SML - Synlait Milk Ltd

[McGinty]

There is more to life than your ****ing travel plans. Get a grip and think of others

Very Unnecessary

[minimoke]

Very Unnecessarycry me a river tonight that someone didn't get home due to jetstar

[peat]

Jetstar cancelled my flight for me after four hours of waiting. Never again

theres a proper thread for this comment

[Chanchay]

There is more to life than your ****ing travel plans. Get a grip and think of others

Christchurch is my home, I was trying to fly home to be with my family at this awful time. I was not travelling for fun and I was trying to express how hard it is to wait hours to be with loved ones at such an awful time and then have the prospect cancelled at the eleventh hour.

But of all days, perspective is important and I am glad that all my family made it home safe as so many peoples family didn't.

I get your comment though. I can see how it looked and also this thread is on sml. I will stick to share discussions, which all seem so unimportant now.

[kiwi_crusader]

With +12% lift in January of milk powder leaving lyttelton port, I’m hoping a big slice of cream pie is coming Sylait’s way on Wednesday.

[sb9]

http://www.sharechat.co.nz/article/820c7670/synlait-and-fonterra-to-report-diverging-earnings.html

[winner69]

http://www.sharechat.co.nz/article/820c7670/synlait-and-fonterra-to-report-diverging-earnings.html

Will the market be happy with earnings growth of 5%

Hope they dress the announcement up big time.

[BlackPeter]

Will the market be happy with earnings growth of 5%

Hope they dress the announcement up big time.

I don't. It would be good if the financials reduce the current hype (buy the rumour, sell the facts?). Might even buy back in ;);

Not sure, though I know where the 5% profit growth this article mentions are coming from. If that's it, than I would expect the markets reaction to be brutal.

Analyst consensus was last time I checked for 18% earnings growth.


Discl: hold still a small number of SML shares, but only to give me AGM access and to remind me to keep following them.

[winner69]

I don't. It would be good if the financials reduce the current hype (buy the rumour, sell the facts?). Might even buy back in ;);

Not sure, though I know where the 5% profit growth this article mentions are coming from. If that's it, than I would expect the markets reaction to be brutal.

Analyst consensus was last time I checked for 18% earnings growth.


Discl: hold still a small number of SML shares, but only to give me AGM access and to remind me to keep following them.

Earnings weighted to second half mate

[Beagle]

https://www.marketscreener.com/SYNLAIT-MILK-LTD-14391761/financials/

Market average view is for earnings growth of 18% in FY19. My expectation is this will be exceeded.

[petty]

Interesting article but Im expecting earnings growth to exceed 18% also. If If has increased 16% as the same article outlines then 5% should be significantly exceeded,

However, for those more across books than I. Where does capex for Pokeno sit regarding earnings for the year? FUrther and I imagine that operating costs of pokeno will be starting to be incurred prior to revenue being realised. WIll this hold back results?

[Beagle]

Interesting article but Im expecting earnings growth to exceed 18% also. If If has increased 16% as the same article outlines then 5% should be significantly exceeded,

However, for those more across books than I. Where does capex for Pokeno sit regarding earnings for the year? FUrther and I imagine that operating costs of pokeno will be starting to be incurred prior to revenue being realised. WIll this hold back results?

In my opinion it is normal that all development costs will be capitalised and treated as capex i.e. no impact on profit.

[sb9]

Ok, time to refresh previous period numbers just in time for 1H results.

For FY'17 - Full Year NPAT of $39.5m of which 1H was $10.6m

For FY'18 - Full Year NPAT of $74.6m of which 1H was $40.7m

EPS curerntly sits at $0.42c with current P/E of between 26-27.

I'm picking growth in NPAT of around 30% resulting in profit of $53m which translates into $0.59c EPS
(annualised).

A PE multiple of 20 (low) puts the price at $11.80, at 23 (mid) the price is $13.50 and at 26 (high) the price is $15.35.

Let's see how numbers actually turn out to be.

Happy to listen to others opinion.

[winner69]

Ok, time to refresh previous period numbers just in time for 1H results.

For FY'17 - Full Year NPAT of $39.5m of which 1H was $10.6m

For FY'18 - Full Year NPAT of $74.6m of which 1H was $40.7m

EPS curerntly sits at $0.42c with current P/E of between 26-27.

I'm picking growth in NPAT of around 30% resulting in profit of $53m which translates into $0.59c EPS
(annualised).

A PE multiple of 20 (low) puts the price at $11.80, at 23 (mid) the price is $13.50 and at 26 (high) the price is $15.35.

Let's see how numbers actually turn out to be.

Happy to listen to others opinion.

Like that 30% earnings growth sb9

You usually pretty close to the mark (except with Trilogy but I’ll forgive you for that) so it looks like Wednesday could be a good day

[sb9]

Like that 30% earnings growth sb9

You usually pretty close to the mark (except with Trilogy but I’ll forgive you for that) so it looks like Wednesday could be a good day

Must've caught in the hype with Trilogy at that time.

[Beagle]

Ok, time to refresh previous period numbers just in time for 1H results.

For FY'17 - Full Year NPAT of $39.5m of which 1H was $10.6m

For FY'18 - Full Year NPAT of $74.6m of which 1H was $40.7m

EPS curerntly sits at $0.42c with current P/E of between 26-27.

I'm picking growth in NPAT of around 30% resulting in profit of $53m which translates into $0.59c EPS
(annualised).

A PE multiple of 20 (low) puts the price at $11.80, at 23 (mid) the price is $13.50 and at 26 (high) the price is $15.35.

Let's see how numbers actually turn out to be.

Happy to listen to others opinion.

For what its worth I am quite happy with your numbers mate.

[sb9]

For what its worth I am quite happy with your numbers mate.

Let's hope so, my growth prediction is on back of what A2 has delivered last month. And SML call themselves as "we're a growth company" from their presentations. So for that to be true they should be growing at least 30% yoy if not more.

[Beagle]

Let's hope so, my growth prediction is on back of what A2 has delivered last month. And SML call themselves as "we're a growth company" from their presentations. So for that to be true they should be growing at least 30% yoy if not more.

Absolutely they're a growth company just like SUM others but keep in mind growth doesn't always happen in a linear fashion. FY20 growth when Pokeno is commissioned is going to be awesome as will FY21 when they will get a full year's impact of all their additional plant capacity.
I think the last official production forecast the company made many months back was very conservative and am fully expecting a significant upgrade on the back of ATM results like you are.

[King1212]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12213930

[nzsharetrade]

rebalance did not do anything yesterday? not even volume?

[sb9]

Looks as though aussies didn’t wanna miss on opening bounce following tomorrow morning announcement from Synlait. Pushed it higher at close to A$ 11.18 which equates to NZ 11.57 on current cross rate.

Let’s see what tomorrow has in store for us eager holders, good luck all.

[Beagle]

Looks as though aussies didn’t wanna miss on opening bounce following tomorrow morning announcement from Synlait. Pushed it higher at close to A$ 11.18 which equates to NZ 11.57 on current cross rate.

Let’s see what tomorrow has in store for us eager holders, good luck all.

Thanks for sharing that mate :)

[minimoke]

Our HY19 NPAT of $37.3 million is 9.6% lower than the $41.3 million achieved in HY18. This remains a solid result for the first half of the year, with increased sales volumes achieved across our powders and cream and lactoferrin businesses. The higher sales volumes were achieved due to our ability to increase production volumes off the same asset base, a very pleasing result and representative of the efficiencies we are developing in manufacturing through our Integrated Work Systems (IWS) programme.

While our sales volumes of fully finished infant formula were slightly ahead of HY18, these were delivered at lower margins. This is a result of the new pricing agreement entered into with The a2 Milk Company™ last July, as well as not having the benefit of the higher margin sales to our China based customers that we enjoyed in HY18. These brands are awaiting State Administration for Market Regulation (SAMR) registration.

The HY19 result also benefited from the increased efficiencies of our manufacturing plant. We processed 12.4% more milk than in HY18 into 90,466 Metric Tonnes (MT) of product, a 10.5% increase on FY18. This also reflected higher sales volumes of our powder and cream products at 56,116 MT (HY18 46,111 MT) and a higher closing finished goods inventory (HY19 – 44,344 MT vs HY18 35,040 MT)

[bull....]

as mentioned earlier on this thread a2 screwed them down on price which translated to lower margins for them. the problem for manufactureres always have to do what there big customers say lol anyway still doing good

[petty]

Ouch that’s a dirty result. Second half will be critical. Haven’t had time to review all the results but headline isn’t flash

[RTM]

as mentioned earlier on this thread a2 screwed them down on price which translated to lower margins for them. the problem for manufactureres always have to do what there big customers say lol anyway still doing good

And their biggest customer is also a partial owner to complicate things further. Need to own ATM as well to enjoy the full profit I guess.

[minimoke]

Not impressed. Revenue gone up but cost of sales gone up more. This is going backwards

[minimoke]

Sales and distribution expenses up 44%. But they have have not covered increased expense with revenue. Going backwards.

Admin expenses gone up. Going backwards.

[winner69]

You knew from the headline “SIGNIFICANT INVESTMENT IN MAJOR GROWTH PROJECTS FOR SYNLAIT” that the bottom line was going to be ****e

Looks like i’ve got another investment in one of these gunna companies...one day with a bit of luck it might gunna be a boomer

The believers probably get a another ‘great buying opportunity’ and the ‘bargain of the century’ day

[RTM]

"This is a result of the new pricing agreement entered into with The a2 Milk Company™ last July, as well as not having the benefit of the higher margin sales to our China based customers that we enjoyed in HY18. These brands are awaiting State Administration for Market Regulation (SAMR) registration."

I'd missed that they were awaiting registration for one of their products...…..

[bull....]

And their biggest customer is also a partial owner to complicate things further. Need to own ATM as well to enjoy the full profit I guess.

they have the s/h in them too stop anyone taking them over i reckon , probably the only reason

[Beagle]

STRONG GROWTH EXPECTED IN THE SECOND HALF OF FY19
We remain on track for our full year canned infant formula (IFC) volume guidance at between 41,000 – 45,000 MT, with significantly higher volumes forecast to be delivered in the second half of FY19 compared to the second half of FY18, which saw only an 11% uplift on the first half.
The volume growth in the second half of FY19 is driven by strong growth in The a2 Milk Company’s™ (a2MC) infant formula products. We maintain our outlook that full year profitability is expected to increase in FY19,

Obviously some serious investment in new staff and R&D going on to drive growth in FY20 and beyond. "Rome wasn't built in a day"

[winner69]

Impressive result applauded by Shareholders

Love their headlines

[hardt]

1H18 GP per MT 1,400 (up from 800 PCP)
1H19 GP per MT 1,164 (2H19 1195 )
They had signal the outlier of 1H18 last year.

Expecting an overreaction to this one -10%

Future growth is significant.
Great hold for many years to come.

Cheese acq online August, Pokeno and Dunsandel adding in for next year's supply.

The market will end up being surprised by what is not very surprising.

