SML - Synlait Milk Ltd

[FarmerHamilton]

Appears to be drifting lower from a high of $2.75. Buyers at 2.64 and sellers at 2.67.

Will be interesting to see where it ends up at the end of the day.


HAPPY CAMPER HERE !! I have sold 75,000 this morning at ave. $2.6825. Wow , what a great IPO.

Still have over $1/2m in SML and Synlait farms , probably sell a few more over coming weeks but probably done for the day now.

[whatsup]

HAPPY CAMPER HERE !! I have sold 75,000 this morning at ave. $2.6825. Wow , what a great IPO.

Still have over $1/2m in SML and Synlait farms , probably sell a few more over coming weeks but probably done for the day now.


Good on you risk reward at its best.

[GRIFFIN]

Well done FarmerHamilton got to be a new John Deere on the horizon with that sale and just wait till the Lactoferrin gets ramped up. bugger me it makes ya dizzy just thinking about it.

[FarmerHamilton]

Well done FarmerHamilton got to be a new John Deere on the horizon with that sale and just wait till the Lactoferrin gets ramped up. bugger me it makes ya dizzy just thinking about it.

Cheers boys , a few Speights will be sunk this evening no doubt . If you are new holders I hope you all do really well, I will be still along side you but just felt the need to take a few chips off the table today.

[CJ]

Appears to be drifting lower from a high of $2.75. Buyers at 2.64 and sellers at 2.67.I stand corrected. Lunch time and all the M&D decided they better get in before it is too late.

[percy]

Cheers boys , a few Speights will be sunk this evening no doubt . If you are new holders I hope you all do really well, I will be still along side you but just felt the need to take a few chips off the table today.

Well done and enjoy your beers.

[ratkin]

The milk bubble is alive and well.
If al quaida ever want to attack NZ all they need to do is infect a cow with foot and mouth disease
and the country will be on its knees

[percy]

The milk bubble is alive and well.
If al quaida ever want to attack NZ all they need to do is infect a cow with foot and mouth disease
and the country will be on its knees

That threat has/is very real.
Does not have to be Al Quadia.
Can be any silly fool.

[troyvdh]

ratkin...can only agree with you...whats more recent news about our border controls ...makes it worse,...no one likes negative flavoured news/input....I have never made a financial decision ...where if it all went wrong....I would loose everything.....dairy farming....gee...Im not sure what to say.....anyways cheers...,.

[FarmerHamilton]

Ditto ... Down goes the average price and up goes the yield ... :)

Agreed Belg.

My final tot up today stands as ...

Initial investment Oct 2003 ... $400,000
Additional investment on farm merger : Mid 2006 : $25,000

Sales receipts from Farms & Milk since Unlisted listing and todays IPO. $927,550

Remaining holding in both valued this evening ( $1.35 & $2.74 ) - $517,500.

Pass me another cold one!!

[FarmerHamilton]

10 out of 10 to everyone involved in this IPO, looks like it was a "model" transaction ( although selling into the IPO as a founding shareholder $2.40 would have been nice !! ... not complaining )

Shares in Canterbury-based milk processor Synlait Milk ended their first day of trading on the NZX at a 54c, or 24.5 per cent, premium to their $2.20 issue price, reflecting strong investor demand and a limited supply of stock.
Synlait Milk shares debuted at $2.62 and went on to trade in a $2.61 to $2.90 range before closing at $2.74.
The initial public offer attracted strong support from institutions in New Zealand, Australia, Singapore and Hong Kong and New Zealand retail investors.
China's Bright Dairy will remain Synlait Milk's cornerstone shareholder, with a 39.1 per cent holding, down from 51 per cent before the offer. Japan's Mitsui has an 8.4 per cent stake.
The company's chief executive, John Penno, said the successful initial public offer and sharemarket float was "an endorsement of where we have got to and where we are going".
Holland's Royal FrieslandCampina surprised the market by picking up a 7.5 per cent stake during the book-building phase early this month, which may have added to the stock's attraction.

"Having Royal FrieslandCampina on the register is impressive support, so some people seem to be taking heart from that," said Shane Solly, portfolio manager at Mint Asset Management. FrieslandCampina, with Bright Dairy, would represent a powerful investor base, he said.
The offer was priced at the lower end of an indicative $2.05 to $2.65 price range but Penno told a news conference the company was more focused on getting a good share register together, rather than pricing.

[FarmerHamilton]

The IPO process added 2296 new shareholders to Synlait Milk's share register. The offer, which also allowed existing Synlait Milk shareholders to sell into it, resulted in gross proceeds of $114 million.

So about 2400 shareholders plus/minus the buyers and sellers yesterday , 5.8m shares traded yesterday which is pretty active .

[FarmerHamilton]

Just dribbled a few more out at $2.89 .... at these levels I am a happy seller as valuation starts looking a little ( a lot really ) stretched. This is now trading almost 10% above the top end of the IPO valuation range of 205-265 ...

Still have $300k worth though and still a ridiculously high weighting in my share portfolio !! Not very diversified ... yet

[Dej]

Was at the Milford opening of their new building last night and they had nothing but good things to say about the soft product market in New Zealand. Given there track record, this bodes well for Synlait and others (such as ATM).

[1leon]

Just dribbled a few more out at $2.89 .... at these levels I am a happy seller as valuation starts looking a little ( a lot really ) stretched. This is now trading almost 10% above the top end of the IPO valuation range of 205-265 ...

Still have $300k worth though and still a ridiculously high weighting in my share portfolio !! Not very diversified ... yet
Nice to be a happy seller! Given also forecast no immediate dividend and latest comment that the success sets Synlait up for further capital raising there must be more deep pocket investors out there than I might have expected.Bright must also be thrilled.

[percy]

The market cap of SML is now $405.37 mil while the market cap of ATM is $427.46 mil.
Not a lot of difference between the two.
I look forward to comparing the two in a year's time.

[Joshuatree]

It will be int Percy.We are in the white gold zone, so much less craziness then my Au stocks. Was considering stagging but intend to hold a while now.

[percy]

It will be int Percy.We are in the white gold zone, so much less craziness then my Au stocks. Was considering stagging but intend to hold a while now.

I added to my holding at $2.62. Should they drop down to that level I will add to my wife's holding.
I have been very impressed with what they have achieved is a very short time,so was not interested in stagging.I often drive past the factory and it has been interesting seeing it being built,then added to.Also see a lot of their tankers on the roads.
Now I look forward to attending their shareholder meetings.

[MPC]

Fire at factory. Awaiting updates...

[NZSilver]

http://i.stuff.co.nz/the-press/news/canterbury/8974357/Fire-at-Synlait-milk-powder-factory

[1leon]

Fire at factory. Awaiting updates...
A quick google shows there was previously a small fire there in December.

[ScottyNZ]

http://nz.news.yahoo.com/a/-/top-stories/18190416/minor-fire-at-synlait-milk-dunsandel-plant/

[CJ]

http://nz.news.yahoo.com/a/-/top-stories/18190416/minor-fire-at-synlait-milk-dunsandel-plant/In unrelated news, Synlait launches smoked cheese.

[percy]

In unrelated news, Synlait launches smoked cheese.

Love it.Great post.! lol

[goldfish]

Glad it turned out to be contained quickly and lucky it wasnt in the dryer those things are like a bomb.

[Joshuatree]

"Winner of "Tour De Trance believes snorting infant formula milk powder gave him the edge".

[baller18]

Knew Synlait will go down after the first 3 days...
Opportunity awaits...

[whatsup]

Drop again this morning. $2.62 , .02 above first listing, good demant at $2.50 but will it test this level?

[percy]

Just under 100,000 wanted at $2.60,and just under 20,000 above that.
I am on "RED" alert.

[RTM]

Hi Percy...what difference does 2-3 cents really mean ? If you want them....get em now !
All the best
RTM
PS You talked me into some Heartland....thanks !

[percy]

Hi Percy...what difference does 2-3 cents really mean ? If you want them....get em now !
All the best
RTM
PS You talked me into some Heartland....thanks !

No difference really. Thanks.!
Glad you are happy with your HNZ.Hang onto them,as the coming year will be good.

[percy]

Been trying to buy,then add to a 16cent share in Aussie,so forgot to watch SML.
Placed an order about 15 minutes ago at $2.62,and looks as though I have added to the wife's holding at $2.61.Maybe I got lucky?!
Received contract note $2.61.!!!

[Snoopy]

Been trying to buy,then add to a 16cent share in Aussie,so forgot to watch SML.
Placed an order about 15 minutes ago at $2.62,and looks as though I have added to the wife's holding at $2.61.Maybe I got lucky?!

