Yeah maybe it would have been better to wait until the last minute,unlikely but you never know the price could dip under Three if something dramatic happened
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Is anyone here taking up the offer?
Will be applying for mine next week online, looks very easy to do that way.
In the short term looks like it may trade in the 320-330 range...
I applied earlier in the week. The online process couldn't have been easier
Don't understand why SP not hike. Last year eps 7C, the lowest SP is $2.26, PE was still over 30. This year eps 23C, now PE is under 14! Isn't it largely under-valued?
2017 growth is modest as Synlait doesn't have sufficient capacity to meet rising demand, thus they need to raise capital to build more capacity.
They need more funds which are required for further business development.
These are all OK for a growing company and the Company financial performance has proved they have kept their promise.
How come investors ignore the facts?
I don't think that they are. I invested in this company from day dot, I expect that the sp will move slowly north over the next few months (all things being equal.) The reality is they've got major capex and growth is going to be lower next year; you'd expect the PE to par back from previously. There's no dividend in the foreseeable either - so they haven't benefited from yield chasers.
This is pie in the sky stuff, they seem a decent enough company, but it is no get rich quick scheme. No dividend, still fairly high debt and having to ask US for money instead of THEM giving us any.
Still they should have a decent enough future, I added to holding with the capital raise, but certainly not expecting any spectacular returns. This one is for patient money only
If you expect dividend, you should buy Air NZ, Spark, Fonterra, etc, not Synlait. Synlait is a fast-growing company which is spending more funds to expand business. Interest cover ration is over 4, debt/equity ration is less than 1. Financially quite sound.
I just expect we, as investors, are compensated by SP appreciation. But not happen yet.
Just wait 5 years or so, starts up rarely pay dividends but wait to see what you will get 5 to 10 years from now.
Last day for the retail offer to close, expect the sp to raise steadily after this.
Longtime I agree that SP is likely to rise (at some stage ...). However, it feels currently quite ahead of itself - and given next years results and another likely CR in a couple of years, it won't be a walk in the sunshine.
If you look a the typical pattern for CR's - I'd say it is more likely that over the next couple of months there will be opportunities to buy the share below the cost of the current CR price. There always are people who think to make a quick buck come CR time ... and there are always some of them who get afterwards cold feet (or just need to sell for whatever reason).
Interesting Analyst update on 4 traders: Share downgraded to "underperform";
I believe this company will be at some stage a good and solid buy, but we are not there yet ...
Discl: waiting ...
http://www.smh.com.au/business/bega-...24-gs9rbc.html
Behind weakess?
Expect so, creates an uber bargain for those anticipating a re-rating when SML joins the ASX before xmas. Forward PE is presently 12 or so and analysts have just revalued SML up to $3.74. I think we could see a bit of multiple expansion on the ASX also as the aussie insto's buy in, say up to 15.
http://www.4-traders.com/SYNLAIT-MIL...761/consensus/
I think we could even see a pop when they announce the ASX listing date, that must be soon given a pre-xmas launch, and they will want to launch on the ASX prior to the November agm so as to have something to brag about on the day I reckon.
LOL - this price target of $3.74 is coupled with a recommendation of "underperform".
Now - I don't know whether the analysts are right with their "underperform" rating or with their price target, but they can't have it both, can they? Probably just a typo ... they really meant $2.74:p;
What I do know however is, that it is a myth to expect an ASX listing to automatically push the SP up. Yes, there are some (few) examples where it did, but it can do less pleasant things to your SP as well. If you want to know more about that - have a look at PPH or (just happening) TIL. Both downtrends are inspirational and can be highly educational (for whoever wants to learn).
Discl: not holding;
I wouldn’t underestimate the demand from A2M retail investors alone, Synlait are quite well known already on the aussie market as a quality production co and there will be insto and retail anticipation already brewing because of that. We are not talking about scented candles or spec tech co's here.