[minimoke]

Ah here's the problem. Too busy w@anking around with this "diversity" palava.

"As part of our commitment to looking after our people, we launched our Diversity and Inclusion working group at the end of 2018. The group aims to bring to life diversity and inclusion in our business. A special sub-group to support women leaders has also been launched."

Focus should be selling product to customers and increasing value to shareholders.Well, so far they score a big "FAIL".

Time for them to cut the crap and focus solely on getting best people for the job - and they need that because some of them are failing to control expenses.

[percy]

Not impressed. Revenue gone up but cost of sales gone up more. This is going backwards

No divie.?

[winner69]

Earnings weighted to second half mate

See BlackPeter ....earnings are going to be weighted to second half

No worries

[minimoke]

No divie.?cash has dropped, YOY, $75m down to $13M. I dont want to see them borrowing just to pay a divy.

[winner69]

No divie.?

Minimoke should be happy ...something didn’t go backwards

[RTM]

At least they have nothing to get rid of in Venezuela.
(or have I missed that to ?)

[Beagle]

Ah here's the problem. Too busy w@anking around with this "diversity" palava.

"As part of our commitment to looking after our people, we launched our Diversity and Inclusion working group at the end of 2018. The group aims to bring to life diversity and inclusion in our business. A special sub-group to support women leaders has also been launched."

Focus should be selling product to customers and increasing value to shareholders.Well, so far they score a big "FAIL".

Time for them to cut the crap and focus solely on getting best people for the job - and they need that because some of them are failing to control expenses.

Take a few breaths mate. Look the headline number is a little disappointing but they're clearly investing millions in staff gearing up for future growth. Overall they still expect profit growth for FY19 (despite this extra spend to build growth for FY20 and beyond) and obviously growth in FY20 and beyond with all the new plant and initiatives coming on stream is going to be very good. Rome wasn't built in a day and good companies aren't either.
Encouraging diversity is very much "on trend" at present and so it should be after what happened last week.

[pg0220]

See BlackPeter ....earnings are going to be weighted to second half

Earnings growth in 2nd half is driven by a strong growth in sales to A2M. Knowing the supply is at lower margin which screwed up the performance in 1st half, is the bottom line still going to be impressive in the second half?

Disc. a long term holder

[winner69]

cash has dropped, YOY, $75m down to $13M. I dont want to see them borrowing just to pay a divy.

Cash flow .....some say the best measure of performance

Only $31m v $75m pcp bit of a disaster

Hope the $200m on new factory produces cash in the future eh

[winner69]

Yep minimoke ....be a lot better when they get rid of some of the ‘mediocre men’ and get deserving women on board.

[Raz]

"clearly investing millions in staff gearing up for future growth"

Didn't get back here last week. I made a comment last week on this company. Winner covered my thoughts on the CEO very well. The management of this staff ramp up and quality of staff recruited is my chief concern.

[winner69]

Suppose the $65m increase in inventory to $235m is a good sign.

[RTM]

Yep minimoke ....be a lot better when they get rid of some of the ‘mediocre men’ and get deserving women on board.

If you change men for people....and women for people, then I completely agree with you.

[minimoke]

. Overall they still expect profit growth for FY19
They are behind the 8 ball at the half way mark. Margins being squeezed. Expenses going up. I am not so confident.

But, in taking a breath I have put my money in as a long term hold. I am currently well up so well positioned to take a beating today.

[minimoke]

If you change men for people....and women for people, then I completely agree with you.+1. Its not that hard!

[BlackPeter]

See BlackPeter ....earnings are going to be weighted to second half

No worries

I am not worried.

Discl: Not holding (but a small AGM entry ticket););

[Beagle]

They are behind the 8 ball at the half way mark. Margins being squeezed. Expenses going up. I am not so confident.

But, in taking a breath I have put my money in as a long term hold. I am currently well up so well positioned to take a beating today.

The road to future prosperity is seldom wide, smooth and without bumps along the way. I will probably be telling myself that all day lol

[Balance]

Currently trading on a historical PER of 27 times.

We may see re-appraisal of growth prospects down to 20X - 22X in the next few days - $8.36 to $9.20.

As my investment mentor used to tell me, don't wait for others to move or follow when facing a downgrade - move fast and move first!

[sb9]

While our sales volumes of fully finished infant formula were slightly ahead of HY18, these were delivered at lower margins. This is a result of the new pricing agreement entered into with The a2 Milk Company™ last July, as well as not having the benefit of the higher margin sales to our China based customers that we enjoyed in HY18. These brands are awaiting State Administration for Market Regulation (SAMR) registration.


Hmmm...didn't expect that would happen when i did numbers. Obviously was way off the mark.

[LAC]

Not impressed at all, was sooo close to dipping my toes into this one but ended up with a few more OCA instead. Was only looking at it to diversify the portfolio a little but best to just stick with what I know, the milk industry isnt for me "yet"

[777]

The big over reaction on the market about to take place on a measly 20000 odd shares.

[minimoke]

$9.85 in pre-open. We are going to get smashed today!

[bull....]

pe silly for a manufacturer wise people should have taken profit before result in knowledge that a2 screwed them on price

[oldtech]

Ouch! Down 144 ...

[Balance]

The big over reaction on the market about to take place on a measly 20000 odd shares.

Wait for ASX to open.

That's when the real damage will be done, or undone.

[BlackPeter]

Ah well - I had a bad feeling when the new CEO introduced during last years AGM this new colour schema. Is it just me getting goosebumps with that much pink? I guess we are here still selling milk, aren't we? Prefer as well black numbers instead of soft red-ish (sorry, is this pink?) bars.

Net debt as high as it ever was and predicted to increase. Lets hope interest rates stay low - shall we?

10403

Ah yes - and the gross profit trend dows not really look encouraging. Sure - one number does not make a trend and two is still a bit light, but now with three HY results it does look like an established downtrend:

10404

Appologies for the colour schema - I know it looks terrible, but I don't know how to get rid of this ugly pink ...

[bull....]

a2 will screw them on price again for sure thats what major customers do. thats why a2 is the preferred investment

[Balance]

Capital raising next to fund said investments?

One way for Bright Foods to underwrite and increase its stake?

[Balance]

Currently trading on a historical PER of 27 times.

We may see re-appraisal of growth prospects down to 20X - 22X in the next few days - $8.36 to $9.20.

As my investment mentor used to tell me, don't wait for others to move or follow when facing a downgrade - move fast and move first!

Try selling 10k shares now and it's $9.00! :eek2:

[bull....]

Capital raising next to fund said investments?

One way for Bright Foods to underwrite and increase its stake?

a2 has the blocking stake , they want to control there manufacturing , sml just a pawn for a2

[couta1]

Try selling 10k shares now and it's $9.00! :eek2: Train wreck material, bad trade rising.Lol

[King1212]

Love this forum ..ramping and the ma key reaction....:eek2:

[nzsharetrade]

nothing to say. Loading.

[whatsup]

so where is fair value here?

[winner69]

If you change men for people....and women for people, then I completely agree with you.

And I agree with you ....except that some ‘merit’ people lose out because they are seen as different people

[bull....]

rediculous multiples for this company look at multiples of comparable to see whre price should be ... heaps lower

[Beagle]

Brutal price reaction...a bit tough I would have thought.

[winner69]

"This is a result of the new pricing agreement entered into with The a2 Milk Company™ last July, as well as not having the benefit of the higher margin sales to our China based customers that we enjoyed in HY18. These brands are awaiting State Administration for Market Regulation (SAMR) registration."

I'd missed that they were awaiting registration for one of their products...…..

That’s a big worry

Synlait not worth what it is today as a milk processor (the stainless steel that Bell Potter referee to) — the value is in their IP such as these registrations

[Balance]

Currently trading on a historical PER of 27 times.

We may see re-appraisal of growth prospects down to 20X - 22X in the next few days - $8.36 to $9.20.

As my investment mentor used to tell me, don't wait for others to move or follow when facing a downgrade - move fast and move first!

Looks like it will reach there today!:scared:

And ASX is yet to come! :eek2::eek2::eek2:

[minimoke]

Ah well - I had a bad feeling when the new CEO introduced during last years AGM this new colour schema. Is it just me getting goosebumps with that much pink? .While the new CEO was busy coming up with a pretty new rainbow color, the new CEO of ATM was busy screwing them over on margin.

[winner69]

rediculous multiples for this company look at multiples of comparable to see whre price should be ... heaps lower

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.

[whatsup]

The biggest question today that has been revealed by todays ann is its level of cash, will there be a C R is the question that is foremost to my mind, how long will its current cash last before the new factory is generating max cash ?

[whatsup]

Is this the bottom atm until aussie opens ?

[blackcap]

very much "on trend" at present and so it should be after what happened last week.

Why? Why is diversity even a "positive"? I would put it about neutral myself but forced diversity is almost always negative. Diversity itself if organic is good, but when you force it it becomes counter productive and creates a heck of a lot more problems than it solves.
People generally don't like "diversity" imposed upon them, but they are often pleased by it when they opt in, or when it simply happens to them. The danger comes when life insulates us, either by design or incidentally. The danger of market driven filter-bubbles is immense.

[King1212]

Sometimes I enjoyed this forum..but a lot of rampers that created chaos n make people sell in loss....remember guys..many of people here are also new investors...

[youngatheart]

Wow. The share price has dropped 20% and your biggest issue is whether to allow women on the board or not, lol.

[sb9]

While the new CEO was busy coming up with a pretty new rainbow color, the new CEO of ATM was busy screwing them over on margin.

Quite different to Penno, isn't the new CEO.

[Balance]

Sometimes I enjoyed this forum..but a lot of rampers that created chaos n make people sell in loss....remember guys..many of people here are also new investors...

Learn to differentiate between rampers and those who offer genuine thoughts and experiences.

[Balance]

While the new CEO was busy coming up with a pretty new rainbow color, the new CEO of ATM was busy screwing them over on margin.


Hmmmm .... an image forms in my mind and it beggars belief!

[mondograss]

Sometimes I enjoyed this forum..but a lot of rampers that created chaos n make people sell in loss....remember guys..many of people here are also new investors...

You could give yourself whiplash trying to follow the opinions on this forum from one day to the next.

[winner69]

Message for new investors

This half year result just a blip on the radar on the path to long term riches

Remember Rome wasn’t built in a day

[Balance]

Message for new investors

This half year result just a blip on the radar on the path to long term riches

Remember Rome wasn’t built in a day

Or it could be the turning point down the hill? :eek2:

[Beagle]

While the new CEO was busy coming up with a pretty new rainbow color, the new CEO of ATM was busy screwing them over on margin.

I am trying to recall if this is my bad that I can't recall it or whether this new lower margin ATM supply contract has previously been communicated to the market at any stage ?

[sb9]

I am trying to recall if this is my bad that I can't recall it or whether this new lower margin ATM supply contract has previously been communicated to the market at any stage ?

I don't recall that being communicated to the market, as they say the agreement is confidential.

