
In February 2018 Synlait announced the conditional purchase of 28 hectares of land in Pokeno to establish its second nutritional powder manufacturing site.
Due to the Pokeno land being rezoned industrial land from grazing land, and the development in the Pokeno area including the building of another dairy plant, Synlait was confident the land covenants no longer remained relevant. This was confirmed when the High Court removed the covenant in November 2018.
“It made sense as a result of zoning and proper planning that allowed for industrial zoning that the land covenants would be removed by the court which they were,” says Synlait’s CEO, Leon Clement.
Synlait only took legal title to the land after the High Court decision removing the land covenants.
“Yesterday’s Court of Appeal decision was unexpected,” he says.
Synlait will continue to engage with all parties involved and is confident the covenants issue should be able to be resolved by the parties.
The company remains committed to the location.
“We intend to continue with our plans at Pokeno,” says Mr Clement.

I think that says it all ............. "WE INTENT TO CONTINUE WITH OUR PLANS AT POKENO"

minimoke

10-05-2019, 03:41 PM

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mondograss

10-05-2019, 04:43 PM

This article gives a bit more detail:
https://www.stuff.co.nz/business/112619906/shares-fall-after-hiccup-for-synlaits-new-milk-factory-at-pokeno

Including this bit:
"The February 2018 agreement to buy 28 hectares included conditions that if Stonehill was unable to extinguish the covenants then Synlait could choose to take possession without any obligation to pay interest, cancel the deal, or settle the purchase, "without prejudice to its rights, including as to compensation"."

Beagle

10-05-2019, 05:55 PM

Sounds like a deal will be sorted out with the original land owner paying some noise tax to the affected neighbour. Well...that's what common sense would suggest anyway but as we see with the current trade negotiations between the Chinese and American's common sense isn't always in abundant supply.

Ggcc

10-05-2019, 06:04 PM

I still think this company will be great one day. I have sold out at $10.85 a few weeks ago for HGH. I do think at this point in time SML looks like a longterm hold.

Beagle

13-05-2019, 11:59 AM

Hmmmmmmmm http://www.scoop.co.nz/stories/BU1905/S00359/synlait-may-have-been-too-hasty-on-pokeno-plant.htm

RTM

13-05-2019, 12:08 PM

Hmmmmmmmm http://www.scoop.co.nz/stories/BU1905/S00359/synlait-may-have-been-too-hasty-on-pokeno-plant.htm

What a cock up. One would have thought they could have found a site without covenants on it somewhere ? Why take the risk ? I wonder if it was a lot cheaper because of the covenants ?

Disc: Out a wee while ago, nice gain, could have been better.

minimoke

13-05-2019, 12:28 PM

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Beagle

13-05-2019, 12:39 PM

Not the only time they've been "extremely economical" with the real facts either. The new contract with ATM they signed in 2018 with significantly lower processing margins not disclosed. I think Penno did a very poor job in his last year or so as CEO and the new guy seems absolutely obsessed with being politically correct and all things inclusive as though these are the primary objectives of the company for goodness sake and coming from Fonterror is hardly a ringing endorsement is it lol.

Disc: Very pleased to be out and not looking to get back in at any price.

minimoke

13-05-2019, 12:51 PM

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kiora

13-05-2019, 01:13 PM

I wonder where Waikato District Council sits in all of this with issuing the building consents?

whatsup

13-05-2019, 01:47 PM

I wonder where Waikato District Council sits in all of this with issuing the building consents?

Oh what a mess---------- deceive !

cymonger

13-05-2019, 02:02 PM

It's hard to believe that a company that has so many productive tailwinds blowing at their back does so many stupid things. They've got an absurd sense of priorities. It's like they've got a whole team of people working on virtue signaling and like a student intern working on the logistics of the business.

I'm gonna hold until I break even (10.20). Hope it's sooner than later. I highly doubt this latest mess will actually derail the plant, but it's still a stupid mistake that will cost them time and money.

Beagle

13-05-2019, 02:20 PM

It's hard to believe that a company that has so many productive tailwinds blowing at their back does so many stupid things. They've got an absurd sense of priorities. It's like they've got a whole team of people working on virtue signaling and like a student intern working on the logistics of the business.

Yes that is my sense of it too, absolutely ridiculous !

Well said Minimoke.

SilverBack

14-05-2019, 10:41 PM

Oh what a mess---------- deceive !

Bit of a mess yes, but what you would have done if you were a Board member and responsible for the company's progress?
You, took legal advice and proceeded accordingly. Other party takes offence and brings action. Other party is recalcitrant and rejects any out of court settlement. In the meantime significant supply contracts are at risk but High Court rules in your favour and so you commence construction. Worth the risk? All depends on the value of the contracts and surety of the sale contract with yet a different party that you entered into?
Even now, the company still has other avenues to follow so that the factory can go to completion. Gains from supply contracts can outweigh follow on cost to resolve. Is this a valid business decision or stupidity or just absolutely ridiculous?

silverblizzard888

15-05-2019, 02:43 AM

One of the problems of high valuations and pressures to grow. If SML had waited for all legal procedures to clear first then they wouldn't be stuck in a situation where either they will have to spend a lot of money paying off the neighbor or buying them out or risk a whole factory becoming a 'quarry' artifact. To think that the factory is near completion too, at least this cash cow still is a profitable business, problem is its just not a very bright cow when it comes to crossing the river and getting stuck, starting to look a little pink from the blushing.

RTM

15-05-2019, 07:43 AM

Bit of a mess yes, but what you would have done if you were a Board member and responsible for the company's progress?
You, took legal advice and proceeded accordingly. Other party takes offence and brings action. Other party is recalcitrant and rejects any out of court settlement. In the meantime significant supply contracts are at risk but High Court rules in your favour and so you commence construction. Worth the risk? All depends on the value of the contracts and surety of the sale contract with yet a different party that you entered into?
Even now, the company still has other avenues to follow so that the factory can go to completion. Gains from supply contracts can outweigh follow on cost to resolve. Is this a valid business decision or stupidity or just absolutely ridiculous?

They shouldn't have purchased that land to build their factory. They should have found another plot without covenants. And yes...they might have had to pay a bit more. Suspect they are going to pay more now anyway, maybe a lot more, to get this resolved. I wonder what A2M is thinking ?

BlackPeter

15-05-2019, 08:44 AM

They shouldn't have purchased that land to build their factory. They should have found another plot without covenants. And yes...they might have had to pay a bit more. Suspect they are going to pay more now anyway, maybe a lot more, to get this resolved. I wonder what A2M is thinking ?

Correct. And let's face it - it is not hard to find a suitable place with clean title in rural NZ if you have the money and are creating plenty of good jobs.

Buying a place with covenants preventing you to do what you want to do with the land and subsequently starting to build without being sure the covenants are removed is plain stupid. It does not help that they made an agreement to remove the covenants with somebody who neither owns nor controls them.

Chanchay

15-05-2019, 08:59 AM

There's is a bunch of unknowns. With the plant finished there will need to be either an appeal or a settlement negotiated for a sum. The size of the sum is unknown but would expect it to be rather small compared to the establishment of the plant.

Very poor sentiment from investors. I got out as previously said but if we see a drop sub 9 I think I will be back in.

Despite the bizzare priorities of management I think as said above. Lots of tail winds. Atm are really propping up the co and I would like to benefit on both sides of the atm,sml equation.

Perhaps investing despite inept management is youthful foolishness, I guess I will find out.

Beagle

15-05-2019, 09:04 AM

Inept management almost always leads to poor results notwithstanding industry dynamics tailwinds or otherwise.

I no longer see a reason to hold this stock...far better off in ATM.

minimoke

15-05-2019, 09:19 AM

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Beagle

15-05-2019, 09:42 AM

There is two ways of valuing a settlement. One is compensation for the loss of the enjoyment of the amenity provided by the Covenants. The other is eh value of a production facility to be free of any risks associated with covenants.

I would think the covenant owner has already been offered compo prior to the sale / purchase agreement going through. He turned it down. I assume a without prejudice offer would also have been made when this went to court at a higher level than the original offer. Obviously it was turned down.

SML are now in a very high risk environment. Appeal court decision are not ones to be taken lightly. That is one very high legal decision. They only get one more throw of the dice at Supreme Court level. Loose that and who knows what could happen.

A very, very poor decision by previous management to turn that first sod of soil before the covenant issue was sorted.

If they have made one poor decision we loose confidence in the rest of their decision making ability. There focus on pretty fonts, te reo and support of toothless climate change legislation tells me they have their eye well off the ball. Still glad I exited when I did.