I see it more of an MHI type compliance listing, lot’s of pent anticipation for an established co, and a pop to full value perhaps over valuation as the market takes it up.
Time will tell, I’m buying at these levels, for the long term, perhaps with an ASX kick start.
Given Synlait were growing WMP, AMF and Lactoferrin production capacity during the downturn, this can only and positively to FY17 earnings guidance.
http://www.scoop.co.nz/stories/BU161...wder-soars.htm
Attachment 8421
Not really. Synlaits business is basically "clipping the ticket". They don't make money from selling milk, but they get paid for processing milk, whatever the milk price.
Obviously - they only can exist if farmers get enough money to keep supplying them (i.e. there is some value for them in a sustainable milk price), but other than that (and potentially a mood change re dairy industry) would a lower milk price even be good for them (increasing demand and with that throughput).
I think you will find if you actually read the annual reports that Synlait margins increase significantly with GDT, not calling you out, just saying.
In 2013 at the GDT peak gross margins were 27%, they droped to 12% at the GDT lows and are now on the rise again as GDT recovers, presently circa 20%.
Didn't check your numbers, but if they are correct, than this is probably more a reflection on high demand for processing milk powder than on high milk prices.
Obviously - there is some correlation, but the margins for producers (farmers) and processors (Synlait or Fonterra) are not 1-to-1 connected.
Sure - if there is an oversupply of milk AND processing capacity, margins will go down for farmers and processors.
The opposite is true if both supply and processing capacity is short (margins for both will go up).
However - if milk prices go up (due to a shortage of supply) than there is no reason for processing margins to go up (as long as there is sufficient processing capacity).
As well - if milk demand increases but there is plenty of supply (remember all these US farmers currently spilling their milk) but processing capacity is short, milk will stay low but processing margins will go up.
Synlait is for milk what a refinery (e.g. NZR) is for oil ... high petrol prices don't necessarily mean high refinery profits and vice versa.
And if you don't trust me ... John Penno confirmed various times that Synlait's profits are correlated with the processed volume, not with the price of milk paid to farmers ...
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.
I assume you hold and want to get others to push the SP up - right? Remember - dairy is very cyclical - and what goes up will come down.
I do agree that SML is a good company, though last time I visited them (last AGM) they still had some problems with their production line. I don't know whether their SP has now bottomed out (though the trend line does not really look that way - nice down trend, isn't it?). Typically (but not always) after CR's goes the SP below the issue price - and I think it will do this here as well.
Anyway - I do know that they will need more money than they raised this time (and 2018 might be a good time for that), i.e. whatever you are buying at the moment is just a "right" to put in more money next time.
Still - for the impatient investor it might be a good time to buy in when the current bottom is confirmed (i.e. not yet).
For the more patient a good time might be after the next CR (to fund their second site).
Whatever the respective investor profile - I don't think there is any rush. Just sit back, enjoy the action and watch the SP dropping - and (if you are an inpatient investor) buy in when you notice the trend to change.
Discl: not holding - and enjoying the show ;)
I think you may find with some research that the $300m for the next expansion is roughly allocated to one third equity, one third debt (which has been reducing) and one third from forward earnings. So, NO, it's unlikely we will see another capital raising within the next couple of years, thats done now.
Agree the NZX will take the shareprice to the CR at $3 on low local day trader volume as it does, the next catylst will correct that, and we are due for an ASX announcement and earnings guidance next month which I'm expecting to suprise to the upside.
I'm not interested in trying to time low volume bottoms, waste of ones time really, anytime about here for an entry is optimal from a long term growth or value investors perspective.
Miss out if you wish, or be in, it really matters not to me, but the upside potential on a balanced risk reward basis is pretty damn good right now for those that do.
Just remind me:
Where have we heard before that the ASX entry will change everything? Right: TIL, PPH, ....
Why do you expect earnings to be above expectations?