Anyone here managed to listen to conf call hosted by CEO and CFO this morning, was bit busy myself with other things.

[peat]

$A10.49 is the current match price on pre-market in Aussie.

NZ version only $9.59

Cross rate = 1.03
??

[pg0220]

Phew looks like we hit the bottom today, unless ASX feels angrier than us.....

Just had a further thought. ATM def screwed up SML with margin but it is a minimum 5year exclusive supply contract and it is actually a valuable contract to SML. It has made the GP look bad for now but in a couple of years SML will still enjoy an increase in supply to ATM as well as an increase in profit. ATM has a siginificany stake in SML and I dont think they want to see a decrease in their investment.

[bull....]

I am trying to recall if this is my bad that I can't recall it or whether this new lower margin ATM supply contract has previously been communicated to the market at any stage ?

you just know when a company agrees to a new supply contract with there biggest customer that its bad for sml

Pricing terms that reflect the commitment on the part of both companies to an ongoing market-competitive pricing regime

https://www.nzx.com/announcements/320294

it was a give away they got screwed

[stoploss]

$A10.49 is the current match price on pre-market in Aussie.

NZ version only $9.59

Cross rate = 1.03
??
Way too early to take any consideration of the Aussie match , you know the professionals are going to hold off till the very last second .......

[Beagle]

Quite different to Penno, isn't the new CEO.

Yes, very very different...about as different as the change in CEO at ATM but in different ways.

I am not convinced that the change in pricing on the ATM contract was clearly communicated by the company but they were at great pains to highlight cultural and diversity initiatives at the last reporting period and we see that continue on in this one.

To those that expect the more experienced here to predict the future with complete clarity, try and remember that predicting the future is extremely difficult.
We had a professional analyst predicting $47m just the other day...and we get just $37m. These professional analysts have access to special company visits outside of normal reporting periods that private investors (unless they have a really big stake simply do not) so theoretically they're in a better position to make a professional assessment.

Anyway..the company still thinks full year will see growth but I think the growth will be quite modest now. https://www.marketscreener.com/SYNLAIT-MILK-LTD-14391761/financials/
I expect analyst downgrades to the previously expected 18% eps increase and the share price fall today may be warranted, although at face value it seems extreme but a $37m result when some analysts were expecting $47m is a major miss, by some 22% !

If the company can make say 43 cps for the full year at $9.60 that puts the company on a forward FY19 PE of 22.3.
I don't see the prospect of a divvy for many years with all the capex.

[Beagle]

I don't recall that being communicated to the market, as they say the agreement is confidential.

Anyone here managed to listen to conf call hosted by CEO and CFO this morning, was bit busy myself with other things.

I think that's very poor...should have been disclosed. Sorry was too busy to listen in, results speak for themselves.


you just know when a company agrees to a new supply contract with there biggest customer that its bad for sml

Pricing terms that reflect the commitment on the part of both companies to an ongoing market-competitive pricing regime

https://www.nzx.com/announcements/320294

it was a give away they got screwed

Not a giveaway and I don't recall anyone saying that at the time, (you might have) but I don't recall. Hindsight is always 20/20.

I think the agreement is obviously at a considerably lower margin and with the lack of registration of other initiatives yet and the implications of supplying ATM at a considerably lower margin for the reminder of that 5 year deal...my growth assumptions have been materially reduced.

I think analysts will trim back future eps growth assumptions too. Savage share price reaction now looks logical considering everything.
John Penno did a stellar job as the former CEO as did the former CEO of ATM.
I have real reservations about both of these new CEO's now. When they start trumpeting achievements on diversity initiatives as though they have really achieved something absolutely marvellous one does start to wonder...

[bull....]

I think that's very poor...should have been disclosed. Sorry was too busy to listen in, results speak for themselves.



Not a giveaway and I don't recall anyone saying that at the time, (you might have) but I don't recall. Hindsight is always 20/20.

I think the agreement is obviously at a considerably lower margin and with the lack of registration of other initiatives yet and the implications of supplying ATM at a considerably lower margin for the reminder of that 5 year deal...my growth asperations have been materially trimmed.

yes i did mention it , but of course you would have written the comment off as not fitting your bullish case lol

[Beagle]

yes i did mention it , but of course you would have written the comment off as not fitting your bullish case lol

Even a broken clock is right occasionally, actually twice a day lol

Aussie price action this afternoon could be interesting.

[Balance]

Even a broken clock is right occasionally, actually twice a day lol

Aussie price action this afternoon could be interesting.

Some short coverings to lock in nice profits or relief at being able to get out without horrendous losses.

[Beagle]

I've had a really good look and think about this now.

http://www.sharechat.co.nz/article/0325a505/synlait-shares-plunge-on-1h-profit-decline-lower-margins.html

FCNZ analyst unimpressed and the same applies to me.


The lack of transparency in terms of Synlait not telling the market about the terms of this new contract has blindsided minority SML shareholders and explains why a major gap has opened up between the relative share prices of these two companies in recent months. Some major shareholders were obviously "in the know"
John Penno was a great CEO but as with ATM we now get an unknown quantity with a whole lot to prove... but we do get lovely pink colours and heaps of slides and details about diversity programs...its just absolutely marvellous, that's exactly what I have been hankering for all these years (sarcasm intended).

I think both ATM and SML are very fully priced and an awful lot of future growth is already priced in but in all sincerity I wish the best of luck to shareholders of both companies. Beagle

I'm completely out. I expected a minimum of $45m and it is only now we learn about this much lower contract margin to ATM which has enduring effects on future profitability for all time going forward. Broker DCF model assumptions will be in for a big change ! Lack of progress with registration of other product is a real concern in this new much cooler climate of relations with China. When will these ever achieve certification approval ?

I note the current average 12 month price target of professional analysts is just $9.73 (no dividends so I discount this by at least 8% to get implied fair value today of just $8.95) and I am expecting multiple significant analyst downgrades as a result of this announcement today.

We've been blindsided here and I for one won't wait around to see the disappointment going forward as I feel now with much lower margins many years of future growth is already fully priced in.

[RTM]

I'm out at 10.01. Average buy 2.35ish so not to disappointed. Will have another look if they approach 8.00.
But I think I am better to look for something that pays a dividend.

[peat]

just like OCA, this is why I dont overexpose myself to any particular company, there are often surprises and disappointments and an individual human can not be expected to anticipate and avoid them. I'd reduced on this one a little while back due to the preference of having a balanced portfolio. Still a reasonable chunk at 15% but allows me to cope with volatility.
I dont quite understand how we got screwed by ATM though. They wanted lots of our product , couldnt go anywhere else to get it (afaik) and yet managed to beat us down in price. Hmmm

[nzsharetrade]

just like OCA, this is why I dont overexpose myself to any particular company, there are often surprises and disappointments and an individual human can not be expected to anticipate and avoid them. I'd reduced on this one a little while back due to the preference of having a balanced portfolio. Still a reasonable chunk at 15% but allows me to cope with volatility.
I dont quite understand how we got screwed by ATM though. They wanted lots of our product , couldnt go anywhere else to get it (afaik) and yet managed to beat us down in price. Hmmm


looks like the ceo of atm will keep screwing atm and not limited to atm...:eek2:...I believe the short will build from now to Aug or until full-year result with ATM.

[sb9]

Like others, lightened my exposure by offloading a third this arvo.

[pg0220]

Completely sold out at $10 today. I think the company will look good in 2-3 years but just needed cash in short term and $10.08 which was about today's high looked like the best it could hold. I remember this SML SP was very depressed a couple of years ago when I bought in and that was when they were in preparation phase for much growth with ATM. I remember that the SP couldn't quite rise much for a long time until they announced a huge growth with excellent margins reported. It looks like we will enter that phase again and it will be at least another 1-2 years until we see the market gets excited with SML....

[Beagle]

just like OCA, this is why I dont overexpose myself to any particular company, there are often surprises and disappointments and an individual human can not be expected to anticipate and avoid them. I'd reduced on this one a little while back due to the preference of having a balanced portfolio. Still a reasonable chunk at 15% but allows me to cope with volatility.
I dont quite understand how we got screwed by ATM though. They wanted lots of our product , couldnt go anywhere else to get it (afaik) and yet managed to beat us down in price. Hmmm

Beggars belief doesn't it. Management appear to have plenty of time to work on cultural sensitivity, diversity and other such programs and yet they drop the ball with the one thing shareholders expect of them. Disappointed is sometimes such an inadequate word. Bitterly disappointed...there, that describes it for me.

[RTM]

just like OCA, this is why I dont overexpose myself to any particular company, there are often surprises and disappointments and an individual human can not be expected to anticipate and avoid them. I'd reduced on this one a little while back due to the preference of having a balanced portfolio. Still a reasonable chunk at 15% but allows me to cope with volatility.
I dont quite understand how we got screwed by ATM though. They wanted lots of our product , couldnt go anywhere else to get it (afaik) and yet managed to beat us down in price. Hmmm

Yes....pleased to have moved on. They were about 4.5% of my portfolio. Agree with your comment re diversification...see earlier post if interested. Post 4255

https://www.sharetrader.co.nz/showthread.php?4371-TRA-Turners-Automotive-Group-previously-TNR-Turners-Limited/page284

Another thing that has become clear to me is that the quality of the management is paramount. We can speculate, model, up ramp, down ramp all we like on here...and I enjoy the analysis that Mr Beagle etc provides as much as anyone (thankyou). Remember SUM heading down ? HGH needing to raise cash, etc etc. But at the end of the day the company officers are the only ones who really know what is going on. And they can be economical with the info they provide to the market. So somehow....I need to make sure I orientate / weight my investments to companies where I can trust the management and are in sectors I like / understand. Not quite sure how to do that. And if I can't then, yes, diversification is certainly a way to minimise the pain when one of your punts goes south.

[horus1]

The same comments apply to directors. You Are dead right.

[winner69]

Must say Financals and the numbers in the presentation are very obtuse - they’re all over the place.

Probably done to confuse mere mortals like me but then I might be just plain stupid.

Maybe ts a bit like what maverick says about Oceania - the clever ones can see through the numbers and see how fantastic future profits will be, the majority Ar going to miss out.

[Beagle]

Yes....pleased to have moved on. They were about 4.5% of my portfolio. Agree with your comment re diversification...see earlier post if interested. Post 4255

https://www.sharetrader.co.nz/showthread.php?4371-TRA-Turners-Automotive-Group-previously-TNR-Turners-Limited/page284

Another thing that has become clear to me is that the quality of the management is paramount. We can speculate, model, up ramp, down ramp all we like on here...and I enjoy the analysis that Mr Beagle etc provides as much as anyone (thankyou). Remember SUM heading down ? HGH needing to raise cash, etc etc. But at the end of the day the company officers are the only ones who really know what is going on. And they can be economical with the info they provide to the market. So somehow....I need to make sure I orientate / weight my investments to companies where I can trust the management and are in sectors I like / understand. Not quite sure how to do that. And if I can't then, yes, diversification is certainly a way to minimise the pain when one of your punts goes south.