A casual observer would be forgiven for thinking they didn't know a legal challenge under appeal was underway. I think there is significant risk here and real risk to shareholders in the cavalier manner in which the company simply doesn't tell shareholders material information, (new much lower margin contract with ATM another classic example of company doublespeak). I am so unimpressed I wouldn't be back even if the share price started with a $6 dollar handle.

minimoke

15-05-2019, 10:11 AM

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Beagle

15-05-2019, 10:51 AM

On 28 June last year SML felt a need to make a market announcement
"Synlait Milk (NZX: SML; ASX: SM1) has committed to reducing its environmental impact significantly over the next decade by targeting key areas of their value chain."
but chose not to announce the covenant affected land they were building on was being subjected to a high court hearing and then a subsequent Appeal Court hearing.

You have to wonder what else they aren’t telling the market.

You really do. I know both you and I as former shareholders are both extremely disappointed to see shareholders communicated with in such an offhand manner and really one has to wonder whether management can be trusted anymore. I doubt I will bother to be back at any stage although never say never and if it got really cheap and was a takeover target then it could be game on again. I would be hoping any acquirer would completely clean out the senior executive team and instill a new culture.

mondograss

15-05-2019, 10:52 AM

The full appeal court decision:
https://forms.justice.govt.nz/search/Documents/pdf/jdo/65/alfresco/service/api/node/content/workspace/SpacesStore/f2e68638-58c3-4efd-8453-d46c9fa9d2b3/f2e68638-58c3-4efd-8453-d46c9fa9d2b3.pdf

Although only 7.2 hectares of Synlait's land is actually affected by the covenants, it turns out that it's the flattest part and they've built the factory almost entirely in that space. It's also pretty clear that the holders of the covenants have absolutely no intention of giving them up. The main sticking point appears to be that the covenant holders want to make their land residential but if they can't they want to develop the quarry. Or possibly they want to develop the quarry for a while to service the residential development in terms of aggregates etc. The concern is that if the covenants are set aside, Synlait could then oppose the quarry getting resource consent because of the impact on its factory.

minimoke

15-05-2019, 11:08 AM

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minimoke

15-05-2019, 11:15 AM

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mondograss

15-05-2019, 11:22 AM

silverblizzard888

15-05-2019, 11:39 AM

It's also pretty clear that Stonehill (who Synlait were buying the land from) were left in no uncertain terms by NZIPL that letting Synlait go ahead and build the factory was going to be a really bad idea.

Well Synlait can always go after Stonehill. Either way time and money will be wasted and shareholders aren't happy

minimoke

15-05-2019, 11:40 AM

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minimoke

15-05-2019, 11:42 AM

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Beagle

15-05-2019, 11:56 AM

silverblizzard888

15-05-2019, 11:57 AM

Ony as far as Stonhill is able to pay compenasiton

From the sale agreement

"(c) settle the agreement, without prejudice to its rights, including as tocompensation."
What if Stonehill run out of loot? And NZIPL succeed in getting a permanent injunction on the use of the land for purposes other than lifestyle and grazing?

Thats the problem with that route, Stinehill probably won't have a extra 100 million lying around. Currently NZIPL does have the stronger claim. I'm sure the factory has cost a lot, so maybe even more future planning can be done and they can buy a extra 84.5 Hectares haha. This is a problem that only a lot of money can solve, either by buying something at a huge premium or ending this in a huge loss.

mondograss

15-05-2019, 12:02 PM

Thats the problem with that root, they probably won't have a extra 100 million lying around. Currently NZIPL does have the stronger claim. I'm sure the factory has cost a lot, so maybe even more future planning can be done and they can buy a extra 84.5 Hectares haha. This is a problem that only a lot of money can solve, either by buying something at a huge premium or ending this in a huge loss.

It depends a little bit on how much NZIPL is concerned about the factory itself vs the presence of the factory derailing its plans for its own land. If the latter then you'd think Synlait could contract out of the issue by agreeing not to contest any resource consent that NZIPL put up or agree to new covenants that allow both parties to do as they please. If the former then I'd say Synlait are screwed and Stonehill are never going to have enough money to compensate them.

Beagle

15-05-2019, 12:04 PM

I think its high time to look at a worse case scenario. $260m / 179m shares = $1.45 per share plus loss of future earnings, possible compensation to affected farmers who have signed for the 2019/20 season, legal costs, appellant legal costs plus possible damages to ATM for loss of contractual supply + possible consequential damages, + reputational damage, less what's possibly recoverable from Stonehill, if anything. Its potentially extremely UGLY !
Let's not forget this is a very highly indebted company with all this new capacity built on bank debt. I am sure their bankers would be "most impressed" Possible cash issue coming to fund this massive **** up ?

minimoke

15-05-2019, 12:14 PM

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minimoke

15-05-2019, 12:14 PM

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minimoke

15-05-2019, 12:37 PM

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minimoke

15-05-2019, 12:42 PM

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mondograss

15-05-2019, 12:45 PM

It does seem though that SML have kept themselves at arms length and relied on STL to get it sorted which was clearly a mistake as they've not proven capable and may not have negotiated in good faith.

It may be that now SML has to get involved in earnest (and from a very weak position) and then seek recompense from STL later.

It was interesting reading the judgement that no-one was clear how much the possible quarry might impact on the dairy factory, which would imply that no-one had asked SML whether it would necessarily be a problem. One would assume that dairy factories are fairly tightly contained against outside contaminants so dust etc would surely not be an issue.

minimoke

15-05-2019, 01:03 PM

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Beagle

15-05-2019, 01:37 PM

777

15-05-2019, 01:43 PM

Surely a reasonably large shareholder (ATM) has had something to say about it all.

minimoke

15-05-2019, 01:45 PM

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minimoke

15-05-2019, 01:47 PM

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Beagle

15-05-2019, 02:25 PM

Wishing we were shareholders now. AGM will be interesting. Will need to cut short the intro and get on with the weighty stuff.

Cut the intro real short. Could be worth buying just 100 shares to bark up a storm at the AGM but cheaper to watch this comedy of errors unravel from the cheap seats.
I imagine ATM will be really "thrilled" if they have to backtrack on their Pokeno plans.

silverblizzard888

15-05-2019, 02:39 PM

Going by the sentiment in the case it sounds more the fact that NZIPL more wanted compensation and has dragged every point including the possibility they might want to build a quarry. I think compensation for removal or change of covenants should sort this out, but they will want a huge sum now that they know SML are at their mercy.

Going by Pokeno land prices I'd say the land Sylait bought probably cost them in the region of $15 million as RV value on 45 Mcdonald Road is $13 million and Im sure they paid a premium.
https://online.waikatodc.govt.nz/services/Property/Rates/Property?propertyno=2013689

While NZIPL probably paid $20 million since there land is filled with hills and no close by infastructure.

NZIPL probably want $5 million, STL/SML says its too steep, but in the end they will pay. Both parties will be happy and that will be the end of that matter.

10541

Rough drawing using paint haha, not exact accuracy on boundary but at least you can see where the factory has been built and the land where the convenant covers.

mondograss

15-05-2019, 02:39 PM

SML have been neck deep in the dodo from day one. They knew of the covenants because they have the compo clause in the purchase agreement. It is disingenuous of them to say in their latest Announcement:
“Synlait only took legal title to the land after the High Court decision removing the land covenants."

They turned soil without legal title in full knowledge of the covenants. Its shareholders who did not know.

Oh I'm not saying SML didn't know and frankly I'm flabbergasted they didn't think to disclose it to the market.

I'm just saying that from a negotiations standpoint with NZIPL it seems like they've stayed out of it and left it to STL to do. And given STL's failure to get an agreement or even to serve all the affected parties it makes me wonder whether STL were really negotiating in good faith or were even necessarily telling SML the truth about what was going on.

RTM

15-05-2019, 02:49 PM

10541

Rough drawing using paint haha, not exact accuracy on boundary but at least you can see where the factory has been built and the land where the convenant covers.

Thanks. Lot of car parks (Maybe they aren't but I needed more characters.) !

minimoke

15-05-2019, 02:58 PM

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mondograss

15-05-2019, 03:18 PM

And where is our Financial Markets regulator on this?

Sorry - couldn't help but lighten the afternoon with a joke.