Anyway - all the best with your investment ... and who knows, if it is appropriately priced I might join in ;)
I Agree: Running the models and overlaying with extrapolations for international conditions, I see more slippery slopes to come...
The "Trump" factor will also come into play (neither of the candidates is "trade-friendly", one is openly hostile towards the concept). and they are in-house for 4 years... but that's just one factor in the game
caution, observation and patience...
Good luck to you if you wish to compare candles and doggy tech stocks with well established going concerns like Synlait. But, to answer your question the closest recent analogy was the MHJ compliance listing.
Just like SML, a long awaited established business coming to the ASX which has a long history of valuing such stocks more fairly than the NZX. MHJ was up 80% a few months after the listing on very little fundamental change, granted well into over valued territory by then, but great for those investors who had the foresight.
Clearly you are determined to run Synlait down, keep trying, and I'll keep debunking.
Synlait are due within the next few days to issue a listing prospectus to the ASX which should include revenue guidance, and I just wonder if we will see it exceed present analyst expectations at $663m due to;
1. ATM's presentation yesterday, given that previous guidance from Synlait was for only 12.5% infant formula production growth: ATM reported on track Q1 revenues and stated "continued and consistent growth" in consumer demand for its A2 Platinum infant formula, despite research reports suggesting demand would be volatile.
2. The recent uptick in WMP prices per plot below, Synlait will need to treat that uptick conservatively, but even so an uptrend is an uptrend and must be taken into account one would expect..
Attachment 8440
Yet another tick up in whole milk prices, can only be a good thing ahead of an SML guidance release, the agm is on the 29th I think, can anyone confirm ?
Attachment 8451
http://www.stuff.co.nz/business/farm...t-formula-game
Interesting analysis of where a few challenges might lie ahead for SML, the possibility of a 'one line' requirement from China is not one I'd heard much about previously.
Less than two weeks to the agm !
I’m just getting that niggly investors gut feel, you know, that Synlait are going to increase the infant formula growth guidance back upward big time at this agm and knock some socks off,
ATM are reporting no sales impact of the Chinese regulations at the border, their quarterly revenues are up, and they may actually see no disruption at all assuming they ultimately receive CFDA approval.
The a2 milk company had this to say last week;
https://www.nzx.com/files/attachments/247651.pdf
“Revenue for first 3 months consistent with Company expectations at NZ$112.5 million, reflecting continued growth in infant formula and milk products”
“Continued and consistent growth in consumer demand for a2 Platinum® infant formula, in contrast to expectations of volatility in certain research reports”
ATM outperforming market expectations on NPAT due to infant formula sales for the first four months of FY17.
That can only bode well for SML, and I reckon will put some upward pressure on SML guidance due next week !!!
Hmm ... one of the more optimistic "Death-Crosses" I remember. Still - from a technical perspective this still could go further downwards (wouldn't it be nice ... my order is not yet completely filled :sleep:).
Attachment 8487
charts courtesy to yahoo ...
Seriously, you shouldn't consider even trying to use technical's when there are overriding fundamental matters in play, esp a CR and associated dilution which your chart can't reflect unless you first adjust the core chart data.
Analyst consensus targets are for around NZ$3.74, I would not be surprised to see those increased after Tuesday given the fundamental outlook, and equally I wouldn't be surprised to see ASX insto's take us there over the coming weeks.
The agm is Tuesday, the outlook delivered for SML:NZX or SM1:ASX now will be really very interesting I reckon.
Nice, we're in capable hands, big things ahead for Synlait I reckon,
https://www.nzx.com/files/attachments/249418.pdf
http://i7.photobucket.com/albums/y26...sleeping-s.jpg
Best Wishes
Paper Tiger
HY results are out: https://www.nzx.com/files/attachments/255622.pdf
Costs up, margins down and the much hyped up lactoferrin just managed to break even for the HY after writing losses in the last half.
Debts now at a somewhat more reasonable level ... that's what capital rises tend to do ...