Not really 'lucky' buying into SML today. The big rise Fonterra payout announced today should be quite negative for SML over the short to medium term I would have thought. A big rise in the underlying ingredient cost! It could really crimp SMLs medium term growth plans too as more farmers opt to stay with Fonterra.

SNOOPY

[baller18]

Yeh, and it looks like it could go down more..
But doesn't make a difference for people holding long term

[percy]

Yeh, and it looks like it could go down more..
But doesn't make a difference for people holding long term

Share prices go up and down,yet well run companies over time seem to rise.I think we will see SML is a very well run company.
With more diary farmers opting out of having to tie up a lot of capital buying supply shares in Fonterra,there are a number of diary farmers such as REL selling their Fonterra shares [for big money] and supplying SML.Makes sense.

[Xerof]

Placed an order about 15 minutes ago at $2.62,and looks as though I have added to the wife's holding at $2.61.Maybe I got lucky?!

thats the beauty of the closing auction Percy

Snoopdog, I took the same view on the Fonterra ann

discl: stagged my small allocation on day two, but will be back in at some point

[percy]

Not really 'lucky' buying into SML today. The big rise Fronterra payout announced today should be quite negative for SML over the short to medium term I would have thought. A big rise in the underlying ingredient cost! It could really crimp SMLs medium term growth plans too as more farmers opt to stay with Fronterra.

SNOOPY

I think one needs to look at why Fonterra have increased their payout.
I take it is because demand is greater than supply.
It is therefore positive for the whole dairy industry.

[nextbigthing]

From reading the prospectus it seemed they were confident growth in sale price was going to far out way growth in input price, making this Fonterra announcement a little concerning.

[Snoopy]

I think one needs to look at why Fonterra have increased their payout.
I take it is because demand is greater than supply.
It is therefore positive for the whole dairy industry.


While I have some sympathy with Percy's argument, and I think Farmer Hamilton has posted something similar, it is the details around the edges that concern me. The year just gone saw Fonterra dairy farmers paid out $6.20/kg for their milk solids. This year the forecast total payout is now forecast at $7.80/kg. That is a 25% increase in a single year. I would be much happier if I saw smaller more sustainable increases year on year. I understand the reason for the sudden price rise, as the drought that NZ suffered last season seems to have made its way around the globe to Europe and the United States, keeping supply constrained. But my feeling is that a 25% increase is too much for the market to absorb in one year. 25% is enough to drive product substitution.

Once people get used to using substitute products it becomes a hard job to wean them back. A case in point is the Subway sandwich chain. Pre GFC, you used to get four triangles of cheese on a 6" roll. When the price of cheese spiked that got cut back to two, where it remains today. This remains a permanent loss of market for Fonterra. I wonder, could the same thing happen to baby formula this time? If market demands suddenly halves, that could be devastating for Synlait.

SNOOPY

[winner69]

. Once people get used to using substitute products it becomes a hard job to wean them back. A case in point is the Subway sandwich chain. Pre GFC, you used to get four triangles of cheese on a 6" roll. When the price of cheese spiked that got cut back to two, where it remains today. This remains a permanent loss of market for Fonterra. I wonder, could the same thing happen to baby formula this time? If market demands suddenly halves, that could be devastating for Synlait.

And a permanent loss for Subway the thieving bastards

[Snoopy]

And a permanent loss for Subway the thieving bastards


I haven't heard anyone getting that upset over the lost cheese Winner! I should point out that extra cheese (totaling the full four triangles) is still available at Subway. It is just that you have to pay extra for it now.

SNOOPY

[bull....]

blanket ban on milk powder imports to china must affect them big time ?

[NZSilver]

Big drop tomorrow for SML?

[etrader]

At this stage what percentage of their products go to china

Not good timing for what seemed a good float, maybe the Dutch shareholder can supply ingredients

[Baaarney]

At this stage what percentage of their products go to china

I found this under the risks section of the prospectus:
"Focus on Asian Market: In FY2012 approximately half of our sales were based in Asia and one third of sales in China.We are expecting significant growth of Infant Formula
and Nutritional products to China. Changes in those markets (including as a result of recent changes announced in China and described under “Changes to industry in China and new regulations, relating to infant formula” above) and their expected demand for our products could impact on our expected revenues and returns."

and similar statements around the potential for food safety issues to impact on future growth. So i guess not an unexpected issue, but the timing so soon after floating must be a concern for them

[K1W1G0LD]

SYNLAIT MILK LIMITED
ANNOUNCEMENT
5 August 2013
Synlait Milk Infant Formula Products Safe
Synlait Milk has reassured its customers that all products it has manufactured are safe.
This follows the announcement by the Ministry of Primary Industries (MPI) that it is working with Fonterra on a food safety issue with a range of products manufactured from whey protein concentrate.
Synlait Milk has not used any of the whey protein concentrate WPC80 recalled by Fonterra in the manufacture of its nutritional powder products such as infant formula.
Synlait Milk Managing Director John Penno says food safety and product quality is of paramount importance to the Company and it supports the precautionary approach being taken by MPI and the wider industry.
“We expect that this incident will result in some short term disruption to trade and some additional testing requirements for some markets, but we do not expect this event to impact the growth of our infant formula business beyond the immediate disruptions.”

[whatsup]

SYNLAIT MILK LIMITED
ANNOUNCEMENT
5 August 2013
Synlait Milk Infant Formula Products Safe
Synlait Milk has reassured its customers that all products it has manufactured are safe.
This follows the announcement by the Ministry of Primary Industries (MPI) that it is working with Fonterra on a food safety issue with a range of products manufactured from whey protein concentrate.
Synlait Milk has not used any of the whey protein concentrate WPC80 recalled by Fonterra in the manufacture of its nutritional powder products such as infant formula.
Synlait Milk Managing Director John Penno says food safety and product quality is of paramount importance to the Company and it supports the precautionary approach being taken by MPI and the wider industry.
“We expect that this incident will result in some short term disruption to trade and some additional testing requirements for some markets, but we do not expect this event to impact the growth of our infant formula business beyond the immediate disruptions.”

$2.60 not too bad, back to the first days opening price.

[K1W1G0LD]

$2.60 not too bad, back to the first days opening price.

Yes typical market (over)reaction , Synlait are'nt at fault here.............................guilty by association!
cheers Kiwigold

[The BOWMAN]

I actually think this could be an opportunity for Synlait, they must get their PR machine running! This is the opportunity for improving the awareness of its brand, for swinging the mums who use Karicare formula to have a look at the Synlait formula, to get Chinese consumers to know it is not just Fonterra at NZ. The fact that the biggest shareholder of Synlait is Chinese corporation should help.

[zigzag]

I actually think this could be an opportunity for Synlait, they must get their PR machine running! This is the opportunity for improving the awareness of its brand, for swinging the mums who use Karicare formula to have a look at the Synlait formula, to get Chinese consumers to know it is not just Fonterra at NZ. The fact that the biggest shareholder of Synlait is Chinese corporation should help.

Synlait don't have their own consumer brands. They manufacture the ingredients for other companies, such as ATM.

[The BOWMAN]

Synlait don't have their own consumer brands. They manufacture the ingredients for other companies, such as ATM.

Thanks for the info. So Synlait does not have any consumer end products? Who is taking Synlait's milk powders? Are they mostly foreign dairy consumer product makers, whose products won't be impacted by this crisis at all?

[percy]

Well today is the day, that yesterday we worried about,and all is well.!!

[GRIFFIN]

So true percy and there must be a bit of Winston Churchill in that quote.

[percy]

Not sure where the quote came from,but have remembered it.
I thought on Sunday night SML share price could drop below $2.To see it was down only 1 cent reminded me of the quote.

[Xerof]

"Remember, Today is the tomorrow you worried about yesterday" Dale Carnegie

[percy]

"Remember, Today is the tomorrow you worried about yesterday" Dale Carnegie

Thanks Xerof.

[FarmerHamilton]

Thanks Xerof.

Awesome performance from SML since the Fonterra botulism scare ... stock is actual up 7c I think. I thought $2.71 ( may have been $2.74 ) was the closing price on the Friday afternoon before the weekend Fonterra announcement , SML dropped to $2.60 the next morning but ever since then buyers have been pushing the price back up. Really impressive.

Disc: hold 74,875 SML

[percy]

Awesome performance from SML since the Fonterra botulism scare ... stock is actual up 7c I think. I thought $2.71 ( may have been $2.74 ) was the closing price on the Friday afternoon before the weekend Fonterra announcement , SML dropped to $2.60 the next morning but ever since then buyers have been pushing the price back up. Really impressive.

Disc: hold 74,875 SML

Yes very impressed,and some what pleasantly surprised.

[FarmerHamilton]

Yes very impressed,and some what pleasantly surprised.