I must say I really do like your approach as clearly articulated in that post your referenced. Makes compelling common sense.
Got to say that this one hurts as I had high hopes for future growth and I feel that management have been more than a little economical with the truth...actually quite disingenuous. In my late 50's I make no secret of the fact that I'm tired of counting beans and looking to add more retirement to the term semi retired so a further tilt in my portfolio towards dependable dividend payers is where I'm headed. What's dependable and who can you trust...that's the $64,000 question isn't it !

[RupertBear]

Well not quite the result the Bear was hoping for :( I did manage to pick the bottom though as I managed to SELL a few at $9.30 :scared: :rolleyes: Oh dear. Oh well I did sell a few @ $11.20 on Monday to some poor buggar so I guess its swings and round abouts. Bailed completely at $9.90 with a small profit but happy to be out as my Bear gut tells me this will probably go lower and I have totally lost faith in management. GLH

[tzbang]

I am also out. Been a holder of SML since $4.50. WAs 50% of my portfolio.
Being blindsided like this isn't something I forgive easily and in this current climate and my personal financial position - it's no longer worth the risk for me.

Still hold ATM and will consider topping that up a bit.

[minimoke]

I have a sell order in play for my total holding and waiting for someone to match my offer.

I am continually frustrated by all this corporate "diversity" bvllsh1t". That along with a failure to manage margins and costs as well as being conservative with alerting the market to how dire this current position was mean I have to put my money where my mouth is. I no longer hold the love.

[Ggcc]

I believe it is oversold for now as people are transferring their money from SML to ATM. Just a hunch as A2 share price doing ok

[McGinty]

It's all been covered here already, but I'm also disappointed with the board and management. There should have been an update to the market before now that foreshadowed a HY earnings drop of 9-10% (this amount is material and would fall into the continuous disclosure requirements of the listing rules).

I would expect all brokers analysis to downgrade their assessment of SML and a re-rate will be forthcoming. I wouldn't be surprised to see a new 2 year lows hit in the months ahead either.

Disc: Sold all today

Note: I would guess that TRA and SKT are happy that they are not the only boards/management on the ST community's sh*t list

[RTM]

I must say I really do like your approach as clearly articulated in that post your referenced. Makes compelling common sense.
Got to say that this one hurts as I had high hopes for future growth and I feel that management have been more than a little economical with the truth...actually quite disingenuous. In my late 50's I make no secret of the fact that I'm tired of counting beans and looking to add more retirement to the term semi retired so a further tilt in my portfolio towards dependable dividend payers is where I'm headed. What's dependable and who can you trust...that's the $64,000 question isn't it !

Its all so easy in hindsight. Obvious now that ATM would squeeze them on price. What was I thinking ? Maybe we all need a little more Bull... from time to time.

[Beagle]

Its all so easy in hindsight. Obvious now that ATM would squeeze them on price. What was I thinking ? Maybe we all need a little more Bull... from time to time.

No, its clearly a symbiotic relationship and they need each other just as much. One can only assume the stake ATM has in SML gave them a competitive advantage in negotiations or was it that the board of SML are simply weak ? No, please don't encourage him, he doesn't need it.
The new CEO comes from Fonterror...probably just a very ordinary player is a terribly company. I am sorry but I think the board have called his appointment wrong.
He wasted no time whatsoever climbing right onto the very top of the diversity and cultural sensitivity bandwagon as soon as he was appointed as though this was his top priority and the most urgent area of reform needed.

The clue we overlooked factoring in properly was the culture of where he came from. Some famous person once said "Man is a product of his environment"

[percy]

It's all been covered here already, but I'm also disappointed with the board and management. There should have been an update to the market before now that foreshadowed a HY earnings drop of 9-10% (this amount is material and would fall into the continuous disclosure requirements of the listing rules).

I would expect all brokers analysis to downgrade their assessment of SML and a re-rate will be forthcoming. I wouldn't be surprised to see a new 2 year lows hit in the months ahead either.

Disc: Sold all today

Note: I would guess the TRA and SKT are happy that they are not the only boards/management on the ST community's sh*t list

TRA board and management have remained on my "Gold Star" high conviction list.
SKT have not.
SML I sold out when I realised it would be years before they ever paid a dividend.

[JeremyALD]

Anyway you put it it's a very disappointing result and the forecast is very vague. Not the same pace of growth? Well that was obvious, but what sort of growth are they talking - 5%?

The risk profile and lower growth rates just doesn't warrant the valuation imo. I'm surprised it hasn't fallen lower considering it was $10 a month ago

[BlackPeter]

Anyway you put it it's a very disappointing result and the forecast is very vague. Not the same pace of growth? Well that was obvious, but what sort of growth are they talking - 5%?

The risk profile and lower growth rates just doesn't warrant the valuation imo. I'm surprised it hasn't fallen lower considering it was $10 a month ago

Things take time, not everybody is sitting all the day at the computer monitoring AND analysing the stock announcements.

Just wait for the analysts changing their recommendations.

Oops - just noticed that SML was already prior to the results only on HOLD with a target price of $9.73. Thats what my spreadsheet (updated three days ago) says. There must have been a reason I sold prior to the results ;). Better nobody complain anymore about the analysts - sometimes these guys and gals are performing plain magic;

Anyway, give it two days or three and I am sure recommendations and target prices will be lower. Give it another couple of days for the brokers to mail out their new analysis - and then watch the share price dropping.

Just make sure you take your foot away from where the SP is touching the ground - otherwise you might get hurt ... :p

[Raz]

Give it time, more bad news to come.

[Baa_Baa]

Give it time, more bad news to come.

Maybe, I don't have those insights to be certain about it though. Some believe bad news begets more bad news and therefore that's enough for them to bail on the first sign of bad news. I don't think it's necessarily reliably correlated though, certainly a possibility but not a probability.

What I see from the TA is a highly reactionary one-day response to perceived bad news and the uncertainty that surrounds that as the SP traded in a wide range and settled in the middle .. or maybe it's not 'bad' news per se, but news that was not expected!

Various people here have broadcast their concerns that material information appears to have been withheld, or not made obvious in disclosures. SML would be considered naive, or worse negligent, to have failed to realise what the results represent a material divergence from guidance or worse than that, a considered denial of their responsibility for disclosure. Surely not.

I give them the benefit of the doubt, that they just f'd up this time but the business is still solid and they're unlikely to make the same stupid mistake again anytime soon. Further, some suggest that the failure to disclose prior has been glossed over by soft feel good messaging in their reporting. That would no doubt concern shareholders as we have seen even in our relatively small community, resulting in a concerted exodus today.

If nothing else, I think ST's community has a learned response to 'react then think' which is sometimes more important than 'think then react'. A whole lot of people bailed today and took profits that might not be there tomorrow or the next day. Bravo to them, if the hypothesis holds that SML got way overpriced and they withheld information from us and the SP just goes lower and lower.

It's a severe blow to the slow march up from $8.05 lows late last year, or is it? One day has ruined only a few short months of SP appreciation. But it's not a calamity, far from it. A TA might notice that the price range fits very closely between the 100MA and the 50MA, like some magic forces that bounded the trading range.

Personally I'm not that worried, and didn't react today because of it, unless the SP decided to drop to or below $8 which I see as solid support. Then I'd decide whether to quit my investment or buy into the SP weakness. One might consider that SML in the long haul have a massively growing pipeline for their product and any SP weakness for whatever reason doesn't counter the investment in growing production capacity to meet the growing demand. It may even be an opportunity to buy SML while the buying is good, and hold for the long game.

Intriguing. Days like this I enjoy as I learn how fickle the market is and how effective patience can be.

[minimoke]

Maybe NZ has oversold. Oz closed at AUD$9.62 or NZ$9.97

[Chanchay]

Maybe, I don't have those insights to be certain about it though. Some believe bad news begets more bad news and therefore that's enough for them to bail on the first sign of bad news. I don't think it's necessarily reliably correlated though, certainly a possibility but not a probability.

What I see from the TA is a highly reactionary one-day response to perceived bad news and the uncertainty that surrounds that as the SP traded in a wide range and settled in the middle .. or maybe it's not 'bad' news per se, but news that was not expected!

Various people here have broadcast their concerns that material information appears to have been withheld, or not made obvious in disclosures. SML would be considered naive, or worse negligent, to have failed to realise what the results represent a material divergence from guidance or worse than that, a considered denial of their responsibility for disclosure. Surely not.

I give them the benefit of the doubt, that they just f'd up this time but the business is still solid and they're unlikely to make the same stupid mistake again anytime soon. Further, some suggest that the failure to disclose prior has been glossed over by soft feel good messaging in their reporting. That would no doubt concern shareholders as we have seen even in our relatively small community, resulting in a concerted exodus today.

If nothing else, I think ST's community has a learned response to 'react then think' which is sometimes more important than 'think then react'. A whole lot of people bailed today and took profits that might not be there tomorrow or the next day. Bravo to them, if the hypothesis holds that SML got way overpriced and they withheld information from us and the SP just goes lower and lower.

It's a severe blow to the slow march up from $8.05 lows late last year, or is it? One day has ruined only a few short months of SP appreciation. But it's not a calamity, far from it. A TA might notice that the price range fits very closely between the 100MA and the 50MA, like some magic forces that bounded the trading range.

Personally I'm not that worried, and didn't react today because of it, unless the SP decided to drop to or below $8 which I see as solid support. Then I'd decide whether to quit my investment or buy into the SP weakness. One might consider that SML in the long haul have a massively growing pipeline for their product and any SP weakness for whatever reason doesn't counter the investment in growing production capacity to meet the growing demand. It may even be an opportunity to buy SML while the buying is good, and hold for the long game.

Intriguing. Days like this I enjoy as I learn how fickle the market is and how effective patience can be.

I enjoyed your analysis baa baa. I'm not sure where this one is going, I appreciate the concerns posters have made regarding management and lack of announcement regarding a2 pricing adjustment, but I felt the market over reacted today so purchased more at $9.36.

I feel positive about pokeno because of the significant increase in production it will bring and their diversification into the liquid milk market down south. I feel the green wash is just fashionably corporate responsibility, not necessarily bad but also not particularly important and should not be held up as a trophy when things aren't going well financially.

The CEO commented in an interview that seasonality played a role and that he didn't think today's result was far from what they had indicated to market. I don't know exactly what he was referring to. I like many investors was seriously taken by surprise by the missing 4-8 million from npat that we were expecting.

[Ggcc]

Maybe NZ has oversold. Oz closed at AUD$9.62 or NZ$9.97
I agree as I mentioned earlier. It is still a great company with a great future. Maybe not as great as A2, but great none the less. I am still holding for now.

[minimoke]

I feel the green wash is just fashionably corporate responsibility, not necessarily bad but also not particularly important and should not be held up as a trophy when things aren't going well financially.

.It is bad - there is no doubt about that.