On the other hand - they actually did set a base for growth - and the outlook looks overall positive.
A more open China market and ATM's success should help.
Still would think that markets feel somewhat disappointed ... might bring opportunities to buy later in the week (or next week / next month) at a more reasonable price into this company.
After the hyped article in the NBR yesterday predicting a robust profit improvement off the back of A2 and a full year guidance upgrade - this is kinda disappointing.
Looks like the market liked the leadership team update as they prepare for 'rapid growth'
big jump today from $3.48 to $3.80
SML to have a $5 handle in the next 12 months? $10 share in 5 years?
Very possible. Within a whisker of $4 now
Couple of positive announcements
https://www.nzx.com/companies/SML/announcements/301861
https://www.nzx.com/companies/SML/announcements/301863
Well, yes - though milk price has no direct impact on SML's profitability - it is obviously desirable if enough money goes to the farmers to keep them in line and happy.
Second site in Mangere: Obviously we first need to see the financials, but I guess it is good they go for a second site and (from a local perspective) it is good this site is in NZ - they talked at some stage as well about an Ossie alternative.
Discl: holding (a XS sized parcel)
This will give the farmer's something to grumble about ...."Synlait Milk has lowered its forecast price for the 2016-17 season to $6.15 per kilogram of milksolids because of what it calls a "significant" drop in the dairy market."
http://www.stuff.co.nz/business/farm...-market-prices
I have a funny feeling we are gonna smoke through that $4.60 lot
The order must a got pulled while I was writing the previous msg
Mmmmm not quite the "best growth stock on the board." The attached screen pic compares ATM to SML. Guess which is the lower (red) line?
Attachment 9055
You can't argue with that chart lol. But things are certainly going well for SML. It must be one of the top 5 growth stocks on NZX and certainly one of the least talked about on here. I see it being $10 in 4 years and maybe a dividend payer by then unless they keep growing in which case, all good.
https://nzx.com/regulators/NZXO/announcements/306610
Well rewarded with an entry into NZX 50 and Midcap Index for this quiet and unassuming performer, well done Synlait.
No wonder market likes the announcement...
No comments here,surprising after a good anointment and good SP rise . There have been some mentions on ATM posts..... Is the SP getting ahead of itself? Whats your take on the EPS now ? It has had a good year, and now 40% ish higher that its jan 2014 peak. $6 by christmas ?
That was crafty and very good spotting
Good company, but looks like the SP got ahead of its value. Today so far 30 cents down. Who wants to catch the falling knife?
Synlait delivering on growth strategy and reports $38.2m
8:30am, 19 Sep 2017
Synlait (NZX: SML; ASX: SM1) has reported their strongest performance yet with a net profit after tax of $38.2 million, double digit growth in profit margins and revenue increasing 39% to $759 million.
“Our shareholders supported this growth focus in September 2016 when we successfully raised $97.6 million to invest in our business,” said Graeme Milne, Chairman.
Mr Milne said Synlait’s current balance sheet is in a very good position with net debt down from $214 million to $83 million, and along with retained earnings, the company is in a good position to fund its growth strategy.
My Question is....
Revenue 759 mill
Debt 83 mill - what did they pay the 131 million of debt off with (the capital raise of 97 million + earnings or did they pay it off with more earnings and invest the majority of the 97 million in another drying tower???)
Not sure what the point is to discuss what money they used for repaying debts and what money for new acquisitions?
Sounds as sensible as discussing which of the $20 notes in your wallet you used to pay the butcher and which to pay the baker ...
Fact is that their debt did reduce drastically (which is good) and they still did spend money for new acquisitions. I suppose this new factory in Auckland was not for free?
Well done Synlait - even if I feel that the SP is currently a bit frothy ... but you can't blame Synlait for that ...
I also run a business. A good money manager knows where his/her money is going....
That's not the point. Just read SML's report and you know that they know where their money is going.