Another very impressive week & a new record closing high tonight ... 292c , a whopping 72c above the IPO price or 32.7% !!

Stunning performance and with the lack of sellers we may be above $3 this time next week.

Little interest on this blog tells me very few people own SML so who knows how high it could go ...

Disc: hold 74,875 SML

[percy]

Another very impressive week & a new record closing high tonight ... 292c , a whopping 72c above the IPO price or 32.7% !!

Stunning performance and with the lack of sellers we may be above $3 this time next week.

Little interest on this blog tells me very few people own SML so who knows how high it could go ...

Disc: hold 74,875 SML

Stunning.
I saw earlier today it was $2.88,then did not look again.$2.92. Great run!! My average price is $2.30.
I hold considerably less than you.!! lol.

[Joshuatree]

Fab , White Gold guys, Chai, boiling milk witha teabag thrown in, and stirred with a cinnamon stick; Milk-ings. I hold considerably less than both of you combined ;hee.

[K1W1G0LD]

This should be a great long term hold. More exciting (and volatile perhaps) than boring retirement stocks . Liquidity good too.
I'm a happy holder

[lambton]

Small volume!!!!

[FarmerHamilton]

Small volume!!!!

Only small volume 'cos no one wants to sell ... the buyers are queueing up .... NOW NOW No PUSHING PLEASE !!!

[FarmerHamilton]

Oh dear , just as i thought , this is turning into a bit of a bun fight ... 305 bid , best offer 314 , and all sorts of pushing and shoving going on in behind.

"COME ON PEOPLE ... BEHAVE YOURSELVES" !!!


Disc: hold 74,875 SML

[baller18]

Only if I held even 10% of what you have... sighs...

[zigzag]

The indicative price range for the float was 2.05 to 2.65. It has now gone well beyond the top end of the range. The driver does seem to be popularity and demand, rather than any lift in performance of the company. It must be another 2-3 years before the new plant is up and operating. In the meantime, how much higher than the share price go without the extra production that will come on stream with the new drier, etc. I hold so I am very pleased with the performance of the company, and the appreciation of the share price so far.

[nextbigthing]

Only if I held even 10% of what you have... sighs...

Baller,

CNU pay around a 9% fully imputed dividend. The current floating mortgage interest rate is under 6%. There's 3% for free if you can make that work somehow and are willing to risk it with shareprice movements etc. :) :) :)


Disc. Own CNU. Don't bet the farm and don't take this advice :)

[FarmerHamilton]

CNU is down 2.5% today , that's your dividend vs mortgage rate margin gone in an hour. Borrowing money to buy dividend stocks is a VERY risky game. I would not recommend.

[FarmerHamilton]

Baller,

CNU pay around a 9% fully imputed dividend. The current floating mortgage interest rate is under 6%. There's 3% for free if you can make that work somehow and are willing to risk it with shareprice movements etc. :) :) :)


Disc. Own CNU. Don't bet the farm and don't take this advice :)


"There's 3% for free" .... PLEASE IGNORE THIS STATEMENT !!!! THERE IS NO ... I REPEAT NO , FREE LUNCH in the stockmarket.

[nextbigthing]

......
Don't bet the farm and don't take this advice :).....

[nextbigthing]

I REPEAT NO , FREE LUNCH in the stockmarket.

I hear MOA are giving shares away FarmerHamilton ;)

[FarmerHamilton]

I hear MOA are giving shares away FarmerHamilton ;)


That would be handy , get my average price down from the lofty heights of 89c ...

[percy]

Today's announcement that SML will process more milk than forecast has push the SP over $3.12.

[FarmerHamilton]

Today's announcement that SML will process more milk than forecast has push the SP over $3.12.

I shaved another 5k off my holding yesterday ay 308 ... might put some more on at 318-320 . This is getting pretty frothy I think but every extra litre of milk does add to the bottom line so this is obviously good news.

Disc: hold 69,632 SML

[percy]

I shaved another 5k off my holding yesterday ay 308 ... might put some more on at 318-320 . This is getting pretty frothy I think but every extra litre of milk does add to the bottom line so this is obviously good news.

Disc: hold 69,632 SML

I am sitting like a stunned Rabbit caught in the headlights.!!

[percy]

I shall wait for the listing and after the price has inevitably declined after that I shall look at the gross dividend yield and if it compares well with other candidates I shall buy some.

Any other course of action is myopic stupidity.

Posted 15-07-2013,
Yeah WRONG,!

[nextbigthing]

Posted 15-07-2013,
Yeah WRONG,!

Percy,

Where do you see it heading in the next month :)

NBT

[percy]

Percy,

Where do you see it heading in the next month :)

NBT

Wish you had not asked me that!!!!!! Do not know!!!
Yet on Yahoo chart the trend is up,the MACD and Relative Strength are both positive.
So I am staying with the trend which is up.No sell signals that I can see.
Where/when the uptrend will stop I don't know. I brought in with the view that SML would be a good investment over the next 5 to 10 years,so I find it very difficult to judge what is fair value at this point in time.

[FarmerHamilton]

Wish you had not asked me that!!!!!! Do not know!!!
Yet on Yahoo chart the trend is up,the MACD and Relative Strength are both positive.
So I am staying with the trend which is up.No sell signals that I can see.
Where/when the uptrend will stop I don't know. I brought in with the view that SML would be a good investment over the next 5 to 10 years,so I find it very difficult to judge what is fair value at this point in time.

Just offloaded a few more at 319c ... this is an unbelievable run SML shares are having. The stock is now 99c higher than the IPO price of 220c , or a staggering 45%! . Market Cap is now a cool $467m closing in on $1/2B !!

Amazing !!!

Disc: hold 66,962 SML

[nextbigthing]

Just offloaded a few more at 319c ... this is an unbelievable run SML shares are having. The stock is now 99c higher than the IPO price of 220c , or a staggering 45%! . Market Cap is now a cool $467m closing in on $1/2B !!

Amazing !!!

Disc: hold 66,962 SML

Well done FarmerHamilton,

Certainly has been amazing.

This is a great company in a great industry. Do you believe the current price is justified? Do you believe it still has more to go in the near future or do believe it's starting to get a bit silly?

I don't think any one doubts this will be a justifiably $10 company in a few years. The question is how many years and is this still cheap or is the share price getting ahead of itself?

Who knows.

Disc; don't hold. Accepting donations.

[FarmerHamilton]

There were some pretty smart cookies running the numbers on this during the IPO process and RoyalFreisland Campina came in and snatched a 7.5% stake at 220c because they obviously were unwilling to pay up to that price for it ( may have been trying to outsmart the Synlait team and trying to bag a bargain ... OUCH !! Expensive mistake now !! ) Well done RF C !!

At 319c I am very comfortable selling although I do think the company has a great future ( I will keep a decent number ). From 220 to 319 in a couple of weeks is a very rapid rise and the higher payout forecast of $7.80kgMS will keep the pressure on to sell product for top dollar. From a few months ago my Synlait investment is now up over $1.05m over both Milk and Farms so I am just playing with profit but to existing holders or potential new investors at $3.19 I wouldn't be rushing in to buy any / more just yet.

[CJ]

FarmerH - Do you intend to buy back in if the price goes down or is your sell down due to a diversification strategy (albeit accelerated due to the share price)?

If so -whats is your re-entry price

If not -I recommend you invest in the physical product of MOA rather than the shares - a much better investment ;)

[FarmerHamilton]

Hi CJ,

It is a diversification strategy ... we still hold $450,000 in Synlait Milk & Farms after selling $960,000 worth of both over recent weeks. We have reduced our mortgage, have bought shares in the US,UK and Australia and my wife is planning on doing a few spec house builds without the need for bank funding ...

I don't have a re-entry price , I will keep selling if the shares keep rising to maintain our holding at around $400k ( I currently am looking at selling some more Farms shares after the 30% jump in the last few days ).

Only own 4,285 MOA so it is literally a drop in the bucket ( which is full of lovely cold creamy milk ! )

[FarmerHamilton]

Might be selling some more SML today .... 320 bid , offer side looking very thin !!

[FarmerHamilton]

324 ... wow! this is just a monster performer at present

Disc: order in to sell 3087 at 328

[baller18]

wowwwwwww congrats!!!

[FarmerHamilton]

wowwwwwww congrats!!!

Cheers B18 ... we got involved with Synlait in 2003 so it's been 10 years in the making ... but now it has been well worth the patience and the waiting !!

[percy]

Cheers B18 ... we got involved with Synlait in 2003 so it's been 10 years in the making ... but now it has been well worth the patience and the waiting !!

Well I and I am sure all other posters have loved your posts.
A great investment success.
Well done,and thank you for sharing your knowledge with us.