They were too busy that day giving SKL a speeding ticket.

winner69

15-05-2019, 06:06 PM

Solid 2% rise in SML share price today .....getting back to where it was before the latest announcement

Baa_Baa

15-05-2019, 06:32 PM

Solid 2% rise in SML share price today .....getting back to where it was before the latest announcement

Lucky it didn't lose a cent for every post from the non-holders today! I guess the market is a bit more ambivalent about the situation and the risks, might have seen a bargain in the overreaction from yesterday.

minimoke

15-05-2019, 09:59 PM

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silverblizzard888

16-05-2019, 12:03 AM

BlackPeter

16-05-2019, 08:43 AM

silverblizzard888

16-05-2019, 08:50 AM

PE of 25 not expensive? I guess you need a lot of sustainable growth built in to justify this PE - and I am wondering how they are going to maintain this growth if they can't open their next factory.

But then SP = f(PE) + f(growth) + f (hype), and it appears hype is still substantial. Just a bit dangerous to rely on it, hype tends at some stage to fade when reason eventually sets in ;);

There is a lot of sustainable growth coming in, just not massive growth that Pokeno would have brought.

-$125m liquid milk dairy packaging facility at Dunsandel

-Acquisition of Talbot Forest Cheese $30 -$40m.

-$19m expansion to its Dunsandel lactoferrin facility doubles its lactoferrin manufacturing capacity.

BlackPeter

16-05-2019, 09:12 AM

There is a lot of sustainable growth coming in, just not massive growth that Pokeno would have brought.

-$125m liquid milk dairy packaging facility at Dunsandel

-Acquisition of Talbot Forest Cheese $30 -$40m.

-$19m expansion to its Dunsandel lactoferrin facility doubles its lactoferrin manufacturing capacity.

Well yes, but look at all this growth:

Liquid mild: Not much margin in that, particularly given they sell it as one of the supermarket house brands. Added revenue - sure, but earnings growth? Hardly;

Talbot cheese: Not particularly profitable either - and anyway (looking at the revenue) just peanuts ...

Lactoferrin: Yes, sometimes highly profitable - and sometimes not. World market price of lactoferrin looks similar to a rollercoaster over time: huge ups and downs, not really something you want to rely on for sustainable growth. And lets face it - while lactoferrin is an for mammals essential protein and a component of the immune system, I don't think that there is any evidence that eating (or drinking) additional lactoferrin removed from the milk it was in is really beneficial. Price is driven by hype, not by need ... but than, sometimes hype rules the world.

winner69

16-05-2019, 09:28 AM

Lucky it didn't lose a cent for every post from the non-holders today! I guess the market is a bit more ambivalent about the situation and the risks, might have seen a bargain in the overreaction from yesterday.

Well yes, but look at all this growth:

Liquid mild: Not much margin in that, particularly given they sell it as one of the supermarket house brands. Added revenue - sure, but earnings growth? Hardly;

Talbot cheese: Not particularly profitable either - and anyway (looking at the revenue) just peanuts ...

Lactoferrin: Yes, sometimes highly profitable - and sometimes not. World market price of lactoferrin looks similar to a rollercoaster over time: huge ups and downs, not really something you want to rely on for sustainable growth. And lets face it - while lactoferrin is an for mammals essential protein and a component of the immune system, I don't think that there is any evidence that eating (or drinking) additional lactoferrin removed from the milk it was in is really beneficial. Price is driven by hype, not by need ... but than, sometimes hype rules the world.

OK - I obviously realise that some people here are desperate to spread fear and generally love to emphasize anything which could be interpreted as bad news. I hope you have fun ...

silverblizzard888

16-05-2019, 09:38 AM

Well yes, but look at all this growth:

Liquid mild: Not much margin in that, particularly given they sell it as one of the supermarket house brands. Added revenue - sure, but earnings growth? Hardly;

Talbot cheese: Not particularly profitable either - and anyway (looking at the revenue) just peanuts ...

Lactoferrin: Yes, sometimes highly profitable - and sometimes not. World market price of lactoferrin looks similar to a rollercoaster over time: huge ups and downs, not really something you want to rely on for sustainable growth. And lets face it - while lactoferrin is an for mammals essential protein and a component of the immune system, I don't think that there is any evidence that eating (or drinking) additional lactoferrin removed from the milk it was in is really beneficial. Price is driven by hype, not by need ... but than, sometimes hype rules the world.

Well I hope this isn't skepticism for the sake of skepticism, but every path of growth starts with small margins and builds over the long term with more sustainable profits.

Liquid milk for supermarket brands is just the start, Synlait has stated that they will look for more unique products going forward and has considered more long life liquids and cultured ones too, but they have to build out scale first.

Talbot is a small acquisition, but once acquired they will have the brand and know how to expand out into the cheese market, especially if they have the funding to do so.

All industries will have ups and downs in pricing, but like the above two products, by adding more diversification of products in a sense it lowers the risk going forward and mixes in different products with different margins to create a sustainable growth path not reliant on one sole product or customer as they do now.

pg0220

16-05-2019, 09:42 AM

OK - I obviously realise that some people here are desperate to spread fear and generally love to emphasize anything which could be interpreted as bad news. I hope you have fun ...
I think they just enjoy convincing that they have been right avoiding SML ;)
I also think the Pokeno thing is quite serious, given huge reduction in margin from their major customer ATM and chunk of future profitability from Pokeno site has already been priced in SP. PE of 25 for a manufacturing company sounds not inexpensive for sure.........

mondograss

16-05-2019, 09:42 AM

FWIW I got out yesterday with a healthy enough profit. I was happy to hold it, but this Pokeno mess (in particular the lack of disclosure) is something I find quite disturbing and has really damaged my confidence in the company. I'd rather put my money elsewhere until the current management team demonstrates a better ability to execute.

sb9

16-05-2019, 10:05 AM

Its more the fact that Synlait still produces a great profit and continues to grow its revenue and some development in Dunsandel is being carried out. In a way investors haven't really included much of Pokeno into their valuation. Investors still more focused on the profits that are generated at the current sites and going forward if its likely to stay similar, and with a PE of 25 its not exactly expensive.

There is a lot of sustainable growth coming in, just not massive growth that Pokeno would have brought.

-$125m liquid milk dairy packaging facility at Dunsandel

-Acquisition of Talbot Forest Cheese $30 -$40m.

-$19m expansion to its Dunsandel lactoferrin facility doubles its lactoferrin manufacturing capacity.

Well I hope this isn't skepticism for the sake of skepticism, but every path of growth starts with small margins and builds over the long term with more sustainable profits.

Liquid milk for supermarket brands is just the start, Synlait has stated that they will look for more unique products going forward and has considered more long life liquids and cultured ones too, but they have to build out scale first.

Talbot is a small acquisition, but once acquired they will have the brand and know how to expand out into the cheese market, especially if they have the funding to do so.

All industries will have ups and downs in pricing, but like the above two products, by adding more diversification of products in a sense it lowers the risk going forward and mixes in different products with different margins to create a sustainable growth path not reliant on one sole product or customer as they do now.

Well done sb888, fully supportive of your views.

silverblizzard888

16-05-2019, 10:37 AM

Well done sb888, fully supportive of your views.

Thank you, glad there is someone else who sees it my way.
With all the positive views I have about the companys outlook, I still don't think theres much forgiveness for what they have done at Pokeno though, leaving shareholders ill-informed from the start, lack of due diligence in action they took and how messy that situation is.

In the sense of an analogy, its like a fruit basket, we have one rotten fruit in the basket of fruits, but that doesn't mean the whole basket of fruits is bad, but theres definitely a mess to clean up and for shareholders receiving the basket they are horrified by it.

sb9

16-05-2019, 10:47 AM

Thank you, glad there is someone else who sees it my way.
With all the positive views I have about the companys outlook, I still don't think theres much forgiveness for what they have done at Pokeno though, leaving shareholders ill-informed from the start, lack of due diligence in action they took and how messy that situation is.

In the sense of an analogy, its like a fruit basket, we have one rotten fruit in the basket of fruits, but that doesn't mean the whole basket of fruits is bad, but theres definitely a mess to clean up and for shareholders receiving the basket they are horrified by it.

In no way, I'm supportive of management's actions re Pokeno disaster. I did mention from their conf call following their FY results that current management need to pick up their act and they can probably take leaf out of A2's management team.

They (synlait management) need to be more professional, upfront and set their priorities aligned to shareholders interests. Don't think they are doing a great job of that currently. The current fiasco (if you want to call it that way) with Pokeno, am sure will be sorted out one way or other. In the meantime its going cost them more time and money.

Hope they learn lessons from this experience and no repetition of such events in future.

minimoke

16-05-2019, 11:25 AM

..........

Chanchay

16-05-2019, 02:05 PM

minimoke

16-05-2019, 02:39 PM

..........