Every manufacturer knows that every single step they take needs to be a step that adds value to the manufacturing process chain. Unless going green achieves some cost saving or increase in revenue there is absolutely no reason for it. By stopping burning coal they risk significantly increasing energy costs and will not do one single teeny smidge to improve teh "global warming" disaster. Ask them - how many parts per billion of CO2 difference will their plan make to the atmosphere - I bet they dont answer.

In the meantime every minute they spend pondering global warming or implementing diversity is a minute they are not focusing on improving manufacturing efficiencies.

[freddagg]

No, its clearly a symbiotic relationship and they need each other just as much. One can only assume the stake ATM has in SML gave them a competitive advantage in negotiations or was it that the board of SML are simply weak ? No, please don't encourage him, he doesn't need it.
The new CEO comes from Fonterror...probably just a very ordinary player is a terribly company. I am sorry but I think the board have called his appointment wrong.
He wasted no time whatsoever climbing right onto the very top of the diversity and cultural sensitivity bandwagon as soon as he was appointed as though this was his top priority and the most urgent area of reform needed.

The clue we overlooked factoring in properly was the culture of where he came from. Some famous person once said "Man is a product of his environment"

I have no doubt that Fonterra can supply ATM with exactly the same product that Synlait do and if Synlait had not accepted the price they did from ATM then Fonterra would have been very happy to supply.
It is always a race to the bottom with processors, I have been watching it for 40 years in the meat industry.

[Raz]

I have no doubt that Fonterra can supply ATM with exactly the same product that Synlait do and if Synlait had not accepted the price they did from ATM then Fonterra would have been very happy to supply.
It is always a race to the bottom with processors, I have been watching it for 40 years in the meat industry.

That is right, one main client and how long is the supply contract for ?

[Leftfield]

That is right, one main client and how long is the supply contract for ?

I understand SML has agreed to supply ATM for 5 yrs.


I have no doubt that Fonterra can supply ATM with exactly the same product that Synlait do and if Synlait had not accepted the price they did from ATM then Fonterra would have been very happy to supply.
It is always a race to the bottom with processors, I have been watching it for 40 years in the meat industry.

I agree, a future supply of A2 IF from Fonterra is very likely, and my guess is that this will be used in other Asian markets such as Sth Korea, Japan and Singapore.... and possibly USA. ( I'm unsure if Fonterra is registered/approved to supply A2 IF in China.)

ATM will be aware that it needs to lessen its longterm IF sales reliance on China (as well as a need to diversify its IF supply)

Also on RNZ morning report this morning, it was reported that a key reason for SML's reported lower margins is that SML was relying on production/sales of its own brand of IF to lift its margins to offset those lower margins negotiated by ATM..... however China is playing hard with SML's registration approvals, and there is a 'delay' which has caught SML out. So no Chinese registration of SML's IF..... yet.

JMHO... DYOR ( I hold no SML)

[winner69]

Those registrations, or lack of them, are a worry

Leon didn’t sound too convincing on the radio this morning about getting them this year

Could be a big drag on earnings

[winner69]

The number of believers deserting the company (or taking their money/profits) yesterday just shows a company can go from hero to zero very quickly.

[BlackPeter]

The number of believers deserting the company (or taking their money/profits) yesterday just shows a company can go from hero to zero very quickly.

Well, I would not be that harsh. They are clearly not at ZERO, and I don't see them getting there. Just a healthy correction by de-hyping ;):

Synlait is a good company and a much better milkprocessor than their big competitor Fonterror, and even they do have a value above Zero. I think Synlaits focus on high value products (like A2 milk formula and lactoferrin) might help, though there is obviously something to say about the benefits (but as well cost) of diversification.

They are currently (at $9.75) on a (3 year) forward PE of 17.8. Might rise somehow after the analysts recalculated their numbers. What would be more realistic? 12.5 - allowing still for some growth - this would put their SP slightly below $7. If I pick a PE of 10 (boring old cyclical agriculture) than it still would be a SP of $5.50;

Again - analysts will review their forecast earnings, which will further depress above numbers, but I don't see them dropping below say $4, which still would be a nice rise from the $3 the company traded for in 2016. Good solid company, just had a hyped up overshoot and changed to a less tested CEO with a funny taste for colours.

Time will tell. Certainly no reason to despair .... the time to buy back in will come, though changing their colour schema (including the person introducing it) might potentially speed up this process ;);

[Enrix]

FNZC target $7.66

[winner69]

For BlackPeter seeing he misunderstood me —


from hero to ZERO - informal used to say that someone goes from being very successful or admired to being very unsuccessful or unpopular



But the good thing in life is you can also go from zero to hero

[BlackPeter]

For BlackPeter seeing he misunderstood me —


from hero to ZERO - informal used to say that someone goes from being very successful or admired to being very unsuccessful or unpopular



But the good thing in life is you can also go from zero to hero

language can be so ambiguous - can it ;);

[sb9]

The number of believers deserting the company (or taking their money/profits) yesterday just shows a company can go from hero to zero very quickly.

Guess the problem is no one expected such a divergence in margins between both companies. In past both companies fortunes intricately linked to each other as when A2 made good money SML also had good margins on their IF sales. It still seem to be the case, but at slightly lower levels than before and that combined with change in products mix sales for FY 19 meant that they took a bigger hit in their profits than normal.

Long term growth story still remains in tact on track for them as per their webcast link below:

https://vimeo.com/325338302/da77d2fc5c

Have watched and listened to that y'day (its about an hour long, make sure you've enough time on hand and some coffee), for me both CEO and CFO presentation were mixed bag. They need to sharpen their presentation skills and also the way they answer analysts questions.

[BlackPeter]

Such a random post. Which post is it in reply to?

Good question. I replied to a question from minimoke, but it appears he removed it.

This is a fast moving forum ... shall remove now my anwer to minis question which will leave everybody wondering about your post :p;

[minimoke]

Such a random post. Which post is it in reply to?Its a reply to me having a blond moment - and subsequently deleting my dimness.

[RupertBear]

Good question. I replied to a question from minimoke, but it appears he removed it.

This is a fast moving forum ... shall remove now my anwer to minis question which will leave everybody wondering about your post :p;

Well done on selling prior to the results BP!

Although not stricktly a SML question, I tried to participate in the pre opening price matching to sell my SML yesterday. I have to say I couldnt figure out what to do and how low to go! :confused: Would be very grateful if someone could expain how it actually works and if there is a useful strategy for buying or selling durng this price matching. Sorry if this is something I should know but I have not tried to participate in this before.

[stoploss]

Well done on selling prior to the results BP!

Although not stricktly a SML question, I tried to participate in the pre opening price matching to sell my SML yesterday. I have to say I couldnt figure out what to do and how low to go! :confused: Would be very grateful if someone could expain how it actually works and if there is a useful strategy for buying or selling durng this price matching. Sorry if this is something I should know but I have not tried to participate in this before.

Basically the system will work out where the most volume can trade and "levels" or matches the price there. So an example
Buyers at 9.00 * 80,000
Buyers at 8.80 * 100,000
Buyers @$ 8.75 * 200,000
Sellers @$ 9.10 * 150,000
Sellers @ $9.00 * 400,000
Seller @ $8.80 200,000 shares.
Match price $ 8.80 for 180,000 shares
Price would be left 8.75-8.80 200,000* 20,000
The buyer at 9.00 has an improved fill.

So basically if you wanted to sell you needed to maybe not join an existing offer, but be lower than the best sell or below one of the buyer prices. This is where depth of market is crucial.
Lots of games in pre open and professionals will go in at the last second with say a sell @ $ 8.60 for 500,000 shares and take out all the buyers leaving you on the sideline ......

Cheers

S/L

[minimoke]

Well done on selling prior to the results BP!

Although not stricktly a SML question, I tried to participate in the pre opening price matching to sell my SML yesterday. I have to say I couldnt figure out what to do and how low to go! :confused: Would be very grateful if someone could expain how it actually works and if there is a useful strategy for buying or selling durng this price matching. Sorry if this is something I should know but I have not tried to participate in this before.

Someone else will explain more succinctly than I can. But heres a picture of today's preopen (cant remember what time). By way of example. Yesterday afternoon I put a sell in at 1000. No one took me up.

So I looked at the ASX close which was equivalent to NZD$9.99. So I went to check the way the opening was going this morning because I never sell in pre-open. There was one bid at 1000 as you can see. Tells me there's a bit of interest at the level I want to sell at. But you can see some people want less than me ($975 and $980) so they get to sell first.

looking at the queue there are a few wanting to buy at 1000 and at 999. So these bids get matched against those wanting to sell at 975 and 980

I want to be at the front of of the queue when I come to sell. So I adjusted my sell to 998 - figuring market will get close to Ozzie close and I'm not going to quibble a cent or two. So now I am 2nd in the queue at 998. I'll keep an eye on the market and if it seems to surge up I'll push back out to 1000 or higher. If I picked it wrong I'll just have to lower my expectations.

I'm happyish to wait until after 12:00 when the ASX opens and see how the ozzies take to the market.

[RupertBear]

Many thanks for the explanations. Think I will leave price matching to others as sounds quite a stressful process

[minimoke]

Many thanks for the explanations. Think I will leave price matching to others as sounds quite a stressful processIt is.
Heres the ASX pre close a minute before open. Puts it about NZD$9.95, but NZX trading at 9.92 - but at 12:00 a sale goes through at NZD$9.95

And as I close this post ASX is on AUD$9.68 which is equivalent to my sell price on the NZX of $9.98. Now I have to give some thought do I push my sell out a bit more.

[minimoke]

That's me all done. I'm all out at $9.98 and $10.03. Ive had a good run but very unhappy with yesterdays results and outlook. Just content now to sit back and let the market do its thing while I ponder where to put the loot next.

[pg0220]

Looks like SML is doing THL to me again!! SP going up after selling out! :lol:

[oldtech]

I got badly burnt by THL; holding off on clicking SELL for SML so I can hopefully avoid the same mistake. :cool:

[Nasi Goreng]

Such a high number of sells from ST’s yesterday, what a twitchy bunch you are.

I’m looking at all the opportunity going forward and the fact that last year from memory, they pre sold some product before end of H1 which bumped up first half profits... perhaps not so bad a picture as has been painted.

[dreamcatcher]

All just BIG BOY GAMES to grab weak hands & pump 'n dumpers LT holders never needed to worry

BELL POTTER reiterated their Target Price A$12.75 BUY rating unchanged

This morning GS upgraded to BUY NZ$11.66

Result all about variations in TIMING in SML's sales volumes resulting from orders from its key customers particularly A2

[nzsharetrade]

why people concerned SML could be replaced by fonterra?
it seems SAMR is very hard to get now.
reducing the margin to help your customer in a bad market is one thing and that normally happens anywhere. is ATM in trouble? Not sure. ATM will be shorted for sure.
NZ is such a small country. working together is the key rather than stab your partner from the back.:D

[minimoke]

why people concerned SML could be replaced by fonterra?
it seems SAMR is very hard to get now.
reducing the margin to help your customer in a bad market is one thing and that normally happens anywhere. is ATM in trouble? Not sure. ATM will be shooted for sure.
At the time ATM was enjoying huge demand for IF in the Chinese sales. No reason why SML should not enjoy the success as well. Anand have pressure put on inventory - stocks now ought to be low not increasing.