[FarmerHamilton]

Well I and I am sure all other posters have loved your posts.
A great investment success.
Well done,and thank you for sharing your knowledge with us.

Cheers Percy, I always had the belief that investing in the dairy sector back in 2003 when it wasn't easy to get in and didn't have much interest in the general public's investment attention was the way to go. I could see the demand growth coming from Asia , supply issues out of Australia with the water shortages becoming worse and that NZ would be the "Go-To" destination for the world's leading infant nutrition companies looking for quality milk supply.

Synlait was a little different from Fonterra , I knew the management , I knew Canterbury land was relatively cheap compared to the North Island , and that water was plentiful and easy to get ...

The rest is history really ...

[FarmerHamilton]

326 .... when's it gonna stop !!

[The BOWMAN]

326 .... when's it gonna stop !!

FarmerHamilton, this is unlikely to stop anytime soon. ATM is running over 100 PE on the basis of some unfounded theory. It is a bubble in my view but Synlait still has plenty room to go. The demand is super strong. Don't forget China Bright Dairy wants to rebuild their holding to pre-IPO level and hasn't really started their purchasing yet. The market is booming and I assume it is not too hard for Synlait to eat into Fonterra's market shares. From its recent announcement, the constraint is more on its own infrastructure rather than the market. I was not able to get any shares from IPO (ASB Securities is useless in getting any allocation of good IPOs). But purchased on the market pretty much immediately after its listing, now one of the top three holdings in my portfolio. I wish it doesn't rise too fast so I can free up funds and make it my NO 1 holding with a good price.

[CJ]

FarmerHamilton, this is unlikely to stop anytime soon. I do wonder why FarmerH isn't using a stop loss to catch it when it falls rather than selling out while it is still rising.

[K1W1G0LD]

This looks to be the float of the year so far and you don't have to be a genuis to see the demand for shares in the Dairy industry here in Godzone. Enjoy the ride !

[FarmerHamilton]

This looks to be the float of the year so far and you don't have to be a genuis to see the demand for shares in the Dairy industry here in Godzone. Enjoy the ride !

Just sold another 2000 at 333 ... up 9c on the day , a small number left ( 1087 ) and then I am done selling until next September due to the escrow agreements with the old Synlait shareholders written into the IPO.

Amazing run ... up about 28% from the Monday morning after the Fonterra botulism scare !!

[K1W1G0LD]

Just sold another 2000 at 333 ... up 9c on the day , a small number left ( 1087 ) and then I am done selling until next September due to the escrow agreements with the old Synlait shareholders written into the IPO.

Amazing run ... up about 28% from the Monday morning after the Fonterra botulism scare !!

Looks like you've done pretty well out of Synlait already, I'm going to stay in for the ride to see how far this little run can go on for. cheers kiwigold.


Disc; hold SML,HNZ

[AndyLP]

Absolutely enjoy reading about your successes FH - are you able to tell us what your overall gains were over the 10 year investment?

[FarmerHamilton]

Absolutely enjoy reading about your successes FH - are you able to tell us what your overall gains were over the 10 year investment?

Initial investment in Oct 2003 : $400,000 , also an additional $25,000 investment in 2006

Sales proceeds since May listing of Synlait Farms ( on Unlisted market ) and IPO of Synlait Milk of NZX : $1,053,700

Remaining holding in Synlait Farms (SNLF) : 155,000 @ $1.55 = $240,250
Remaining holding in Synlait Milk (SML) : 64,962 @ $3.30 = $214,374

Net gain $1,083,324

[The BOWMAN]

Just sold another 2000 at 333 ... up 9c on the day , a small number left ( 1087 ) and then I am done selling until next September due to the escrow agreements with the old Synlait shareholders written into the IPO.

Amazing run ... up about 28% from the Monday morning after the Fonterra botulism scare !!

Hey Farmerhamilton, what is the agreement you mentioned in your post? How much do you need to sell and is there any timeline? How much shares would be forced to sell on the market like this? It basically means there are some artificial selling pressure and once this is removed, it will go up even faster.

[CJ]

Hey Farmerhamilton, what is the agreement you mentioned in your post? How much do you need to sell and is there any timeline? How much shares would be forced to sell on the market like this? It basically means there are some artificial selling pressure and once this is removed, it will go up even faster.its a lock- up, not a forced sale. If they didn't sell their shares into the IPO, they have to hold on to (most of) those shares for a year.

[FarmerHamilton]

its a lock- up, not a forced sale. If they didn't sell their shares into the IPO, they have to hold on to (most of) those shares for a year.

Post the IPO existing holders were allowed to sell a maximum of $300,000 worth of shares ( using $2.20 as the divisor ) in the period up to the release of the 2013/14 results expected next September.

Disc: I have sold my allowed number and now MUST hold the balance until this time next year.

[percy]

On behalf of all of us, may we offer a warm welcome to the buyer at $3.38, and congratulate the person who brought a small parcel of SML at $2.40.

[Scottman]

ditto Percy

[K1W1G0LD]

and lets not forget those who just joined at $3.50. What a ride!

[randoman]

Looking very thin on the sell side. Good times.

[percy]

and lets not forget those who just joined at $3.50. What a ride!

Stunned.!!
Lost for words.
Yes what a ride.!

[zigzag]

When is their annual result due out? I think it may be next week. If so, todays increase could be people speculating on a good result and good outlook.

[The BOWMAN]

When is their annual result due out? I think it may be next week. If so, todays increase could be people speculating on a good result and good outlook.

or with insider knowledge.

[nextbigthing]

Or fear of missing out on what everybody else has been getting.... Jump on!

Disc still accepting donations of SML shares

[FarmerHamilton]

Or fear of missing out on what everybody else has been getting.... Jump on!

Disc still accepting donations of SML shares

Boy , this is amazing , for an exporter to be up this much over recent weeks while the Kiwi$ has climbed from 78c to 84c you have to scratch your head a little !!! ???

Disc: hold 64,299 SML

[FarmerHamilton]

352 ... result due any day now . Amazing !!

[zigzag]

352 ... result due any day now . Amazing !!

You've got to wonder if the share price has run too hard, too fast. Disclose - wishing I had bought more in the IPO.

[FarmerHamilton]

I think Emirates Team NZ were 8-1 up when someone last posted on this thread !!!!

Annual results out , look good , beat prospectus forecasts despite missing sales volume on the high margin infant formula due to Chinese red-tape.

Shares unmoved on $3.30

Glad to see I'm still well within the top 75 shareholders

[percy]

I think Emirates Team NZ were 8-1 up when someone last posted on this thread !!!!

Annual results out , look good , beat prospectus forecasts despite missing sales volume on the high margin infant formula due to Chinese red-tape.

Shares unmoved on $3.30

Glad to see I'm still well within the top 75 shareholders

You hang in there.!!
We don't want you selling out and leaving us.!!

[FarmerHamilton]

I can't sell Percy. The escrow agreements forbid me selling anymore shares now until this time next year when the 2014 results are released.

C'mon Team NZ ... I'm a nervous wreck at present and need a decent nights sleep !!!!!

[Lease]

Just wonder how EPS of 19.74 cents is calculated. Given NPAT is $11.5m and number of shares is 146,341,197. My calc is EPS at 7.9 cents.

[FarmerHamilton]

Their largest single supplier ( Synlait Farms Ltd ) is in a trading halt on Unlisted .... v interesting !!

SML shares looking rock solid at 335c

Disc: hold 64,299 SML and 128,000 SNLF

[zigzag]

Their largest single supplier ( Synlait Farms Ltd ) is in a trading halt on Unlisted .... v interesting !!

SML shares looking rock solid at 335c

Disc: hold 64,299 SML and 128,000 SNLF
Do you think this could be concerning a capital raising? It would be interesting to see how they construct it, as the shares still seem to be trading well below NTA.

[FarmerHamilton]

Yes .. to justify a trading halt it would have to involve a pretty big cap raising ... many holders of Farms are big holders of Milk so if its a "hand in pockets boys" type cap raising , ie rights issue ... watch this space.

[FarmerHamilton]

Yes .. to justify a trading halt it would have to involve a pretty big cap raising ... many holders of Farms are big holders of Milk so if its a "hand in pockets boys" type cap raising , ie rights issue ... watch this space.


340/345 last 340 +6 Obviously no worries on what SNLF are up to just yet ...

[FarmerHamilton]

This may have something to do with the strength in SML today

WCB recommends Saputo bid of $7 per share





Business Spectator
October 08, 2013 11:47AM

WARRNAMBOOL Cheese and Butter Factory has recommended a takeover bid from Saputo, Canada's largest dairy processor, after earlier spurning an offer from local rival Bega Cheese.