BlackPeter

16-05-2019, 02:40 PM

More trouble for Synlait. And again, more subpar communication.

Munchkin fda approval for USA put on hold.

https://www.nzx.com/announcements/334649

Related to pokeno? Loss of production capability? Who knows.

Quite considerate that they seem now to print the headlines of any bad news in bold pink. Makes them stand out of the crowd.

minimoke

16-05-2019, 03:34 PM

..........

SilverBack

16-05-2019, 09:26 PM

Just a reminder from 2017
"He said the new timing will not have a material impact on Synlait's forecast volumes for the 2018 financial year. The company has previously said that significant manufactured volumes for the US market weren't expected until the 2018 financial year.
Synlait is expanding in the US, the world's second-largest infant formula market, to diversify its earnings away from China, the world's largest market. The company has worked for two years with Munchkin on the new 'grass-fed' formula which aims to meet demand for natural products in a market where much of the milk comes from intensive, factory-style dairy farms. The product is poised to become only the second imported infant formula brand with US FDA registration.
The company said today that the delay in the US launch has no impact on the strength of Munchkin's Grass Fed infant formula, which continues to steadily gain increased distribution in Australia and New Zealand."

Probably best to alert the market now and not do a PEB

Sorry minimoke, but what do you mean by a PEB?

minimoke

16-05-2019, 09:31 PM

..........

SilverBack

16-05-2019, 09:42 PM

Promising year after year that American certification is just around thecorner, sucking up shareholder funds in the meantime, paying extravagant executive wages and never ever getting close (PEB = Pacific Edge Biotech)

Ah yes, hope springs ever eternal in the hearts of both managers and investors. Only experience with lessons hard learned counteracts this (as you obviously have).

Beagle

17-05-2019, 11:32 AM

Promising year after year that American certification is just around thecorner, sucking up shareholder funds in the meantime, paying extravagant executive wages and never ever getting close (PEB = Pacific Edge Biotech)

Who's getting milked, the cows or shareholders ?
The optics of putting this certification process on hold look quite troubling. No progress on other certification processes in China either. Looking more like a fiasco almost every other day. Very pleased to be out.

minimoke

17-05-2019, 11:58 AM

..........

peat

17-05-2019, 01:45 PM

yes , I completed my full exit from this somewhat misleading company a couple of days ago. small loss , no worries.

I believe that is now a hat trick of misinformation events so yeh agree - this ones gone from the portfolio and now relegated to the merely 'Curious' watchlist

winner69

20-05-2019, 08:11 AM

Leon on radio this morning

Doesn’t seem too fazed about Munchin not proceeding in the USA

https://www.rnz.co.nz/audio/player?audio_id=2018695776

minimoke

20-05-2019, 08:54 AM

..........

winner69

21-05-2019, 08:38 AM

I take it a cease and desist notice means they have to stop building ..doesn’t actually say what they have to stop doing

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/334778/300164.pdf

minimoke

21-05-2019, 09:15 AM

..........

minimoke

21-05-2019, 09:39 AM

..........

Beagle

21-05-2019, 09:51 AM

I give them until Thursday - On Friday an injunction will be filed in court. Given theres a Court of Appeal decision I dont see an injunction as a difficult thing to achieve so a relatively quick decision. There about a week and a half of building time left on the clock

I agree that it is highly likely that an injunction will be sought and granted...unless of course the cease and desist letter was crafted to force Synliat to get around the table and talk about a meaningful settlement. Potentially very disruptive for Synlait and I for one don't think its been priced into the shares yet.

minimoke

21-05-2019, 10:00 AM

...........

Beagle

21-05-2019, 10:27 AM

You dont get to an Appeal Court decision without lots of talking already done. Synlait obviously not meeting expectations - and loosing. Time for talk has now gone. (might have been nice for them to have let the market know theres talks were happening as they occurred). I think a "practical solution" just means a whole lot of extra dollars being thrown in - but how many?

Fair comment. Safe to say its not a six figure sum that's for sure !

RTM

21-05-2019, 10:53 AM

Fair comment. Safe to say its not a six figure sum that's for sure !

So what is the sum...?
$5,000,000 is 2.8c per share. Doesn't seem a lot ?
Is that the right way to think about it ?

The whole thing smacks of a fair bit of arrogance IMO.

BlackPeter

21-05-2019, 11:17 AM

So what is the sum...?
$5,000,000 is 2.8c per share. Doesn't seem a lot ?
Is that the right way to think about it ?

The whole thing smacks of a fair bit of arrogance IMO.

I think the right question would be - how much does it cost Synlait to remove their newly build factory and rebuild it somewhere else instead. Add to that the lost opportunity cost for not having this capacity for the next 4 or 5 years.

Cost pretty easy to add up to lots of $100 million chunks. Question is - how much does the beneficiary of the covenants want from this cake? All they need to do is ask ...

Obviously - we don't know where they will end up, but at face value it looks like Synlait put itself into a very weak position to negotiate. I find it hard to understand that a management team I once used to respect put themselves into such a position. Is this arrogance? How dumb can one be?

RTM

21-05-2019, 12:18 PM

I think the right question would be - how much does it cost Synlait to remove their newly build factory and rebuild it somewhere else instead. Add to that the lost opportunity cost for not having this capacity for the next 4 or 5 years.

Cost pretty easy to add up to lots of $100 million chunks. Question is - how much does the beneficiary of the covenants want from this cake? All they need to do is ask ...

Obviously - we don't know where they will end up, but at face value it looks like Synlait put itself into a very weak position to negotiate. I find it hard to understand that a management team I once used to respect put themselves into such a position. Is this arrogance? How dumb can one be?

OK...so lets say it costs them $100,000,000.00 to buy there way out. That would come to 56cents a share.
Price has dropped from say ~10.50 to 9.86.....imaybe that's about right and it will cost the shareholders 100mil. Phew.
Seems a lot of money.

Leftfield

21-05-2019, 12:34 PM

SML's management not performing IMHO.

1.) reduced margins (tough negotiating by ATM)
2.) non achievement of China and USA approvals
3.) Pokeno legal farce

Holders should be very concerned.

whatsup

21-05-2019, 12:58 PM

Still weakening, Mr Market does NOT like uncertainty !

Beagle

21-05-2019, 01:05 PM

SML's management not performing IMHO.

1.) reduced margins (tough negotiating by ATM)
2.) non achievement of China and USA approvals
3.) Pokeno legal farce

Holders should be very concerned.

Also they have put a lot of effort into inclusiveness, making sure the colour of their presentations ensures the organisation is known to be outstanding in this area and making efforts at shareholders cost to ensure CO2 emissions are reduced.

The new CEO has really been making his mark on the company for (what I would suggest) is all the wrong reasons.

whatsup

21-05-2019, 01:53 PM

Raz

21-05-2019, 02:59 PM

pg0220

21-05-2019, 04:01 PM

Also they have put a lot of effort into inclusiveness, making sure the colour of their presentations ensures the organisation is known to be outstanding in this area and making efforts at shareholders cost to ensure CO2 emissions are reduced.

The new CEO has really been making his mark on the company for (what I would suggest) is all the wrong reasons.
LOL, I wanted to say that this could go as disruptive as colour of title in their announcement letter.

pg0220

21-05-2019, 04:04 PM

From a text book situation this is fascinating situation that SML finds its self in, unheard of to my mind in recent N Z commercial history, this could go either way ( very bad ) or ( terrible ) for them, any judge has to pass judgement on the facts of this matter not the circumstances of it.

I cannot see a easy way out for either party as there will be appeals galore what ever the judgement, point to consider what is the rub off to ATM if SML has to remove the plant, ( heaven forbid ) I know that wont happen but one never knows .
I wouldn't think they will put themselves into a position they can't meet ATM's demands, it was my understanding that their contract is to be able to meet all the demands from ATM for IF production.... If something goes wrong with the relationship with ATM, SML would be in even much worse situation then this Pokeno dispute...

silverblizzard888

21-05-2019, 04:35 PM

LOL, I wanted to say that this could go as disruptive as colour of title in their announcement letter.

Well you see colour font goes on all statements, memos and branding, thus affecting the whole company. A $250 million factory only affects part of the business. Weighing between where to spend time between the whole company or part of it, of course the CEO had to make a decision and spending more time carefully choosing the right colour is what was required. The problem with the convenants were they weren't pink! Don't worry I'm sure they have got a very astute team changing it on Microsoft Word as we speak.