The question was "Revenue 759 mill
Debt 83 mill - what did they pay the 131 million of debt off with (the capital raise of 97 million + earnings or did they pay it off with more earnings and invest the majority of the 97 million in another drying tower???)"
My point is that it is completely immaterial whether they used the money from the CR for repaying debts or a new acquisition. They did both. How would anybody distinguish which money they used for which purpose - and why would this be relevant?
After being an idiot and cutting my holding in half at $6... I topped up again this morning.
Forward PE of 20* seems more than reasonable given the industry and how it is expected to move over the next 5-10 years.
I am continuing to buy while it remains under $8
Should do well from a declining dollar. Not sure I would be a buyer at these prices, but a very happy long term holder.
For what it is worth: NTA $2.16; Analyst consensus $5.80; Value based on Graham's formula: $12.58; value based on 10 forward PE: $3.50; SP $7,96;
I guess this indicates that the analysts don't believe that they can stick with their roughly 15% CAGR - or that they factor in a risk premium. I guess the A2 story could either end at some stage, or alternatively it could take over the world. Interestingly - both options would be bad for SML. Option 1 would mean nobody wants their top line product anymore and option 2 would mean that there are lots of competitors selling the same stuff.
Very difficult to define a fair price for such a company without having a flawless crystal ball. Personally I think they are at the moment a bit too hyped up considering the potential risks, but then - if everything goes to plan they are still undervalued.
Discl: still hold some, but sold most of them. Might have been the wrong decision - or maybe not.
A nice 3.5% gain today :)
Ehmmm...anyone top up at this level...AGM in 4 weeks..just missed out $7.75
A2 milk powder selling like a hot cake...go SML!!!
https://www.3aw.com.au/the-audit-on-...re-a-shortage/
All good news, and forward statements very encouraging, like the bit about growing at pace. Population growth in
markets should keep tailwinds moving in the right direction.
Time for a bump. I'm late joining this particular party but bought in today. Looking forward to positive attention going off ATM and back onto SML later in the week / next weeks as AGM nears.
Edit. And while I have your attention, whats with all these volume parcels of 1 - 10 shares going through at 12:49 12:50. Rats and mice 5 - 10 below other trades?
Probably bot trading minimoke. I have been buying too. Took a punt and bought up a few last week at just under $7 and a few more this week prior to the ATM annual meeting.
I have had something similar buying a share on the ASX, parcel of 17, 4, 23 then a couple of larger parcels to make up my order, all at the same price as well. Can't be a private seller selling with 4 or 17 etc.
Hey minimoke. What do you mean it shifts them down the list. Where are you getting info on the trading parcels for the day?
Attachment 9288On my ANZ Securites account / web site you go to the security eg SML. Then go to Depth.
Each time one of those epesky nuisances joins the list at the top a trade falls off the bottom
No excitement in price ahead of tomorrows meeting
https://www.nzx.com/announcements/311126
"Synlait Milk (NZX: SML; ASX: SM1) today announced that long-time Chief Executive Officer and founder John Penno intends to step down from his position in the next 12 months, as part of an orderly transition to position Synlait for its next phase of growth.
After 17 years of living and breathing this company, it is time to move on, but I share the Board’s intention for me to continue as a Director of Synlait Milk,” said Mr Penno."
30-35kMT forcast for 2018.Onwards and upwards
Wheres the release of the ASM and how to you dial in? Very annoying
Nasi is excited about all this growth :t_up:
Thanks for the PDF. I wonder why they set up in Auckland ? It’s a pity really, regions need companies like this, Auckland needs more like a hole in the head. Can’t imagine facilty costs are cheaper there? Possible reasons...
Access to staff, particularly technical folk ?
Close to Airport for airfreight ?
Close to Auckland Port - sea freight.?
Handy for overseas customers who might need to audit ?
A little strange I thought.
It is also on the airport campus just FYI.
Good growth. What's with the share price reaction?