In a statement to the Australian Securities Exchange, WCB said it had entered into a takeover bid implementation deed with Saputo, which will make an all cash off-market takeover offer of $7 per share for all shares on issue, valuing WCB at $392.7 million.
The offer is subject to conditions including Foreign Investment Review Board approval and a minimum acceptance condition of more than 50 per cent of WCB shares.
The companies have agreed WCB may declare and pay fully-franked special dividends of up to a maximum of $1.31 per WCB share, with a corresponding reduction in the offer price, on Saputo reaching specified relevant interest thresholds in WCB.
This would enable distribution of franking credits that could deliver up to an extra 56 cents per share in value.
The WCB board unanimously recommended the offer and each director and executive intends to accept the offer for all shares they hold, the group said.
WCB has agreed to exclusivity restrictions that stop it from entering discussions with any competing bidder, and must also pay a break fee if the board changes its recommendation.
WCB directors last month unanimously recommended shareholders reject Bega's offer of 1.2 Bega shares and $2 cash for each WCB share, saying the $320 million offer was inadequate.
Saputo believes its offer is highly compelling and said excluding any extra value from franking credits, the all-cash offer price represented a 21 per cent premium to the implied value of Bega's offer, based on Bega's share price on the last trading day before its offer was announced.

Saputo said its offer also gives WCB shareholders the certainty of 100 per cent cash for their shares and fewer conditions than the Bega offer.
The bidding war comes as companies vie to supply Asia's growing appetite for diary.
The suitor said its strategy in the acquisition is to position WCB as the centre of its operations in Australia and its main platform to service demand for dairy in the Asia Pacific region.
Saputo said it can assist WCB's future development and accelerate its growth nationally and internationally, which should lead to a greater demand for milk and benefit WCB's suppliers.

- See more at: http://www.theaustralian.com.au/business/mergers-acquisitions/wcb-recommends-saputo-bid-of-7-per-share/story-fn91vdzj-1226734524015#sthash.Chp0akpO.dpuf

[FarmerHamilton]

344 +10

No US Government shut-down effect here !!

[K1W1G0LD]

I can guarantee you that if the debt ceiling is not resolved then nothing will like pretty the day after, even SML.

However, we all know it will get resolved, so keep on holding that liquid white gold ;)

Now YOU'RE starting to sound like Snoopy, Moose.

[K1W1G0LD]

I can guarantee you that if the debt ceiling is not resolved then nothing will like pretty the day after, even SML.

However, we all know it will get resolved, so keep on holding that liquid white gold ;)

Now YOU'RE starting to sound like Snoopy, Moose.

[RTM]

360 ¢ (NZD) 15 4.3%

10/10 10:38 NZT

What's going on Farmer Hamilton ?
Wished I had more !

Cheers
RTM

[GRIFFIN]

White gold is only part of it wait till Lactoferrin kicks in.

[FarmerHamilton]

Man, this sure was a winner! Nothing can stop this puppy, NZ sure loves it's white gold.

Do you have a ridiculous, sell-at-an-extreme-price-no-matter-what target FH?

I can't sell any until Sept'14 due to the escrow clause in the IPO so I will just sit and watch until then. I guess the very fact that so many shares can't be sold by all the larger shareholders and a large chunk of the IPO went to long term institutional holders such as ACC or the SuperFund, and index trackers who need to actually buy more as the price keeps rising means the demand/supply equation is pretty tight!!

I would love to see $4+ by this time next year.

Market Cap us now over $530m !!!

[FarmerHamilton]

Best guess-timate for Synlait Milk of payout for 13/14 season is now .... $9.00 !!!!!

Info gleaned from Synlait Farms takeover documents received today. Holy Cow the NZ economy could go ballistic and RB will be raising rates sooner rather than later.

[K1W1G0LD]

Best guess-timate for Synlait Milk of payout for 13/14 season is now .... $9.00 !!!!!

Info gleaned from Synlait Farms takeover documents received today. Holy Cow the NZ economy could go ballistic and RB will be raising rates sooner rather than later.

FH how would such a high payout to farmers affect SML own profitability and forecast.

[FarmerHamilton]

FH how would such a high payout to farmers affect SML own profitability and forecast.


Hard to say , you would think it would make it tough to hit the budget but prices for the end product such as AMP,SMP,WMP are obviouslt incredibly strong so as long as margins are maintained it should be win/win for everyone. It will certainlt provide incentive for their suppliers to glean every last drop of production from the herd over the rest of the season ... I imagine the price of feed/supplements is climbing rapidly at present as farmers look to building stocks for the late summer / autumn period. A decent summer with good rainfall and the numbers going into the NZ economy could be eye-watering !!

[K1W1G0LD]

Interesting!. lets hope, as you say, it is a win,win situation!
Cheers kiwigold

[Snow Leopard]

from the NBR on Friday: (http://www.nbr.co.nz/article/market-close-nz-shares-rise-led-metlifecare-synlait-after-being-added-msci-indices-bd-148424)

"New Zealand shares rose, led by retirement developer and operator Metlifecare and milk processor Synlait after MSCI announced the stocks be added to its Global Small Cap Indices at the close of Nov. 26, increasing demand for the stock by professional investors who track the global benchmark."

Best Wishes
Paper Tiger

[K1W1G0LD]

from the NBR on Friday: (http://www.nbr.co.nz/article/market-close-nz-shares-rise-led-metlifecare-synlait-after-being-added-msci-indices-bd-148424)

"New Zealand shares rose, led by retirement developer and operator Metlifecare and milk processor Synlait after MSCI announced the stocks be added to its Global Small Cap Indices at the close of Nov. 26, increasing demand for the stock by professional investors who track the global benchmark."



Best Wishes
Paper Tiger

could be better in the longterm PaperTiger........................and off to a cracking start!

[K1W1G0LD]

Wow , end of day $3.95 on good volume too.


You realise you're talking to yourself here Kiwigold , dont you!

Yeah but nevermind at least we're happy, beats HNZ hands down!!

[K1W1G0LD]

I concur crazy person, a good holder! Who would have thought it would be such a strong performer at listing?

aah gee, thanks Moose, at least you're talking to me ........................yeah this is a good one alright.

[percy]

Wow , end of day $3.95 on good volume too.


You realise you're talking to yourself here Kiwigold , dont you!

Yeah but nevermind at least we're happy, beats HNZ hands down!!

Happily sold my SML at $3.85 as I thought ratios were stretched.
Will continue to hold HNZ as I see better value in them.Trading at approx NTA, while SML trades about four times NTA.I don't expect SML to pay a dividend for some time while HNZ are paying an excellent dividend.

[MAC]

Happily sold my SML at $2.85 as I thought ratios were stretched.
Will continue to hold HNZ as I see better value in them.Trading at approx NTA, while SML trades about four times NTA.I don't expect SML to pay a dividend for some time while HNZ are paying an excellent dividend.

Forward growth prospects are good and steady for SML, all the potential in the world, but we seem to be pretty fairly valued now about here I think too.

SP has been tracking at an extraordinary rate of 108%pa since the IPO, well above forward revenue growth rates, and my FA is providing me with a HY14 valuation of $3.85

The trend is your friend so long as it tracks the same direction and at the same rate as the fundamentals.

DISC: Caution

[K1W1G0LD]

Forward growth prospects are good and steady for SML, all the potential in the world, but we seem to be pretty fairly valued now about here I think too.

SP has been tracking at an extraordinary rate of 108%pa since the IPO, well above forward revenue growth rates, and my FA is providing me with a HY14 valuation of $3.85

The trend is your friend so long as it tracks the same direction and at the same rate as the fundamentals.

DISC: Caution

I thought the shareprice was getting a bit ahead of itself too, but as you say endless potential here and the company seem to be on track to meet their forecasts and are investing heavily in increasing production .
But I think its overseas money that keeps pushing the shareprice higher and with that influence $4 looks a cert.

[K1W1G0LD]

Forward growth prospects are good and steady for SML, all the potential in the world, but we seem to be pretty fairly valued now about here I think too.

SP has been tracking at an extraordinary rate of 108%pa since the IPO, well above forward revenue growth rates, and my FA is providing me with a HY14 valuation of $3.85

The trend is your friend so long as it tracks the same direction and at the same rate as the fundamentals.

DISC: Caution

Not buying but holding , Its overseas money pushing this one to these levels, but if they meet their forecasts and keep investing in increasing production, as you say endless potential here particularly in Asian markets. $4 easy by Xmas.

[K1W1G0LD]

Late News Item from stuff.

"Synlait Milk to beat targets"

Looks like this was the reason for todays high closing price. We'll see what happens tomorrow.

[FarmerHamilton]

Late News Item from stuff.

"Synlait Milk to beat targets"

Looks like this was the reason for todays high closing price. We'll see what happens tomorrow.