If we look into the colour pink (have to say the definitions not wrong lol):

"Pink is the official color for little girls and represents sugar and spice and everything nice. Pink is the sweet side of the color red..... large amounts of the color pink can actually create physical weakness."
https://www.bourncreative.com/meaning-of-the-color-pink/

Beagle

21-05-2019, 04:39 PM

Well you see colour font goes on all statements, memos and branding, thus affecting the whole company. A $250 million factory only affects part of the business. Weighing between where to spend time between the whole company or part of it, of course the CEO had to make a decision and spending more time carefully choosing the right colour is what was required. The problem with the convenants were they weren't pink! Don't worry I'm sure they have got a very astute team changing it on Microsoft Word as we speak.

:lol: :lol: Got to get your priorities right eh...what a fiasco...

winner69

21-05-2019, 04:47 PM

Didnt the Board and Management get a rousing round of applause at the last AGM

And Leon said
“Pink is the colour of disruption and difference. Our new wordmark is friendly and more appropriate for a company working with flowing milk. We think together they work really well to tell the world who we are.”

Ggcc

21-05-2019, 04:57 PM

A little saddened but glad that I hopped out when I did at $10.85

BDL

21-05-2019, 05:34 PM

Strange, no volume selling though......

winner69

22-05-2019, 11:21 AM

They reckon Fonterra might increase farm gate prices ...even suggesting a $7.00 forecast for 2020

Synlait latest forecast was $6,25

If they go to $7.00 as well any impact on profit?

minimoke

22-05-2019, 11:26 AM

..........Deleted by Minimoke in response to STMOD censorship of posts

mondograss

22-05-2019, 03:15 PM

minimoke

22-05-2019, 03:34 PM

..........

Beagle

22-05-2019, 03:34 PM

Unbelievably, this actually gets worse:
https://www.stuff.co.nz/business/112917558/industry-rival-asks-synlait-to-stop-building-pokeno-factory

Didn't realise they're fighting with someone who's a director of a competing company.

Wow, its the story that just keeps on giving, (for those that take an interest in pending train wrecks).

pg0220

22-05-2019, 03:58 PM

It is one hell of a tangled web: https://www.silvereye.co.nz/stuff-massive-agri-tourism-development-plans-to-bring-kiwi-farm-ferry-rides-accommodation-to-north-waikato/.

Being an expert in pink fonts is not going to be enough to figure this lot out.

Wow.... Path to negotiation is going to be even more difficult..... it sounds like a beneficiary of the covenant did not object the Synlait's construction for "I want that land simply for nothing"......

minimoke

22-05-2019, 04:00 PM

..........

minimoke

22-05-2019, 04:29 PM

..........

Beagle

22-05-2019, 05:37 PM

whatsup

22-05-2019, 05:41 PM

https://www.stuff.co.nz/business/112917558/industry-rival-asks-synlait-to-stop-building-pokeno-factory

Profits to be hit if the factory isn't built on time. Just show me where to sign to short these doggy shares...

I cannot understand why S Hers are not running for cover especially since this is also listed in Aust, home of the massive shorters !@!

Beagle

22-05-2019, 05:59 PM

I cannot understand why S Fers are not running for cover especially since this is also listed in Aust, home of the massive shorters !@!

Maybe the beautiful pink font has lulled them into a trance thinking with such superb right up to the minute political correctness what could possibly go wrong :D

nzsharetrade

22-05-2019, 10:44 PM

someone needs to write a letter to Winston P for this matter. I dont blame that Chinese, it is our govt.

Yoda

22-05-2019, 10:54 PM

Down 15% since mid Mch , going lower ,i think .not many buyers . 10555

pg0220

23-05-2019, 12:01 PM

Had to get out in the 9's today. The first stock I've sold at a loss since a little company called Enron back in the 90's.
Wow so second share that you sold at a loss? You must be pretty good eh.......

whatsup

24-05-2019, 12:54 PM

Are we headed for sub $9.00 certainly looks like it atm.

minimoke

24-05-2019, 01:06 PM

..........

Ggcc

24-05-2019, 01:07 PM

Are we headed for sub $9.00 certainly looks like it atm.
Although I think it should happen..... today is one of those days that excluding Skycity, there are low number of transactions and it seems like panic selling. I would not read too much into todays trading.

minimoke

24-05-2019, 01:10 PM

..........

Beagle

24-05-2019, 01:28 PM

Horrid red down arrow day for me today - except also for PLX which I happily hold. Still happy not holding SML - though a re-entry might be on the cards.

Even if it got down to $8 I would not be tempted for all the reasons outlined in my previous posts. Bad management will very easily wreck what could otherwise be a good company. I think they have massive problems with Pokeno and the consequential contractual risk regarding supply arrangements both input and output could be quite significant. Then there's the new PC culture of the company...

winner69

24-05-2019, 03:48 PM

Senior management a mix of old timers and several who have joined the Team in last year or so. (BP said experienced and successful)

CEO — whatever way you look at it it would appear what he’s been in charge off have not been a roaring success. I have a theory that some leaders (CEOs) are not lucky or have good fortune favour them in their careers even though they may not be fantastic managers and as such the companies they lead generally tend to disappoint. (Works the other way as well as some CEOs always seem lucky)

How ‘lucky’ the newish headhunted CEO is will determine Synlaits fortunes.

From a few months ago

Obviously Leon is not one of the ‘lucky’ ones

winner69

24-05-2019, 04:02 PM

Bookvalue $2.62 ....maybe $4.00 at best is fair price for a capital intensive low margin producer (of a commodity product). Discounted Cash Flow with outrageous growth assumptions gives me about $6.50

The IP (registrations) are seen as valuable but latest announcement even puts that theory in doubt.

This from February ....essentially repeating earlier thoughts.

Maybe my FA of this might come to fruition

Rubbished at the time because Synlait was a great company I was told ......maybe just as good as A2. Justified the outrageous PE because growth was a given.

Percy reminds me at times to do your own research and have faith in it.

Has been a great trading stock though.

Beagle

24-05-2019, 04:22 PM

This from February ....essentially repeating earlier thoughts.

Maybe my FA of this might come to fruition

Rubbished at the time because Synlait was a great company I was told ......maybe just as good as A2. Justified the outrageous PE because growth was a given.

Percy reminds me at times to do your own research and have faith in it.

Has been a great trading stock though.

In the defence of those who were formerly bullish, (myself included), shareholders have been victims of a significant amount of material information which was deliberately concealed by the company, probably under the auspices of it being commercially sensitive. Now some of the skeletons are laid bare for all to examine I think its perfectly reasonable that people feel they're entitled to take a considerably different view. Not beyond the bounds of possibility you might get your $6.50 mate and I might reconsider my position again if we get to that price point depending upon how inept management are between now and then and how many more skeletons are yet to come out of the closet and the extent of actual and consequential damages.

dreamcatcher

24-05-2019, 05:30 PM

BlackPeter

25-05-2019, 08:25 AM

Today GS they see the strong shipment data leaving Lyttelton as overall trend supportive of atm & sml -key-risks:weaker volume -project execution- negative regulatory risk............... BUY-rated TP NZ$11.60 and NZ$16.50

While I am disappointed believe common sense will prevail so have no intentions of selling ANY

I think that we established before that there is no way to deduct ATM and SML's share of the Lyttelton shipping data. There are other players in the same sandpit and the data don't say whether this is SML A2 IF or SML A1 IF or Fonterra IF they are shipping.

And obviously - you would not see any impact of the Pokeno cockup on the Lyttelton shipping data.

So - maybe you should be careful what you are wishing for if you hope that common sense prevails AND the SP stays up ;);

Leftfield

25-05-2019, 08:41 AM

I think that we established before that there is no way to deduct ATM and SML's share of the Lyttelton shipping data. ;

Not sure about the 'we'. You established you didn't like the data. Others of us, less fussed by the exactitude you seem to need, see a good indicator in the export stats.

Example; last figs showed a 55% ish vol increase ex Lyttleton (from memory) and we are already learning that A2's China sales are up some 60% and it now has 8% market share. So I'm happy with the indicator, even if you are not.

Who say's Share investing is a science? More of an art IMHO..... but then that's another debate!!

10556

Have a good weekend all. DYOR as usual.

winner69

25-05-2019, 08:49 AM

BlackPeter

I think that we established before that there is no way to deduct ATM and SML's share of the Lyttelton shipping data.