Agree companies should work together to maximise each others profit potential. Unless ATM does not see SML as a partner and for some undisclosed reason SML was forced to drop their pants on price.

[winner69]

As a matter of interest what percentage of Synlait sales are to A2

[Beagle]

At the time ATM was enjoying huge demand for IF in the Chinese sales. No reason why SML should not enjoy the success as well. Anand have pressure put on inventory - stocks now ought to be low not increasing.

Agree companies should work together to maximise each others profit potential. Unless ATM does not see SML as a partner and for some undisclosed reason SML was forced to drop their pants on price.

Agreed. The substantial rise in Inventory at Synlait at a time when ATM has been going gangbusters suggests something is wrong here with sales and the extent of the loss of margin is even more shocking in my opinion. If ATM can "milk them" to that extent once you can bet your last dollar they'll come back to milk them again in the future.

[BlackPeter]

As a matter of interest what percentage of Synlait sales are to A2

Percentage of sales is immaterial - and I don't know.

However - (from memory) at last FY 80% of their revenue came from A2 infant formula, and this is obviously all going through A2.

[minimoke]

Might also be worth noting that back in January SML dropped their milk forecast piece 50 cents to $6.25 a kg which was still on top of Fonterras range. But after recent increases in milk prices Fonterra could now be looking at a range from $6.30 - $6.60

[carrom74]

Just touched $10 in ASX... looks oversold...

[winner69]

Percentage of sales is immaterial - and I don't know.

However - (from memory) at last FY 80% of their revenue came from A2 infant formula, and this is obviously all going through A2.

Maybe A2 as a customer not as material as made out. Hope everybody gas screwed Synlait on price.

From Interim -

Revenues of approximately 64% are derived from the top three external customers (31 January 2018: 68%, 31 July 2018: 69%

[Leftfield]

Agreed. The substantial rise in Inventory at Synlait at a time when ATM has been going gangbusters suggests something is wrong here with sales and the extent of the loss of margin is even more shocking in my opinion. If ATM can "milk them" to that extent once you can bet your last dollar they'll come back to milk them again in the future.

Perhaps the stock is/was being held pending Chinese market registration of SML's own label which we understand has been delayed?

Beagle I gather you now out of SML? How did your investment work out?

[minimoke]

Perhaps the stock is/was being held pending Chinese market registration of SML's own label which we understand has been delayed?

Beagle I gather you now out of SML? How did your investment work out?
It is being held for forecast increased sales in H2 ("Finished goods inventories at $188.1m (44,344 MT) have increased significantly from comparative periods (January 2018:$142.7m,35,040 MT; July 2018: $122.6m, 26,726 MT). The increase is primarily due to increased volumes of canned infant formula forecast tobe sold in the second half of FY19, and a strong milk production season which has exceeded expectations."

While I understand this, I am uncomfortable with the holding. Essentially SML is carrying all the inventory risk. ATM (as an example of a customer) does not have to carry the risk of holding inventory which is a great move by ATM.

Also finished goods has a limited shelf life. The burden of a slower future market falls on SML. I would have been looking for more effort put into shifting inventory onto the distribution network.

[Leftfield]

.... Essentially SML is carrying all the inventory risk. ATM (as an example of a customer) does not have to carry the risk of holding inventory which is a great move by ATM.


Thanks MM. I Agree. A couple of years ago BAL-ASX shares plummeted from approx $A13.00 to $4.00 on China inventory concerns, ATM was relatively unscathed and I recall ATM saying they had negotiated a much better/different deal.

[Beagle]

Perhaps the stock is/was being held pending Chinese market registration of SML's own label which we understand has been delayed?

Beagle I gather you now out of SML? How did your investment work out?

Worked out okay mate but I want to shift gears towards stocks that will pay me a regular dividend. $37m is just plain ugly no matter how you slice and dice this and margin compression from the ATM contract they just told us about 8 months after the fact, (disingenuous concealment), will affect profitability going forward.

[winner69]

EBITDA F18 ~$138m and I reckon ~$280m in F21

Doubling EBITDA in next three years is tremendous stuff

Will see share price get to $15 to $20

[peat]

Worked out okay mate but I want to shift gears towards stocks that will pay me a regular dividend. $37m is just plain ugly no matter how you slice and dice this and margin compression from the ATM contract they just told us about 8 months after the fact, (disingenuous concealment), will affect profitability going forward.

yes these are the real concerns aren't they, as well there probably should've been an update prior to the actual announcement which kind of points to a lack of management trustworthiness

I'm pondering exiting...... would be good to break even (average price 10.67 though - will we get there? )
i was very late to this party

[petty]

I’m with you winner, however I share others frustration on this one and think it’ll go sideways until well into F20. Still a lot of uncertainty around China registration for other IF brands and it will be interesting to see how this impacts F19 full year.

[Beagle]

EBITDA F18 ~$138m and I reckon ~$280m in F21

Doubling EBITDA in next three years is tremendous stuff

Will see share price get to $15 to $20

Yeap and Turners are going back to $3.80 any day now...is it too early for a Tui ?

[winner69]

This little spurt a bit higher is just the very start in my opinion and this remains compelling value for a high growth stock. I think we should easily eclipse $15 within 2 years...remember the dog barked it first. Patient pups will be getting a lot of milk.

I shouldn’t be mean to you and repost something from a week ago ... but one not so good half year report and you’ve gone full circle.

Behind the numbers (rather obtuse) most things are on track - selling more stuff and building things to timetable. Agree that profit a bit disappointing but Synlait performance always weighted to second half of year. No real reason to stop believing the story and the bright prospects ahead.

Almost like Oceania - behind the numbers most things are on track - selling more stuff and building things to timetable. Agree that a bit disappointing but Oceania performance always weighted to second half of year. No real reason to stop believing the story and the bright prospects ahead.

Both Synlait and Oceania reports were not so good ....but I remain a patient ‘puss’ ....with both ...and getting plenty of milk, but prefer cream

[Leftfield]

Thanks all for sharing your thoughts on SML.... there is a lot of learning in this one for us all.

Its interesting to reflect on the 'capital light' ethos of ATM and the 'capital heavy' ethos implicit in SML.

Yesterday I re-read parts of "The Zulu Principle' by Jim Slater...... here's what he says "Avoid companies that are capital intensive and are always requiring more money for new machinery.......some companies simply eat cash, whereas others spit it out."

I'm not saying 'avoid SML' and I appreciate this quote is not aimed at SML, however there is some learning here for those with open minds.

GLH.

[minimoke]

Almost like Oceania - behind the numbers most things are on track - selling more stuff and building things to timetable. But the margins doesn't seem to be. No point at all in building plant and selling more stuff if you aren't making money. (With more plant you have to make even more margin to carry the capital costs)

[winner69]

But the margins doesn't seem to be. No point at all in building plant and selling more stuff if you aren't making money. (With more plant you have to make even more margin to carry the capital costs)

Oceania sold 52 more units and made LESS profit in H1 ......no point in building more stuff if you don’t make more money

[winner69]

Thanks all for sharing your thoughts on SML.... there is a lot of learning in this one for us all.

Its interesting to reflect on the 'capital light' ethos of ATM and the 'capital heavy' ethos implicit in SML.

Yesterday I re-read parts of "The Zulu Principle' by Jim Slater...... here's what he says "Avoid companies that are capital intensive and are always requiring more money for new machinery.......some companies simply eat cash, whereas others spit it out."

I'm not saying 'avoid SML' and I appreciate this quote is not aimed at SML, however there is some learning here for those with open minds.

GLH.

Generally good advice from that guy Slater.

That’s why the likes of SML, THL and others should never command high multiples. But then again the likes of FPH are reasonably capital intensive but it’s seem to hinder their share price.

[couta1]

Brutal price reaction...a bit tough I would have thought. Your thought was right as it turns out, always lessons to learn for us all with the market.

[dreamcatcher]

Yeap and Turners are going back to $3.80 any day now...is it too early for a Tui ?

Never to early for a Tui but keep some skin in this one as I am sure you will be better rewarded then Turners

[oldtech]

Your thought was right as it turns out, always lessons to learn for us all with the market.

Seems like you are correct Beagle ... SP dropped from $11.28 on Tuesday to $9.30 on Wednesday, now back up to $10.49.

I am still holding and watching the action very closely before I decide whether to dump my meagre holding. :)

Edit: Not a lot of depth at $10.49 tho ... 2 buyers looking for a grand total of 21 shares!

[winner69]

Appears as if the ‘margin squeeze’ wasn’t as disasterous as the initial reaction from suggested. Some guy on another forum crunched some numbers and reckons that IF GM/Mt is down only 1.25%. Maybe A2 didn’t screw them as much as some made out.

Synlait might be pretty good at prettying up their presentations but I think they could improve a lot in presenting financial data in a more understanding way. Numbers they put in are all over the place and they should preempt what punters see as ‘issues’ and explain these.

[bull....]

if people had studied stock price behaviour from some important past announcements you will have noticed it sells off heavy and then rebounds. played out just like last big sell off.

anyway i still think metrics are rediculous for a manufacturerer

[Beagle]

I shouldn’t be mean to you and repost something from a week ago ... but one not so good half year report and you’ve gone full circle.

Behind the numbers (rather obtuse) most things are on track - selling more stuff and building things to timetable. Agree that profit a bit disappointing but Synlait performance always weighted to second half of year. No real reason to stop believing the story and the bright prospects ahead.

Almost like Oceania - behind the numbers most things are on track - selling more stuff and building things to timetable. Agree that a bit disappointing but Oceania performance always weighted to second half of year. No real reason to stop believing the story and the bright prospects ahead.

Both Synlait and Oceania reports were not so good ....but I remain a patient ‘puss’ ....with both ...and getting plenty of milk, but prefer cream

1. The disingenuous manner in which SML concealed the margin reduction breeched trust with minority shareholders.
2. This has implications for this years profit and in perpetuity going forward and has a major impact on my growth assumptions.
3. I do not accept the margin reduction posted in another forum, it does not look right at all to me.
4. $37m is a very very poor result no matter how you slice and dice it
5. The overt manner in which the new CEO is chasing being politically correct concerns me
6. Synlait performance was strongly weighted to the first half last year
7. Ice cold trading relations with China could potentially see new product approvals on ice for years.
8. Mega capex won't look so shiny if #7 happens.
9. Growth will be lower and a lot slower than previously thought and doesn't take much in the way of lower growth to dramatically change DCF valuations but you already know that...

An AWFUL LOT has changed in a week and not just with Synlait...

[peat]

This week has proved how irrational and strange the market can really be sometimes.