Today's announcement from Fonterra was SPECTACULARLY good news for Synlait Milk. I estimate that single announcement will probably increase the bottom line by between $10m and $15m for the 13/14 financial year .

WOW !!!

[K1W1G0LD]

Today's announcement from Fonterra was SPECTACULARLY good news for Synlait Milk. I estimate that single announcement will probably increase the bottom line by between $10m and $15m for the 13/14 financial year .

WOW !!!

Yes FH all good news. Its going to be a great Xmas :t_up:

[FarmerHamilton]

Still holding 64,299 .... but the ones I sold below $3 ... wish I could have those back !!

[percy]

Projected profit of SML.
As per prospectus; $19.67 mil = eps .1344cents gives a PE of 28.87
As per prospectus,plus 20% ;$23.60=eps .1613 cents gives a PE of 24.05.
As per prospectus plus FarmerHamilton's $15mil;$34.67=eps .2369 vents gives a PE of 16.38.
No dividend forecast.Market cap.$567,803,844.
Projected profit of HNZ $34mil to $37mil
PE either 9.93 to PE 9.12.Dividend 6cents,yield 6.98% Market cap $337,596,938.
So SML is valued at $230mil more than HNZ,is earning less [even with FarmerHamilton's extra $15mil of earnings] and is not paying a dividend.
I think SML is a fine company,that is why I brought into them,it is just as I posted earlier that I thought ratios had got a bit stretched,so I sold.

[FarmerHamilton]

Projected profit of SML.
As per prospectus; $19.67 mil = eps .1344cents gives a PE of 28.87
As per prospectus,plus 20% ;$23.60=eps .1613 cents gives a PE of 24.05.
As per prospectus plus FarmerHamilton's $15mil;$34.67=eps .2369 vents gives a PE of 16.38.
No dividend forecast.Market cap.$567,803,844.
Projected profit of HNZ $34mil to $37mil
PE either 9.93 to PE 9.12.Dividend 6cents,yield 6.98% Market cap $337,596,938.
So SML is valued at $230mil more than HNZ,is earning less [even with FarmerHamilton's extra $15mil of earnings] and is not paying a dividend.
I think SML is a fine company,that is why I brought into them,it is just as I posted earlier that I thought ratios had got a bit stretched,so I sold.


Not 100% sure how many kgMS they will process this year. Fonterra announcement was probably worth between 50-70c / kg MS of milk solids processed to SML ... at 30,000,000 and 70c my $10-$15m might be more like $21m at the top ed of my very rough calculation. SML are 100% powder ... no cheese ( AMF is cream by-product which pricing is extremely firm ) and Fonterra made specific mention that they make too much cheese and not enough powder to achieve maximum return on each litre of milk processed.

SML just traded at 420c ... almost a double on 220c IPO now !!

Still holding 64,299

[percy]

Not 100% sure how many kgMS they will process this year. Fonterra announcement was probably worth between 50-70c / kg MS of milk solids processed to SML ... at 30,000,000 and 70c my $10-$15m might be more like $21m at the top ed of my very rough calculation. SML are 100% powder ... no cheese ( AMF is cream by-product which pricing is extremely firm ) and Fonterra made specific mention that they make too much cheese and not enough powder to achieve maximum return on each litre of milk processed.

SML just traded at 420c ... almost a double on 220c IPO now !!

Still holding 64,299

Bugger sold too early!!! lol.
Right forecast as per prospectus $19.67 plus new FarmerHamilton $21 mil gives us profit of $40.67mil or eps of 28cents.
So PE at share price of $4.20 is looking a lot better at 15. Still no talk of a divie.

[FarmerHamilton]

Bugger sold too early!!! lol.
Right forecast as per prospectus $19.67 plus new FarmerHamilton $21 mil gives us profit of $40.67mil or eps of 28cents.
So PE at share price of $4.20 is looking a lot better at 15. Still no talk of a divie.

Yes, but they have already announced ( 30/08/13 ) that they will process more milk than the prospectus forecasts and every extra litre I am guessing could be worth quite a bit of extra $$ to them , especially now that they are "having Fonterra for lunch" on the product split revenue per tonne.

The 2013/14 profit could be a real BLOW-OUT of huge proportions in the right direction ... a few years ago it was in the wrong direction on half the volume and cost a heap !!

[zigzag]

Holy cow !!!

[zigzag]

Bugger sold too early!!! lol.
Right forecast as per prospectus $19.67 plus new FarmerHamilton $21 mil gives us profit of $40.67mil or eps of 28cents.
So PE at share price of $4.20 is looking a lot better at 15. Still no talk of a divie.

Percy. They're always said it will be a number of years before they even consider paying a dividend. FirstNZCap. had a price target of $4.00, before the latest announcement. Hope the weather in Christchurch is as good as up here in Auckland, and all the cows are grazing contentedly in lush Canterbury pastures.

[percy]

Percy. They're always said it will be a number of years before they even consider paying a dividend. FirstNZCap. had a price target of $4.00, before the latest announcement. Hope the weather in Christchurch is as good as up here in Auckland, and all the cows are grazing contentedly in lush Canterbury pastures.

I was mentioning dividend as I thought it was important when I was comparing SML to HNZ for Kiwigold.
Looks as though First NZ Cap are right ,again.!!!
Bit of wind here today.Suppose to have showers,but have not seen them yet.Also suppose to get to 27 today,which will be a hot for the cows too!!!.Next few days are for hot dry conditions.

[K1W1G0LD]

I was mentioning dividend as I thought it was important when I was comparing SML to HNZ for Kiwigold.
Looks as though First NZ Cap are right ,again.!!!
Bit of wind here today.Suppose to have showers,but have not seen them yet.Also suppose to get to 27 today,which will be a hot for the cows too!!!.Next few days are for hot dry conditions.

Theoretical calculations are fine Percy , until they don't work out.
I'm picking SML to have a brighter future than HNZ , and as they have stated they will beat their current forecast . I'm picking substantially and I'm not the only one that is, They are investing heavily in increasing production and their markets are assured ...................yes a lot brighter future than HNZ and its happening a lot faster also due to the enormous demand for NZ dairy products. HNZ are going to take a lot longer to realise their goals and dispose of their troublesome bad loans , they are also in my opinion going to need a major credit re-rating for their shareprice to lift much over NTA.
Dividends are'nt everything , I'm happy with the substantial gains the lifting shareprice is giving , SML is already a success story and I'm more than happy to be on this train.

[percy]

Theoretical calculations are fine Percy , until they don't work out.
I'm picking SML to have a brighter future than HNZ , and as they have stated they will beat their current forecast . I'm picking substantially and I'm not the only one that is, They are investing heavily in increasing production and their markets are assured ...................yes a lot brighter future than HNZ and its happening a lot faster also due to the enormous demand for NZ dairy products. HNZ are going to take a lot longer to realise their goals and dispose of their troublesome bad loans , they are also in my opinion going to need a major credit re-rating for their shareprice to lift much over NTA.
Dividends are'nt everything , I'm happy with the substantial gains the lifting shareprice is giving , SML is already a success story and I'm more than happy to be on this train.

Yes the SML train is moving ahead very quickly.
I however will stick with ratios I am comfortable with.

[goldfish]

Im in both sml and hnz, I cant lose listening to you guys :)

Great to see it over 400, hopefully it will stay there till they release more info on forecasts early in the new year.

[MAC]

SML have been performing small upgrades in 2013 and have a few more small upgrades planned for 2014, a lactoferrin plant, a blending and canning facility and extra warehousing etc.

Has anyone run some numbers on the likely maximum capacity or constraint of the existing Synlait facility once these wee enhancements are taken up, without further major investment and capital outlay being required in a second facility ?

Obviously, the SML site geographically is large enough for further facility expansion should major capital outlay arise on the radar, but I’m more interested at present in what the existing facility may cap out at ?

[goldfish]

Interesting depth change from two days ago, yesterday a 400k package of shares went through off market seems to have sparked things.
Plus waiting on announcement of forecast which they have said will way above prior.
Announcement on that early in the new year, wish they would hurry up the market is going nuts for good news announcements.
Anyone know when they will put out the forecast?

[000831]

The announcement would be the new warehouse (22500 sqm) and lactoferrin completes by Feb.
The quality lab would be completed by March.
The new blending and Canning would be completed by June.
Synlait expects to outperform financial targets on the basis of a favourable product mix in the future two years.

SP to 8-9 ?

[Citizen Erased]

I've been trying to take a wee nibble at SML for the past three days but the price keeps creeping away from me. Is it a case of "a rising tide lifts all boats" or is the near-term outlook really that good?

I'm not sure which offers better value at this point in time - SML or ATM?