I think you came to that conclusion

My conclusion (and leftie seems to be on the same page) is there’s a high correlation between that shipping data and A2 sales (six monthly growth)

And of course A2 sales is a key driver of A2 overall performance and over time the share price ...but then again I suppose you already know that.

dreamcatcher

25-05-2019, 12:49 PM

Interesting reading on HC forum SM1 ..........its all about the moolah probably paid imo by Stonehill and lawyers

From a HC poster: "Compensation [2] The parties, at least prima facie, disagree on applicable principle. [3] New Zealand Industrial Park Limited (NZIPL) argues for a willing buyer/willing seller test. It relies on MacRae v Walshe, 2 which supports that proposition. In fixing reasonable compensation, the Court must consider the prospective benefits and losses both to the grantor and grantee.3 NZIPL focuses on the benefit to Stonehill Trustee Limited (Stonehill). It asks for compensation in the amount of the difference between the price paid by Stonehill for the land and the price paid by Synlait.

from the 20/12/2018 - shows what the plaintiff is seeking - all of the profit that the vendor made it seems to me."

minimoke

25-05-2019, 01:21 PM

..........

Sideshow Bob

28-05-2019, 10:44 AM

Increasing Forecast payout

https://www.nzx.com/announcements/335133

minimoke

28-05-2019, 11:15 AM

..........

minimoke

28-05-2019, 03:37 PM

...........

Ggcc

28-05-2019, 04:03 PM

No surprise here "The adjacent landowner to the $280 million Synlait factory at Pokeno is threatening an injunction to stop further construction."

""New Zealand Industrial Park is now working through the successful Court of Appeal judgment with its legal team and an injunction is being considered as an option to ensure the implementation of the three Appeal Court judges' decision."

https://www.stuff.co.nz/business/farming/113056781/synlaits-pokeno-neighbour-weighing-up-injunction-to-stop-factory-construction.

Lets see how much nice pink ink is used to inform the market of this.
All I can say I am glad I got out when I did. Pure luck more than anything else.

Messy things generally always work out, but at a cost. Now I wonder who it will cost and at what price

Beagle

28-05-2019, 04:20 PM

nzsharetrade

28-05-2019, 07:16 PM

Why stuff word in the way that sounds like this is a war between Chinese? we are talking about 200 jobs.

"Since the Court of Appeal's judgment on May 9 in Ye's favour, he has sent a "cease and desist" request to Synlait, but the 39 per cent Chinese-owned company has continued with construction."

minimoke

28-05-2019, 09:51 PM

...........

BlackPeter

29-05-2019, 08:37 AM

""New Zealand Industrial Park is now working through the successful Court of Appeal judgment with its legal team and an injunction is being considered as an option to ensure the implementation of the three Appeal Court judges' decision." suggests Ye is pretty intent on having neighbors that comply with the covenats and he has the support of the Appeal Court. A practical cash solution may not be what he wants. I hope Clements understands the Chinese play the long game. GPG have the backing of some big boys

You might be right. Just wondering though what his agenda really is? Having an industrial ruin in the neighbourhood might not be his preferred outcome either ...

Maybe they think they can use the already erected building for their own purposes and plan to buy it for a song from Synlait after making it impossible for them to use it. Easy for them afterwards to remove the covenants (after owning it). But maybe I am reading just too many conspiracy theories ...

Beagle

29-05-2019, 08:42 AM

I don't rate Clements at all. Sales and marketing background ex Fonterror and all obsessed with being inclusive and right up to the minute super politically correct and carbon efficient as though those things are the all pervasive major goals of the business. In my opinion he's clearly out of his league now and I expect an injunction to be sought very shortly. Worse, I no longer trust the board or senior management after a number of serious instances of concealment of highly relevant shareholder information. In my view the best hope for shareholders is a takeover by ATM at some stage but I wouldn't be holding my breath on that front becuiase its now clear ATM are using their muscle such that the returns from owning the processing facilities are moderate at best.

hamish

29-05-2019, 11:25 AM

FWIW.

The Synlait CFO spoke at the Craig's investor day a couple of days back, he was followed straight after by CEO of Mainfreight. It could not have been more chalk and cheese. Synlait came across as angry, pushy, impatient and almost victim-like. Lot's of fancy slides, no soul. For me, was the worst presentation of the day. Gave arrogance.

Mainfreight came across as humble, people first, actually building empowerment (not just words about intent), and getting on with building a great business in a clear, calm fashion. He spoke from a stool, with just a couple of slides of their people and some of their new sites and building their network further. Gave confidence.

The Pokeno litigation was touched on, it came across (implied) that they would attempt to buy their way out of the hole and were confident they could do so.. I'm not so sure.

Disc: After hearing first hand, I sold all my Synlait and bought more Mainfreight. Glad I did.

RTM

29-05-2019, 11:36 AM

minimoke

29-05-2019, 11:43 AM

...........

pg0220

29-05-2019, 11:53 AM

How hard is it to take the case from court of appeal to supreme court? If cash buyout is unsuccessful and injunction is applied by NZIP, then the only choices for SML is to either take it up to the higher court or give up the factory. If they take it up to the supreme court, it would be a very interesting case and eventually end up the dispute...

minimoke

29-05-2019, 12:17 PM

..........

Beagle

29-05-2019, 12:22 PM

$300 million.

Baa_Baa

29-05-2019, 12:22 PM

Commissioning of plant at Pokeno due on 1 June.

Are you certain about that, or just eager? Quoted in Stuff Feb article “Chief executive Leon Clement said they hope to start test running the dryer in August-September in time for the 2019-20 dairy season.”

minimoke

29-05-2019, 12:34 PM

...........

THEONE

29-05-2019, 12:53 PM

I need to do some more research, but it seems extremely like that
New Zealand Industrial knew a Dairy Factory was being built next door.

I would love to know the time line..

Surely the New Zealand Industrial site would be worth allot more with the covenant removed.
They can't develop their land either.

Give an offer that expires in 24 hours of a few million ...If offer is rejected moth ball it.

Find another site. Speed is everything..This could take years to resolve..

Ultimately it makes their site more valuable...

If offer is rejected now, then maybe a few months later they maybe more interested to remove covenants.
Especially if they announced they had bought a new site...

Baa_Baa

29-05-2019, 12:58 PM

minimoke

29-05-2019, 01:08 PM

...........

THEONE

29-05-2019, 01:12 PM

Thanks MiniMoke..Looks highly likely they would have known...Being in the same industry etc..

minimoke

29-05-2019, 01:16 PM

..........

Beagle

29-05-2019, 01:19 PM

I think we all thought they'd dodged a bullet with the Ebert collapse. Out of the frying pan and into the fire.

G on

29-05-2019, 01:33 PM

$300 million.
I agree. I would think the maximum would be the cost of relocating the factory plus delays to production. SML might not pay all if Stonehill is pursued but there would surely be costs for SML to absorb.
I sold enough to get my initial capital out but leaving the rest just to see.

Leftfield

29-05-2019, 01:36 PM

Crikey what a mess!

Remember the days when Beagle ran a Poll on this site asking which of SML or ATM was the better long term investment? The responses are likely to be quite different these days.

nzsharetrade

29-05-2019, 02:42 PM

Someone got an eye on SML for sure but not sure it is Chinese or American. Chinese market need fresh/pure/not contaminated milk rather than an expensive marketing company. Huawei is doing well mainly because of their business partner support (Huawei really look after them not just playing game). ATM is not on the same level with Huawei in term of looking after business partner, just wait for the surprise.

Beagle

29-05-2019, 04:15 PM

Because I believe everything Stuff writes "Synlait chief executive Leon Clement said the letter was a request and not an order, so work was continuing on the plant, which is due for commissioning for the 2019-20 dairy season, which starts on June 1."

More half truths, mixed messages, lies and ambiguity. Beheading or crucifixion?

Yeah, I couldn't agree more, what a joke. Makes you wonder if he even understands the nature of a cease and desist letter ? Totally out of his depth...
The immediate questions are when an injunction will be sought, not if, and what are Synlait going to do about that when the injunction is almost certainly granted ?
If Clements thinks he's going to buy his way out of this problem cheaply he's living in fantasy land.

minimoke

29-05-2019, 04:29 PM

..........

Beagle

29-05-2019, 04:42 PM

I think we will find that Clement is misleading the market by telling an outright damned lie.

In the Appeal Court judgement a fact is recorded as "NZIPL’s solicitors wrote to STL’s solicitors on 19 June 2018 demanding that STL require that all works in breach of the covenants cease"

Given they "demanded" a stop work of all works, I dont see why they would craft a less demanding letter to SML/STL after the Appeal Court judgement came out.

