Originally Posted by
iluab
Margins are also a function of efficiencies, Synlait have also recently constructed a forth dryer which is coming up to full capacity. Net margins at FY reporting were at record highs at 6.3%, who knew aside from well researched investors.
My financial interpretation is that Synlait have become a pretty slick efficient operation during the GDT downturn, and have not been deterred from increasing capacity at a time when the sector has been suppressed, they profitably doubled their value added lactoferrin capacity alone during that time.
On a sector cyclical basis there is not going to be a better time to BUY Synlait in my opinion, if one believes GDT has stabilized or is recovering to mean reversion levels.
Add to that the pending ASX listing which, if nothing else, will have the Aussie investors and insto's determining fair value, analyst consensus is presently $3.74, although I could easily see retail investors taking that into the $4 overvaluation range, just as they did with established earners MHJ and A2M when they listed.
Synlait as a growth co has a forward PE of only 15 on the sleepy NZX, Bega Cheese on the ASX as a cyclical has a forward PE of 25.3.
Boom times ahead for Synlait, mark this post.