You're wrong with that one mate , its not sometimes - it is always strange and (seemingly) irrational. :p

I'm now down to 10% (of equity portfilio) on this one, taking the opportunity to further reduce this afternoon. Beagle has summed up well, that a lot has changed

[couta1]

if people had studied stock price behaviour from some important past announcements you will have noticed it sells off heavy and then rebounds. played out just like last big sell off.

anyway i still think metrics are rediculous for a manufacturerer If you really wanted to help other forum members you would have put this post up on results morning rather than the pure downramping ones you put up.

[bull....]

If you really wanted to help other forum members you would have put this post up on results morning rather than the pure downramping ones you put up.

yea right i said it was rediculous values for this company and still do. what if i posted what it did and it kept going down people would still moan .... yea never win no matter what lol

[hardt]

1. The disingenuous manner in which SML concealed the margin reduction breeched trust with minority shareholders.
2. This has implications for this years profit and in perpetuity going forward and has a major impact on my growth assumptions.
3. I do not accept the margin reduction posted in another forum, it does not look right at all to me.
4. $37m is a very very poor result no matter how you slice and dice it
5. The overt manner in which the new CEO is chasing being politically correct concerns me
6. Synlait performance was strongly weighted to the first half last year
7. Ice cold trading relations with China could potentially see new product approvals on ice for years.
8. Mega capex won't look so shiny if #7 happens.
9. Growth will be lower and a lot slower than previously thought and doesn't take much in the way of lower growth to dramatically change DCF valuations but you already know that...

An AWFUL LOT has changed in a week and not just with Synlait...

NPAT was 15% higher than 2H18, the marginal pressure was clear to see at FY18 with 74m NPAT following 1H18 of 42m.


1H18 GP per MT 1,400 (up from 800 PCP)
2H18 GP per MT 1,195
1H19 GP per MT 1,164


They had signaled the outlier of 1H18 last year

[nzsharetrade]

NPAT was 15% higher than 2H18, the marginal pressure was clear to see at FY18 with 74m NPAT following 1H18 of 42m.


1H18 GP per MT 1,400 (up from 800 PCP)
2H18 GP per MT 1,195
1H19 GP per MT 1,164


They had signaled the outlier of 1H18 last year

what is GP per MT?

[winner69]

what is GP per MT?

Gross Profit per Metric Ton (Tonne)

[nzsharetrade]

Gross Profit per Metric Ton (Tonne)


Thank you.

[Beagle]

NPAT was 15% higher than 2H18, the marginal pressure was clear to see at FY18 with 74m NPAT following 1H18 of 42m.


1H18 GP per MT 1,400 (up from 800 PCP)
2H18 GP per MT 1,195
1H19 GP per MT 1,164


They had signaled the outlier of 1H18 last year

Margins under pressure for some time now and maga capex on new stainless steel. Suppose shareholders are hoping the Chinese play nice with new approvals...what could possibly go wrong seeing as they're such "responsible fair and reasonable" trade partners and we have such a "warm" trade environment lol
I think John Penno sold shareholders down the river with the new contract with ATM and then left and the new guy is obsessed with politically correct B.S.
I'm completely done punting my financial security on the Chinese playing nice and paying over the top metrics for the privilege but GLTAH.

[nzsharetrade]

Margins under pressure for some time now and maga capex on new stainless steel. Suppose shareholders are hoping the Chinese play nice with new approvals...what could possibly go wrong seeing as they're such "responsible fair and reasonable" trade partners and we have such a "warm" trade environment lol
I think John Penno sold shareholders down the river with the new contract with ATM and then left and the new guy is obsessed with politically correct B.S.
I'm completely done punting my financial security on the Chinese playing nice and paying over the top metrics for the privilege but GLTAH.


have you sold out?

[Beagle]

Yes, sold all my holdings and not looking for a reentry point at any price. A big part of that however is to do with my personal circumstances and I am leaning toward heavily favouring companies that can pay me a decent dividend yield. Happy to mix that up with SUM growth companies with a proven record with a very modest yield provided I have full confidence in their proven business model and track record. This may well still be suitable for people chasing growth but there's growth companies on far more compelling metrics listed on the NZX in my opinion with SUM and OCA being two notable examples.

Other reasons were posted last week.

[nzsharetrade]

fair enough......

[Hectorplains]

Margins under pressure for some time now and maga capex on new stainless steel. Suppose shareholders are hoping the Chinese play nice with new approvals...what could possibly go wrong seeing as they're such "responsible fair and reasonable" trade partners and we have such a "warm" trade environment lol
I think John Penno sold shareholders down the river with the new contract with ATM and then left and the new guy is obsessed with politically correct B.S.
I'm completely done punting my financial security on the Chinese playing nice and paying over the top metrics for the privilege but GLTAH.

Diversification away from reliance on the Chinese market has been down played also. Sod all mention of where Munchkins US launch is at or why US / FDA approval is taking so long. Penno said another four to twelve months in August... We're over seven month mark and an update is warranted.

[Beagle]

Diversification away from reliance on the Chinese market has been down played also. Sod all mention of where Munchkins US launch is at or why US / FDA approval is taking so long. Penno said another four to twelve months in August... We're over seven month mark and an update is warranted.

Yeap I couldn't agree more. All their new approvals have a "on a wing and a prayer" feel about them but meantime they're absolutely flat out gearing themselves to the eyeballs with debt building hundreds of millions of dollars of new stainless steel assuming that all these approvals come through. What could possibly go wrong lol
Chinese are really getting down and dirty with the Canadians now https://www.cbc.ca/news/business/canada-canola-china-1.5067307

[Joshuatree]

Contraywise,my broker upgraded to a buy from $10 to $10.50 on the 20/3 after the price dropped to sub $10. a snippet

"From a manufacturing point of view, management noted on the earnings call that their IFC guidance range does not require GACC approval for the Auckland plant, which, in our view, is interesting as it implies either: (1) an increase in ATM stage 4 mix / Munchkin volume, or (2) they are comfortable producing ATM's stage 1 - 3 product, with the potential it could be re-exported from Australia and into China."

[kiwi_crusader]

Fresh milk starts flowing out of Synlait to Foodstuffs next monday 1/04, around 6 truck loads a day.

[Beagle]

https://www.marketscreener.com/SYNLAIT-MILK-LTD-14391761/consensus/
Average 12 month hence broker target now $10.28. No dividends and with new product consenting risks some would apply a ~ 12% discount to that to get a NPV of $9.05 today.

[minimoke]

Fresh milk starts flowing out of Synlait to Foodstuffs next monday 1/04, around 6 truck loads a day.
My local dairy will still get my business at $3 per two litres!

[Beagle]

My local dairy will still get my business at $3 per two litres!

Same here and hard to beat and can't taste the difference anyway...

[RupertBear]

My local dairy will still get my business at $3 per two litres!

The health conscious Bear tried the trim A2M but didnt like it, too milky for me :rolleyes: :laugh: so I have gone back to my usual trim milk which is much more Bearable :D

[Joshuatree]

Whether its homogenised pasteurised or both is an important detail. Homogenised as i understand it is when the the milk is micro filtered breaking down the fat globules so small that they could "pass straight into ones bloodstream" according to one observer. A subject open to debate.
I buy Sun Latte which is one of the few milks not homogenised.

[Nasi Goreng]

It’s not about the taste, it’s about how you digest it

Some of you found the latest report difficult to digest, imagine if it included a1.

[minimoke]

Electrode boiler fired up on schedule. I wonder what cost of running are compared with coal.

[winner69]

Electrode boiler fired up on schedule. I wonder what cost of running are compared with coal.

You know the answer to that so why ask

[peat]

Maybe I'm just seeing it through the eyes of a Beagle
10423

but Todays announcement further confirms 'eco' focus as opposed to profitability focus.





The carbon equivalent (CO2-e) saving of this electrode boiler - compared to


a coal alternative - is 13,714 tonnes CO2-e/year



AND YET




the operating costs are around double over a ten-year period.

[Beagle]

Can they paint the boiler pink and green so its all good lol

[Joshuatree]

Leading by example and coming on the radar of a fast growing Investment funds Green Equities sectors .Responsible and clever.

[minimoke]

You know the answer to that so why askI know in terms of carbon emissions, but not operating cost. Which is why I asked

[mondograss]

Does this take into account emissions trading costs? If I remember rightly the cost is $25 per 2 tonnes of CO2. And that's likely to get more expensive over the coming years as opposed to cheaper.

[percy]

A good earner for which ever power company that supplies the power for it.
Hope it is either GNE or MEL.

[RTM]

A good earner for which ever power company that supplies the power for it.
Hope it is either GNE or MEL.

Yes…..hope they are not using coal to generate the electricity. That wouldn't be very efficient. :)

[minimoke]

Yes…..hope they are not using coal to generate the electricity. That wouldn't be very efficient. :)SML only partially committed to this green thing. Up north they choose a greenfield site with inadequate electrical infrastructure. So instead up their they will burn gas.

[dreamcatcher]

GS

Positive IMF trends continue from Lyttelton in Feb-19

Consistent with GS view for a stronger 2H in consumer packaged volume for SM1.AX - we forecast a 59% 2H volume skew.

[BlackPeter]

GS

Positive IMF trends continue from Lyttelton in Feb-19

Consistent with GS view for a stronger 2H in consumer packaged volume for SM1.AX - we forecast a 59% 2H volume skew.

Not so sure about the meaningfulness of these Lyttleton numbers. Didn't they predict an amzing 1HY as well? What happened to that?

[minimoke]

Not so sure about the meaningfulness of these Lyttleton numbers. Didn't they predict an amzing 1HY as well? What happened to that?
This post has the volumes and the port was going gangbusters Year on Year but somehow SML didnt seem to profit well

https://www.sharetrader.co.nz/showthread.php?2318-ATM-A2-Corporation-Limited/page846

[allfromacell]

Not so sure about the meaningfulness of these Lyttleton numbers. Didn't they predict an amzing 1HY as well? What happened to that?

The main poster who keeps track of the stats in a nice table predicted they would sell 22750 MT consumer packaged IF in 1H19, the actual number was 17,684 MT so quite a significant miss.

[dreamcatcher]

Not so sure about the meaningfulness of these Lyttleton numbers. Didn't they predict an amzing 1HY as well? What happened to that?

You are correct the miss was suggested because of lower 1H19 consumer packaged finished IF volumes, and lower than expected gross margins in SM1’s powders and creams. However, GS see both of these areas of weakness as resulting from variations in timing in SM1’s sales volumes resulting from orders from its key customers, particularly A2M

Lyttelton numbers are more an indication of overall trends, rather than a proxy for forecasts. However, GS see the overall trend as provided by today’s export data as largely supportive of their forecasts for SM1 and A2M. By export market, the greatest increase was in export volumes to China, which totaled 1.5k MT, +215% vs Jan-19

Probably have a summary of full report somewhere tomorrow.