Beggars belief what he said in that context doesn't it. Perhaps he naively thinks because its not a court order then a cease and desist letter is a request. Completely pathetic at best, deliberate misinformation and an outright lie at worst. He's built quite "the reputation" since being appointed hasn't he !
He needs to "go" in my opinion.

minimoke

29-05-2019, 04:57 PM

..........

nzsharetrade

29-05-2019, 04:57 PM

"Bright Dairy received a letter from the Shanghai Stock Exchange on May 10 asking it to respond by May 18th, covering the main business and financial situation. It is worth noting that the company's borrowing in the past two years has continued to climb in the case of holding large amounts of money.

Bright Dairy said in response to the letter of inquiry from the Shanghai Stock Exchange that the reason for the increase in corporate borrowing in 2018 was mainly due to the overseas subsidiary New Zealand Synlait Milk Ltd borrowed 356 million NZD , equivalent to RMB 1.628 billion. Synlait is mainly engaged in the production of industrial milk powder and the processing of infant formula.
"

nzsharetrade

29-05-2019, 05:05 PM

Also worth pointing out, I think, is that in June 2018 SML had an opportunity to cease work pending a decision. If that decision went against them then their only risk was returning the land to the covenented state. Tuning a bit of tuned earth back into paddock would not have been hard or expensive.

Sure they won Round One but their legal advisers would have said that win is subject to appeal. SML continuing knowing the risk.

I think any new court will totally disregard the inconvenient issue of a new factory sitting on covenented land

Was the appeal from the same high court? when you say 'new court' , do yo mean supreme court?

minimoke

29-05-2019, 05:09 PM

..........

nzsharetrade

29-05-2019, 07:00 PM

I see 2 potential processes
1) STL appeal Appeal Court decision to Supreme Court

2) NZIPL lodge request for injunction from High court (which may be appealed to higher court) to cease all works while also seeking enforcement of covenant (not sure which court that is but cant be a high one given the covenant decision is made) or in the alternative damages

Edit: Original High Court decision was appealed in the Appeal Court

Thanks minimoke.

THEONE

29-05-2019, 08:39 PM

I am a bit confused with the time line...

29 June 2018 NZIPL writes to STL demanding end to earthworks

However in the court case NZIPL didn't settled on property till October 2018?

Interestingly ownership of NZIPL was changed on 10 July 2018, previously owned by INFINITY PACIFIC HOLDINGS PTY LTD
Would be interesting to know more about why ownership changed...and who the previous owner ultimately was..

It looks like INFINITY PACIFIC HOLDINGS PTY LTD is the controlling shareholder in GMP...(could be wrong)

minimoke

29-05-2019, 09:51 PM

..........

nzsharetrade

29-05-2019, 10:18 PM

for fun

https://www.glassdoor.co.nz/Reviews/GMP-Pharmaceuticals-Group-Reviews-E1397024.htm

dreamcatcher

30-05-2019, 01:56 AM

for fun

https://www.glassdoor.co.nz/Reviews/GMP-Pharmaceuticals-Group-Reviews-E1397024.htm

Any employer that expects staff to work overtime for free as part of their job or fires employee's for no reason should be reported.

This is NZ and NZ's law applies here

pg0220

30-05-2019, 09:56 AM

Any employer that expects staff to work overtime for free as part of their job or fires employee's for no reason should be reported.

This is NZ and NZ's law applies here
Working for an asian boss, what do you expect. Firing people for no reason? They might have been ones trying to fight against the company culture. My missus used to work for a similar one as well. She was luckily on wages so she could get all payments for her OT but those on salaries couldn't ask for any OT payment. Fortunately, they finally got a big warning from IRD in the end though :)

nzsharetrade

30-05-2019, 10:17 AM

Heres the family tree as best as I can tell

Thanks for sharing.

Beagle

30-05-2019, 12:19 PM

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12235503

I don't subscribe but you get the idea from the first few lines that this is looking likely to be massively problematic for SML.
Worst case scenario is looking more and more likely almost by the day...

Baaarney

30-05-2019, 12:30 PM

Thanks for sharing, its quite a web of interests

THEONE

30-05-2019, 12:56 PM

minimoke

30-05-2019, 01:08 PM

..........

dreamcatcher

30-05-2019, 01:23 PM

Thanks again Minimoke..Stonehill and synlait obviously stuffed up big time..
I am curious what peoples opinion on NZIPL actions?

My thinking on what I have read. he must of known and is just being oportunistic..

Business is business, but seems like is just Manipulating situation for a big payout..
Legally correct but not cricket...I will not by any GMP Dairy products..

Very opportunistic certainly not cricket probably imo will end back in court which may find a solution on fair value compensation for his loss.
Then its who pays Synlait - Stonehill - Lawyers - Council issuing resource consent and building permit.

30yrs ago I seen a massive complete building moved in Wellington 300m down the road. Could be plan B ??

minimoke

30-05-2019, 01:27 PM

..........

dreamcatcher

30-05-2019, 01:43 PM

And it only cost $2.3m in 1993 dollars for a 120m move

Fascinating watching and wished I could have stayed longer but think it took 3 days? to complete move as very slow progress.

Beagle

30-05-2019, 02:09 PM

I will not buy any SML. Their management has proven they are incompetent in a high stakes game and very poor at keeping the market informed. Its about time they stopped thinking this guy is some local market gardener (with all due respect to producers of our yummy vegetables) they can just steamroll. Good luck to him I say Minmoke

SML Gross Incompetence and Gross Recklessness both in terms of the way they're conducting themselves at Pokeno and in communication with shareholders.
I agree, with the current board and CEO...unless the shares are belted deep down into a very dark hole where they belong, this company is uninvest-able for anyone who understands commercial risk.

Slam dunk

30-05-2019, 03:25 PM

Does anyone have a view on how this (if at all) affects ATM? Sorry if covered previously.

minimoke

30-05-2019, 03:48 PM

..........

BlackPeter

30-05-2019, 03:52 PM

Does anyone have a view on how this (if at all) affects ATM? Sorry if covered previously.

Well, for starters they do own SML shares and ways overpaid for them - i.e. there is already a capital loss which will grow. What might be however worse are any potential production delays due to SML not being able to use their new nearly finished factory. If SML has problems to produce enough A2 infant formula, than ATM obviously can't sell them - i.e. I would expect not just SML's growth but (to a lesser degree - they do have a more diverse portfolio) ATM's growth to stall.

Not sure about delivery commitments - if there are contracts than there might be penalties to pay, but I think this is a lesser risk.

Obviously - if SML can buy themselves out of this mess (which I don't know), than it will be just the respective capital loss ... SML (and ATM as one of the cornerstone shareholders) will suffer from.

minimoke

30-05-2019, 03:58 PM

..........

BlackPeter

30-05-2019, 04:20 PM

Does this math work out? Worse case, say a $300,000,000 SML payout to make problem go away.

ATM's 17% portion of this would be $51,000,000

Per 735,000,000 ATM shares thats $0.07 an ATM share

Probably requires a rational market, the other side willing to take the $300 million (i.e. your worst case scenario is actually worst case) and no further time delays ...

As well - there might be cost for SML to finance the $300m.

But yes, in general I think it could work that way if the starting assumption is correct ...

If it is not, than any delays would obviously make it worse for SML and ATM. Time is not their friend.

Beagle

30-05-2019, 04:49 PM

SML do not have $300m to throw at this problem, assuming it is that much and frankly what the amount is, is anyone's guess. Their balance sheet is already pretty stretched to fund the growth they were looking to deliver. ATM to come to the rescue with a loan to bail them out of the Doggy Doo ?

kiwi_crusader

30-05-2019, 07:19 PM

Three new pink milk tankers will be arriving at Pokeno tonight!

couta1

30-05-2019, 07:35 PM

Three new pink milk tankers will be arriving at Pokeno tonight! Along with three flying pinkys spreading helicopter money.

minimoke

30-05-2019, 09:10 PM

..........

Baa_Baa

30-05-2019, 09:22 PM

I think the outcome will be much more benign for SML than the stay-at-home non-holders with nothing better to do than dig up unsubstantiated conspiracy trails lead us to believe. They so far have fabricated in their own minds an elaborate story but haven't acknowledged who is the culpable party liable for recompense versus the injured party who has no liability and stands to gain from a positive decision in the courts.

For SML holders, this chatter is not helpful. So far the SP has not been overly concerned with those whose stories have little to do with common sense or due process, which must be a bit galling that their grandstand has so little actual audience, while they're more focused on bolstering their own egotistical reputations as opinionated stirrers (which is working well), moreover they have shrugged off that with repeated calls for axing the incumbents for incompetence!

How rude are these sideline commentators who have plenty of time up their sleeves but apparently no time or objectivity to consider how SML (and their partner ATM) might be playing this.

minimoke

30-05-2019, 09:28 PM

..........