[MAC]

I've been trying to take a wee nibble at SML for the past three days but the price keeps creeping away from me. Is it a case of "a rising tide lifts all boats" or is the near-term outlook really that good?

I'm not sure which offers better value at this point in time - SML or ATM?

Certainly SML has risen fast since the IPO, but I still can’t decide whether to go long or not either, a lot has been priced in already, and I’m not sure at what point capacity constraints will kick in per my previous post, would really appreciate advice from those knowledgeable within the industry whom may have hit the calculator and looked closely at this ?

My feel is that SML will level off at some point, there is only so much growth that can be squeezed out of a single factory even with all the wee planned upgrades.

[K1W1G0LD]

Interesting depth change from two days ago, yesterday a 400k package of shares went through off market seems to have sparked things.
Plus waiting on announcement of forecast which they have said will way above prior.
Announcement on that early in the new year, wish they would hurry up the market is going nuts for good news announcements.
Anyone know when they will put out the forecast?

they stated in their announcement on 11/12/13 that they would be making an update to market early in the new year , whether that's before the half year end on Jan 31st is anyone's guess , anyway not long to wait for that one.

[K1W1G0LD]

I see a brighter furure for Synlait, more diverse product range , ATM are only marketing A2 Milk.

[Citizen Erased]

I see a brighter furure for Synlait, more diverse product range , ATM are only marketing A2 Milk.

And A2 infant formula and A2 yoghurt.

[mcdongle]

Anyone know how the Lactoferrin plant is coming along??

[K1W1G0LD]

And A2 infant formula and A2 yoghurt.

thats interesting, I have'nt researched ATM , always thought it to be a niche (and expensive) product and not one I need to buy fortunately like the majority of the worlds population.

[000831]

for SML, the growth is secured by fixed contracts. ATM growth prob more depends on its own marketing move.

Personally, I think that SML may be less risky than ATM.

When Milford fund buy in?

[K1W1G0LD]

Interesting depth change from two days ago, yesterday a 400k package of shares went through off market seems to have sparked things.
Plus waiting on announcement of forecast which they have said will way above prior.
Announcement on that early in the new year, wish they would hurry up the market is going nuts for good news announcements.
Anyone know when they will put out the forecast?

goldfish, just heard back from a chap called Michael Wan at SML , see following message.


At this stage we plan to provide further guidance on our forecast for the FY 14 year in late January/early February.

The half year result announcement will be late March.

So not to long to wait for some good? news re revised forecast.



Kind regards

Mike

[goldfish]

goldfish, just heard back from a chap called Michael Wan at SML , see following message.


At this stage we plan to provide further guidance on our forecast for the FY 14 year in late January/early February.

The half year result announcement will be late March.

So not to long to wait for some good? news re revised forecast.



Kind regards

Mike

Good stuff, thanks for sharing.

[Slam dunk]

https://www.nzx.com/companies/SML/announcements/246418

[FarmerHamilton]

https://www.nzx.com/companies/SML/announcements/246418

11-12-2013, 07:37 PM #415 (http://www.sharetrader.co.nz/showthread.php?7341-Synlait-to-float&p=448974&viewfull=1#post448974)
FarmerHamilton (http://www.sharetrader.co.nz/member.php?12182-FarmerHamilton)
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"Synlait Milk to beat targets"

Looks like this was the reason for todays high closing price. We'll see what happens tomorrow.





Today's announcement from Fonterra was SPECTACULARLY good news for Synlait Milk. I estimate that single announcement will probably increase the bottom line by between $10m and $15m for the 13/14 financial year .

WOW !!!



Looks like my $10-$15m above prospectus is exactly the range that chairman Milne is using ....

Nice !!

Disc: Holding 64,299 SML

[000831]

As tech stocks pull back, the smart money will flow into defensive dairy sector again.

DISC: HOLDING SIGNIFICANT AMOUNT

[000831]

Continuing high international commodity prices have resulted in Synlait Milk increasing its forecast milk price for the FY2014 season from $8.00 per kgMS to a range of $8.30 to $8.40 per kgMS.
The Company also lifted its advance rates for the season effective from January, to be paid February, from $5.00 per kgMS to $6.40 per kgMS.
Synlait Milk Chairman Graeme Milne says it is the Company’s policy to pay its contract milk suppliers a competitive market price and the increase reflects the sustained high commodity prices.
“Our forecast FY2014 financial performance continues to improve and we expect the Company will benefit from both earnings growth in our value added categories and a favourable product mix for the remainder of this financial year. Assuming current market conditions prevail our FY2014 net profit after tax will be significantly ahead of the prospectus forecast of $19.8 million, and is forecast to be in the range of $30.0 to $35.0 million,” said Mr Milne.
Synlait Milk Managing Director John Penno says despite challenges associated with Chinese government regulatory reform the Company is confident of delivering on its infant formula and nutritional products strategy.
“In the short term these regulatory changes will continue to result in considerable disruption in the Chinese market and we may not achieve our forecast target of 10,000 metric tonnes of infant formula and nutritional sales this financial year. However, we remain confident that these changes will validate the strategy of our business over time and will underpin our ability to meet our long term targets through expected volume growth from our key customers in this market.”
“Meanwhile business development continues in key markets outside of China. We expect to commence production of milk powders as infant formula ingredients for two new tier one multi-national companies in the second half of this financial year,” said Mr Penno.
Synlait Milk also expects to commission its lactoferrin plant late February with commercial production commencing from early March. While this is a little behind the planned commissioning date the Company expects to exceed its forecast two metric tonnes of lactoferrin sales in this financial year.
A further update on Synlait’s year end financial forecast is expected when it announces its interim results on 27 March 2014.




I guess that by the end of year, the net profit would be over $40m, double than the previous forecast. haha ~ Bright Diary will get the license from Chinese government a month later. Chinese government issued 12 licenses so far, any company without license won't legally to sell milk products in China. If Bright Diary grants license next month, SML will benefit from less competitions in China.

[000831]

Continuing high international commodity prices have resulted in Synlait Milk increasing its forecast milk price for the FY2014 season from $8.00 per kgMS to a range of $8.30 to $8.40 per kgMS.
The Company also lifted its advance rates for the season effective from January, to be paid February, from $5.00 per kgMS to $6.40 per kgMS.
Synlait Milk Chairman Graeme Milne says it is the Company’s policy to pay its contract milk suppliers a competitive market price and the increase reflects the sustained high commodity prices.
“Our forecast FY2014 financial performance continues to improve and we expect the Company will benefit from both earnings growth in our value added categories and a favourable product mix for the remainder of this financial year. Assuming current market conditions prevail our FY2014 net profit after tax will be significantly ahead of the prospectus forecast of $19.8 million, and is forecast to be in the range of $30.0 to $35.0 million,” said Mr Milne.
Synlait Milk Managing Director John Penno says despite challenges associated with Chinese government regulatory reform the Company is confident of delivering on its infant formula and nutritional products strategy.
“In the short term these regulatory changes will continue to result in considerable disruption in the Chinese market and we may not achieve our forecast target of 10,000 metric tonnes of infant formula and nutritional sales this financial year. However, we remain confident that these changes will validate the strategy of our business over time and will underpin our ability to meet our long term targets through expected volume growth from our key customers in this market.”
“Meanwhile business development continues in key markets outside of China. We expect to commence production of milk powders as infant formula ingredients for two new tier one multi-national companies in the second half of this financial year,” said Mr Penno.
Synlait Milk also expects to commission its lactoferrin plant late February with commercial production commencing from early March. While this is a little behind the planned commissioning date the Company expects to exceed its forecast two metric tonnes of lactoferrin sales in this financial year.
A further update on Synlait’s year end financial forecast is expected when it announces its interim results on 27 March 2014.




I guess that by the end of year, the net profit would be over $40m, double than the previous forecast. haha ~ Bright Diary will get the license from Chinese government a month later. Chinese government issued 12 licenses so far, any company without license won't legally to sell milk products in China. If Bright Diary grants license next month, SML will benefit from less competitions in China.


If SP sticky to $4.00

if Expected Net profit 2014 = 40m, then EPS = 0.27, PE = 14.8
If expected Net profit 2014 = 35m, then EPS = 0.24, PE = 16.67
If Expected Net Profit 2014 = 30m, then EPS = 0.205, PE = 19.51

If SP = 8.00

if Expected Net profit 2014 = 40m, then EPS = 0.27, PE = 29.6
If expected Net profit 2014 = 35m, then EPS = 0.24, PE = 33.33
If Expected Net Profit 2014 = 30m, then EPS = 0.205, PE = 39

Growth rate for NPAT, 2012/2013 = 245%
Growth rate for NPAT, 2013/2014 = 277% - 370%

ROE 2013/2014 = 18.3% -24.4%

[goldfish]

Excellant result for synlait... And yet we are down 1.5%, no depth, wtf happened? To make it worse fonterra is up 2% on no news, this kind of thing makea me want to give up investing.