[Beagle]

You are correct the miss was suggested because of lower 1H19 consumer packaged finished IF volumes, and lower than expected gross margins in SM1’s powders and creams. However, GS see both of these areas of weakness as resulting from variations in timing in SM1’s sales volumes resulting from orders from its key customers, particularly A2M

Lyttelton numbers are more an indication of overall trends, rather than a proxy for forecasts. However, GS see the overall trend as provided by today’s export data as largely supportive of their forecasts for SM1 and A2M. By export market, the greatest increase was in export volumes to China, which totaled 1.5k MT, +215% vs Jan-19

Probably have a summary of full report somewhere tomorrow.

Interestingly we saw significant inventory build at both ATM and SML. I think this undermines the plausibility of anyone saying that 2H sales will be significantly higher than 1H...maybe a little higher if everything works out okay.

[dreamcatcher]

We have no idea of sml or a2 plans and use these port records to gauge some guesses on progress. Major Chinese event dates are 618, 11/11, 12/12 and Chinese NY in Feb or even if they will open new markets for IF. But do know that new factory will be ready mid year increasing production volume.

My understanding of GS 59% 2H volume skew means 1H was 41% ?

Years back I remember three months of manufacturing orders for a March delivery to have large customer phoning to delay delivery till April/May sometimes events are out of your control.

[Leftfield]

Interestingly we saw significant inventory build at both ATM and SML. I think this undermines the plausibility of anyone saying that 2H sales will be significantly higher than 1H...maybe a little higher if everything works out okay.

A picture says a thousand words...... (IF export figs ex Lyttelton.)

10425

DYOR

[minimoke]

A picture says a thousand words...... (IF export figs ex Lyttelton.)

10425

DYORAnd heres another picture that tells a clearer story. Thats they are selling more and making less NPAT

[Beagle]

Yes and then there the $30+m of stock written down to estimated net realisable value, (they are struggling to sell this even at cost) Accounting convention is the lower of cost of net realisable value. I call B.S. on G.S's theory of 41:59% 1H to 2H split based on the significant inventory build both within SML and also ATM. Such a thing does not look plausible.

Here's where the analysts see it with an average 12 month price target of $10.41 https://www.marketscreener.com/SYNLAIT-MILK-LTD-14391761/consensus/

Quite a range of opinion with a high of $12.75 and a low of $7.95 which according to one on here is the well regarded analyst at FCNZ.

[winner69]

G
And heres another picture that tells a clearer story. Thats they are selling more and making less NPAT

Yes selling more and making less .....and that’s probably the reason why the share price of the likes of Oceania is struggling

[Beagle]

G

Yes selling more and making less .....and that’s probably the reason why the share price of the likes of Oceania is struggling

Got to build then and get council sign off before contracts go unconditional. On track but how many sales this financial year is an open question.

[Leftfield]

MM - Beagle's post #2210 refers to BOTH ATM and SML having inventory build issues..... I was merely pointing out that his inventory views might not be correct for ATM.

The IF export figs show a significant increase in Feb 2019. Likely this will benefit ATM more than SML because of the revised margins negotiated by ATM (plus there will also be some benefit to SML)

Today on HC there is also another report out from Citi group saying ATM's Feb IF sales are up over 90% on pp. (not sure where they get their data from.)

(Disc - hold ATM not SML so DYOR.)

[winner69]

Got to build then and get council sign off before contracts go unconditional. On track but how many sales this financial year is an open question.

Not talking about building ...actual reported sales .....sold 52 more units and profit hardly moved

[winner69]

Yes and then there the $30+m of stock written down to estimated net realisable value, (they are struggling to sell this even at cost) Accounting convention is the lower of cost of net realisable value.".....l

Jeez that’s a lot of stock no one wants .........seems like Synlait have a lot in common with Comvita .....building stock and delusional leaders .....wonder what their forecasting is like

[BlackPeter]

Jeez that’s a lot of stock no one wants .........seems like Synlait have a lot in common with Comvita .....building stock and delusional leaders .....wonder what their forecasting is like

Ouch ... you mean SML is close behind Comvita? They cracked the $10 SP at some stage as well and look where they are now ;);

[Beagle]

Ouch ... you mean SML is close behind Comvita? They cracked the $10 SP at some stage as well and look where they are now ;);

LOL that was very funny but I think its fair to say Con vita is in a "class" all of its own...

[minimoke]

..........

[allfromacell]

I must learn to stop smim reading announcements. So the eco friendly boiler will cost double that of coal over a 10 year period. Now I need to delve to see what those actual $costs are

"

"The electrode boiler stood out as the best option, even though the operating


costs are around double over a ten-year period.""





So it's going to take 10 years to achieve that, the cost in the short term must be much worse!

[minimoke]

..........

[44wishlists]

So it's going to take 10 years to achieve that, the cost in the short term must be much worse!

Also from the announcement:
Energy Efficiency and Conservation Authority (ECCA) who supported this project financially through the Technology Demonstration programme.

Further reading in regards to the financial offer if the Technology Demonstration. Don't just read one side of the story. Think and DYOR
https://www.eecabusiness.govt.nz/funding-and-support/technology-demonstration-projects/

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[kiwi_crusader]

10435Foodstuffs are ready, lets hope it boost's those profit results!

[winner69]

Het Minimoke ...read this and you be glad you sold out of Synlait

https://www.rbnz.govt.nz/news/2019/04/nz-leaders-stand-together

What’s more of a concern is the RB is involving itself in non central bank issues

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[kiwico]

What’s more of a concern is the RB is involving itself in non central bank issues

Little different from what RBNZ did when looking at the practice of life insures and their agents, i.e. nothing do with solvency standards or the financial strength of an insurer. I have heard the current RBNZ governor referred to as the "Donald Trump" of reserve bank governors., i.e. everything is done his way not matter what has been done before.

[winner69]

Little different from what RBNZ did when looking at the practice of life insures and their agents, i.e. nothing do with solvency standards or the financial strength of an insurer. I have heard the current RBNZ governor referred to as the "Donald Trump" of reserve bank governors., i.e. everything is done his way not matter what has been done before.

Adrian is bigger than Donald ... he's Tane Mahuta

He's a danger to our country ....peoplewill make up when he needs to agressively raise rates to get out of the mess he's causing

[nzsharetrade]

Is there anyone still holding this pathetic one? SML senior management can not play what ATM management did.

[peat]

Is there anyone still holding this pathetic one? SML senior management can not play what ATM management did.
Being a volatility play I didnt want to bail out completely, so I still hold as 8% of my equity holdings
it is actually in an uptrend again (since Feb)
I agree it has disappointed but medium-long term view still promises growth.

[Beagle]

Good luck Peat. Pretty clear in terms of the ATM-SML relationship who is in the drivers seat.
The new guy's (ex Fonterror and there's some "quality" credentials for you) absolute dedication to all things inclusiveness of the LGBTQ community and all things Environment is very "impressive".
A casual observer could easily be forgiven for thinking these are the two primary objectives of the company...

[sb9]

Synlait, SML/SM1 present at Macquarie conf today.

[pg0220]

Good luck Peat. Pretty clear in terms of the ATM-SML relationship who is in the drivers seat.
The new guy's (ex Fonterror and there's some "quality" credentials for you) absolute dedication to all things inclusiveness of the LGBTQ community and all things Environment is very "impressive".
A casual observer could easily be forgiven for thinking these are the two primary objectives of the company...
ATM's report is dedicated to showing their growth strategy and maximising profitability. SML's report wasn't much different a few years ago when I bought in. Happy to have taken profits from SML and moved to ATM's hands.

[peat]

definitely agree I got this one wrong in considering SML the better of the two to own (well at least in the short term)
I havent been wrong to continue to hold some though, the price has held up pretty well since the drop following the announcement. theres still that ATM takeover bid to hang out for.
havent read their latest presentation yet.

[nzsharetrade]

Well, i guess it depends on individual. ATM is better for trader:D

[Leftfield]

definitely agree I got this one wrong in considering SML the better of the two to own (well at least in the short term)
I havent been wrong to continue to hold some though, the price has held up pretty well since the drop following the announcement. theres still that ATM takeover bid to hang out for. havent read their latest presentation yet.

Maybe you should read ATM's presentation. ATM prides itself with being, "Capital Smart" (page 4) which means if you are holding out for a SML takeover by ATM, you are likely to be disappointed.

Ask yourself where ATM's huge cash hoard would be better invested, and the answer is not buying capital plant which ATM already effectively controls via their strategic shareholding stake. Just saying.

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[peat]

Dont forget it was only last year that ATM spent $161m on SML. Buying shares at $10.9 each - which are today trading at $16.56. Why take over when you can just drive the ride.

You've got something wrong there mate.
But I get your point guys. never mind I am breaking even and thus doing a lot better with this share than with some others :scared:

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[dreamcatcher]

Synlait's new Pokeno factory once completed will produce an extra 45,000 tonnes of infant-grade skim milk, whole milk and infant formula base powders. Total lactoferrin production volume in 2H19 will increase from 7 MT to c.20 MT Management expecting lactoferrin margins to expand in 2H19 as a result of favorable global pricing. Not to mention SML expects to obtain State Administration for Market Regulation (SAMR) registration for New Hope’s Akara and Bright Dairy’s Pure Canterbury brands by the end of 2019.

Happy camper as portfolio showing green suppose that's the difference about glass been 1/2 full or 1/2 empty.

[nzsharetrade]

Synlait's new Pokeno factory once completed will produce an extra 45,000 tonnes of infant-grade skim milk, whole milk and infant formula base powders. Total lactoferrin production volume in 2H19 will increase from 7 MT to c.20 MT Management expecting lactoferrin margins to expand in 2H19 as a result of favorable global pricing. Not to mention SML expects to obtain State Administration for Market Regulation (SAMR) registration for New Hope’s Akara and Bright Dairy’s Pure Canterbury brands by the end of 2019.

Happy camper as portfolio showing green suppose that's the difference about glass been 1/2 full or 1/2 empty.


am with you. we see how it goes.:D

[JoeGrogan]

Synlait's new Pokeno factory once completed will produce an extra 45,000 tonnes of infant-grade skim milk, whole milk and infant formula base powders. Total lactoferrin production volume in 2H19 will increase from 7 MT to c.20 MT Management expecting lactoferrin margins to expand in 2H19 as a result of favorable global pricing. Not to mention SML expects to obtain State Administration for Market Regulation (SAMR) registration for New Hope’s Akara and Bright Dairy’s Pure Canterbury brands by the end of 2019.

Happy camper as portfolio showing green suppose that's the difference about glass been 1/2 full or 1/2 empty.

Agreed, there is a lot of growth here over the coming years, so i don't get why people are saying otherwise...

This A2 vs Synlait dialogue is hilarious.

[limmy]

Just own both stocks... and watch them both rise in time, if you believe in the A2 story.
I've held both since last year and have done alright.

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[JoeGrogan]

They are two very different companies. A2 is essentially a marketing company. Synlait is essentially a low margin volume commodity manufacturer

Exactly, so why is everyone comparing the two. Apart from the obvious fact that they rely on each others success.

As investments they are both growth companies that go about it in different ways.