Baa_Baa

30-05-2019, 09:46 PM

We have seen how SML are playing this. No news to the market of the court proceedings. no news of the original cease and desist "demand", current cease dressed up as a "request" all with an appeal court decision not going in their favour. Good luck with dressing that up in pink bows and ribbons

Typical response, you miss the point that SML and ATM might not feel obliged, nor should they be, to inform the market about how they're going to take on the plaintiff. There is no obligation on SML to disclose anything (especially daily or weekly) about this, like why would they inform the market on a strategy for a pending court case, you're drawing a long bow to suit your own ends.

They have told us the circumstances and you're dining out on it for your own ends, to try and buy a quality company at a lower SP, even concocting stories that might drive the SP lower, like you have some influence on that, yeah right. Apparently you just have too much time on your hands and love a sh1tfight, especially one that might get you a lower SP entry price.

Pity that you're a non-holder wanting a lower SP by stacking piles of conjecture on top of SML. Some might call that blatant down ramping, think about it. If you were objective, you wouldn't have said you'd buy SML lower than here and you might have used your tons of available time to suggest how you think SML and ATM might defend being the injured party versus making assertions that they are the culpable party, which they aren't.

OTY, I think you're full of it, self centered, downramping and doing a disservice to SML holders.

minimoke

30-05-2019, 10:03 PM

..........

nzsharetrade

30-05-2019, 10:18 PM

Guys, i would rather reading conspiracy than this. show your opinion/conspiracy.

I highly respect both of you.

Beagle

30-05-2019, 10:29 PM

dreamcatcher

30-05-2019, 11:51 PM

Should have gone to Spec Savers lol 10584

You shouldn't use SUM chart here.....

minimoke

31-05-2019, 06:43 AM

..........

bull....

31-05-2019, 07:51 AM

Below is the market announcement I did not receive as a shareholder of SML. Dont bother looking for it on their website - they dont publish these things there - only on the NZX platform (and this announcement isnt there either because, unlike the latest announcement, they didn't think it material so didnt let us shareholders know)

Synlait acknowledges receipt of Cease and Desist for Pokeno
19/6/2018, 14:30 am GENERAL
Stonehill Trustee Ltd, the vendors of land sold to Synlait (NZX: SML; ASX: SM1) have received a letter demanding that STL require that all works in breach of the covenants on the land SML has purchased cease and advised that the covenant beneficiaries, NZIPL would be opposing STL’s originating application.

In February 2018 Synlait announced the conditional purchase of 28 hectares of land in Pokeno to establish its second nutritional powder manufacturing site.

“Today STL received a cease and desist letter from the beneficiary of the covenant while the beneficiary considers its option,” says Synlait’s CEO, John Penno.

“We are taking advice and talking to all parties, and we believe a practical solution is attainable,” he says.

“We are taking advice and talking to all parties, and we believe a practical solution is attainable,” he says

means we will negoiate to pay you millions to remove your cease and desist order

RTM

31-05-2019, 08:46 AM

Nice chart, thanks. As an ex-holder I’m finding this fascinating in a macabre kind of way. Appreciate your updates/research MM. Looking at your chart, seems very likely that the price goes to less than $8.50.

nzsharetrade

31-05-2019, 09:39 AM

Here you go NZSHARETRADE. Howabout this for a conspiracy.

19 June 2018 STL get cease and desist demand. Look at SML's share trading volume shortly afterwards

We can take it that negotiations took place after that.

Then look at the share trading volumes that went through in September / October 2018.

Then look at the court records 29 and 31 October STL and NZIPL beginning their High Court hearing

There was no market news around that time.

I totally got you. Mr. Ye got much much bigger picture.

Beagle

31-05-2019, 09:44 AM

...On this basis I have a re-entry point of about $7.40 given SML will go below $9.00 tomorrow...

I don't have a reentry point and I am not sure why you do to be honest ?
Bad management will wreck a good company. Wrong priorities divert attention from critical issues.
Then there are fundamental issues of breeches of trust, lack of disclosure of material information and so on.
I wouldn't be surprised to see it down where you suggest but that doesn't make it a buy in my opinion.
My fascination with slow motion train wrecks, (although in this case it looks like a derailment is coming at high speed) is why I keep watching this.

minimoke

31-05-2019, 09:58 AM

..........

minimoke

31-05-2019, 11:26 AM

..........

dreamcatcher

31-05-2019, 11:46 AM

I bet you ignored this Baa-Baa. Getting too het up while giving me a drubbing. Sale just gone through at $8.86

Huge numbers 424 ............ end of month today

minimoke

31-05-2019, 11:50 AM

..........

Beagle

31-05-2019, 12:55 PM

Might be a bit of Lovers Remorse having sold out a wee while back. But still have my ATM to stay in the milky game.

Once a cheater, always a cheater !

Beagle

31-05-2019, 03:03 PM

Wait until Australia wakes up.

Edit 5,833 of the 13,130 shares traded so far have been at $9.00 or less

We should give ourselves a pat on the back mate...this $300m or so in losses we've been talking about is almost exactly what the market cap has fallen by since the true nature of the scale of this fiasco became readily apparent. (Down approx. $1.80 x 179m shares = $322m market cap reduction). We've been bang on the money. Add another $300m because management have proved they are grossly inept so another $1.80 to fall and fair value is probably about $7.00...but frankly unless there are management changes I wouldn't be interested even at that price.

minimoke

31-05-2019, 05:07 PM

..........

Beagle

04-06-2019, 11:40 AM

$8.51 now and heading south at a fast rate of knots. Noe more than $2 per share lower than when the seriousness of issues at Pokeno first came to light.
Just a reminder folks to keep in mind that this is a company with a huge load of debt as all their recent and planned expansion has been facilitated through bank debt...which is okay if everything goes to plan...but leaves the company very vulnerable if it doesn't. Keep that in mind before you get temped to dip your toes in the water and get an "apparent bargain"

Two key reasons why I will not invest at any price.
1. Management have proved they can not be trusted to disclose material information to shareholders in a timely manner. Multiple breeches of good faith and concealment.
2. Management have proved they are arrogant and proceeded with the development despite the risk of appeal. To my mind this amounts to "Gross Recklessness"

minimoke

04-06-2019, 11:43 AM

..........

winner69

04-06-2019, 11:58 AM

Book Value is $2.60 odd

So even at $8.50 heaps and heaps of solid growth and good stuff built into the current share price.

Priced as if one is looking through pink tinted glasses

bull....

04-06-2019, 12:00 PM

Book Value is $2.60 odd

So even at $8.50 heaps and heaps of solid growth and good stuff built into the current share price.

Priced as if one is looking through pink tinted glasses

its absurd the multiples given to a manufacturer , a2 premium built in is the only reason it is this price

Beagle

04-06-2019, 12:21 PM

Makes me wonder how the market will react when they next choose to update on Pokeno.

They're in a weak and very vulnerable position and its clear all previous attempts to negotiate a financial compensation have failed which would suggest the next update will be a mea cupla involving a very substantial figure or potentially worse a site relocation. Either way its going to be ugly... I reckon the first $2 decline was just because management have proved they're incompetent...then we get into the serious costs and then for good measure the consequential contractual consequences to suppliers and end users. Every indication this is going to be extremely ugly for shareholders and we've only seen part of that at this stage in my opinion.
I have thought for the last few weeks that this stock is a very good short (for those that are into that sort of thing).

minimoke

04-06-2019, 01:09 PM

..........

nzsharetrade

04-06-2019, 01:09 PM

"China to boost market share of domestic baby formula"

"The National Development and Reform Commission (http://www.globaltimes.cn/db/government/3.shtml) (NDRC), China's top economic planning agency, released an action plan that aims to improve the quality of domestically made baby formula and increase its market share to above 60 percent."

the local brand is about 40%, someone needs to go to make the room. I still believe SML is in better position than ATM

minimoke

04-06-2019, 01:14 PM

..........

minimoke

04-06-2019, 01:23 PM

..........

nzsharetrade

04-06-2019, 01:23 PM

To do that NDRC has to get the consumer on side. That means they need to trust local product - that is an enormous hurdle, based on past domestic milk powder production problems. A2 is not only a trusted brand, it also helps the little darlings tummy's and all good Chinese mums want happy baby tummnys.

Sure, I understand that until they made up something for A2 to carry. I guess my point is bright dairy products with SML supply will be considered as part of the "local brand". it looks like they are also trying to attract people to build factory in CN (no sure who would do that in next 10 years.) I just believe the best way to do business is sitting behind NOT at front line in China at moment.