[000831]

Excellant result for synlait... And yet we are down 1.5%, no depth, wtf happened? To make it worse fonterra is up 2% on no news, this kind of thing makea me want to give up investing.


I guess that the big guys are afraid of buying too much due to liquidity problem. Or worry about license in China has not been approved yet. Bright diary will get it soon, its three major shareholders are stated own companies. Great stage to buy more at this price. Better wait for those funds buying. Volume is increasing anyway. The trade may deal between funds not retails investors now.

Compared with ATM,

SML has 146 million share outstanding, NPAT is above 35 million this year, now price at around 4.00 . EPS 2014 = 0.27 , PE = 14.8 ($4.00), PE = 29.6 ($8.00)

ATM has 655million share outstanding, NPAT around 6-8 million this year ? now price at around 1.00, EPS 2014 = 0.012 (using 8 m), PE = 83.33 ($1.00) , PE = 166.66 ($2.00)

[zigzag]

Excellant result for synlait... And yet we are down 1.5%, no depth, wtf happened? To make it worse fonterra is up 2% on no news, this kind of thing makea me want to give up investing.

Synlait share price has increased from $2.20 to $4.00 in less than a year, and some people are still complaining. Perhaps you would like a dividend as well.

[goldfish]

Synlait share price has increased from $2.20 to $4.00 in less than a year, and some people are still complaining. Perhaps you would like a dividend as well.

Where am I complaining about synlaits share increase over a year? or are you lacking comprehension skills? Or can i not comment on a 70odd % profit increase in profit pushing the sp down 2% for the day. A huge odditity from my point of view but i'll be sure to check with you in the future before posting least I come across as complaining...You have any comment on todays price action in relation to the release? Or did you just come in to criticize my post?


000831...It hit my trailing stop so im out for now sadly, seems fully priced for now...gluck to holders.

[Xerof]

Broking house analysts were expecting slightly higher guidance, according to a broker house analyst

so everything already priced in and more

[goldfish]

Broking house analysts were expecting slightly higher guidance, according to a broker house analyst

so everything already priced in and more

I wondered if it had already been priced in when it went to 420 when they first said about it in december. A 2.5% drop since released now.

[K1W1G0LD]

Go figure, a profit forecast increase of at least 50% and the shareprice drops, I guess some holders expectations too high.
Be interesting see what happens when the dust settles over next few days and weeks. Still betting this will be great longterm hold.

[silverblizzard888]

Go figure, a profit forecast increase of at least 50% and the shareprice drops, I guess some holders expectations too high.
Be interesting see what happens when the dust settles over next few days and weeks. Still betting this will be great longterm hold.

Profits may be up only due to high prices, but forecast sales didn't met forecast. If in a situation that the prices were low, then not meeting forecast is a big problem (forecast target of 10,000 metric tonnes), it means its fundamentals for the long run may not be as strong if it's not delivering. I do personally think its a good long-term hold, actually anything dairy is a good long-term hold as theres always going to be demand and by the looks of it it will only keep increasing as time goes.

[K1W1G0LD]

Profits may be up only due to high prices, but forecast sales didn't met forecast. If in a situation that the prices were low, then not meeting forecast is a big problem (forecast target of 10,000 metric tonnes), it means its fundamentals for the long run may not be as strong if it's not delivering. I do personally think its a good long-term hold, actually anything dairy is a good long-term hold as theres always going to be demand and by the looks of it it will only keep increasing as time goes.


Our forecast FY2014 financial performance continues to improve and we expect
the Company will benefit from both earnings growth in our value added
categories and a favourable product mix for the remainder of this financial
year.

I would have thought that the fact that the coy is picking financial performance will continue to improve for the rest of this year would have negated fears about missing production targets in one or two areas.


Meanwhile business development continues in key markets outside of China. We
expect to commence production of milk powders as infant formula ingredients
for two new tier one multi-national companies in the second half of this
financial year," said Mr Penno.

And the fact that they are developing new customers to make up for the shortfall in these areas.


Synlait Milk also expects to commission its lactoferrin plant late February
with commercial production commencing from early March. While this is a
little behind the planned commissioning date the Company expects to exceed
its forecast two metric tonnes of lactoferrin sales in this financial year.


plus the new lactoferrin plant will be producing and adding to the year end bottom line.

I dont think followers or holders of this company have to much to fear from downgrades this financial year silverblizzard and like you I think this coy has a strong future in dairy exports. I suspect todays fall in the shareprice is the usual overeaction that is common on the NZX these days and when people sit back and have a reasoned look at the financials of this coy the shareprice will recover the losses of the past few weeks . A good buying opportunity at present I would say.

[000831]

The demand for milk is strong growing and regardless economic conditions, saying economic recession. Infant formula milk and milk itself becomes a necessity consume goods in Asia as the family incomes increase in those countries. All milk producers are increasing production since 2009 and there is no signal that the demand for raw material will slowdown or make a U turn. Although the infant milk formula does not meet the sales target in China at present, SML still benefit from increasing milk price, increasing production lines and other mixed products sales.


When the infant milk formula problem solved in China for Bright Dairy, then we will be surprised and benefit again. Then the NAPT will jump over this Jan forecast again.

[Lease]

The demand for milk is strong growing and regardless economic conditions, saying economic recession. Infant formula milk and milk itself becomes a necessity consume goods in Asia as the family incomes increase in those countries. All milk producers are increasing production since 2009 and there is no signal that the demand for raw material will slowdown or make a U turn. Although the infant milk formula does not meet the sales target in China at present, SML still benefit from increasing milk price, increasing production lines and other mixed products sales.


When the infant milk formula problem solved in China for Bright Dairy, then we will be surprised and benefit again. Then the NAPT will jump over this Jan forecast again.

I certainly agree with you. Take the chance to buy into when SP is dipping these two days.

[Radler]

5404

Someone is keen.... an order of 42000 at $3.75 and 25000 shares just went through at $3.80

[Citizen Erased]

How low will she go? Down almost 10% in a week. I thought this was one of my more conservative investments. :mellow:

[1leon]

How low will she go? Down almost 10% in a week. I thought this was one of my more conservative investments.

The share had an indicative pricing of $2.05-$2.65 and the prospectus was variously described as "optimistic" and "having plenty of blue sky". Shares were the issued towards the bottom of the range at $2.20 but immediately listed around $2.65. Within 6 months (listing was only 23/7/13) the shares had risen to $4.20 or approx. 90% on issue price. It might also appear some investors have lost sight of or do not realise the company is non standard -Bright Dairy enjoying control whilst holding under 50% of the shares and it was not promising dividends for some time. I wonder if it is not significantly speculative in current price ranges rather than conservative.

[000831]

The share had an indicative pricing of $2.05-$2.65 and the prospectus was variously described as "optimistic" and "having plenty of blue sky". Shares were the issued towards the bottom of the range at $2.20 but immediately listed around $2.65. Within 6 months (listing was only 23/7/13) the shares had risen to $4.20 or approx. 90% on issue price. It might also appear some investors have lost sight of or do not realise the company is non standard -Bright Dairy enjoying control whilst holding under 50% of the shares and it was not promising dividends for some time. I wonder if it is not significantly speculative in current price ranges rather than conservative.

I do not think the current price has an issue, compared with WYN. It also listed around 1.00 then 3.00 now, but in different sector. Other two dairy companies, ATM and FSF price moved upwards, but SML. However, SML has better growth in revenue and return than ATM. ATM does not fall as it does not have Chinese government license to sale infant milk products.

The price reflects the company perspectives and investors' expectations. The worst situation would be infant milk power production sale zero in China. That challenges SML, but if it shift those products sale in OZ, then it won't be a problem. So anything between $3.70 and $4.20 won't surprise me before the company report releases. $3.70 -$3.75 would be a good buying price, PE estimate around 14.

Just wondering who is buying at $3.75 - $3.85. We have around 4 million dollars buying power those two days.

[Lease]

I do not think the current price has an issue, compared with WYN. It also listed around 1.00 then 3.00 now, but in different sector. Other two dairy companies, ATM and FSF price moved upwards, but SML. However, SML has better growth in revenue and return than ATM. ATM does not fall as it does not have Chinese government license to sale infant milk products.

The price reflects the company perspectives and investors' expectations. The worst situation would be infant milk power production sale zero in China. That challenges SML, but if it shift those products sale in OZ, then it won't be a problem. So anything between $3.70 and $4.20 won't surprise me before the company report releases. $3.70 -$3.75 would be a good buying price, PE estimate around 14.

Just wondering who is buying at $3.75 - $3.85. We have around 4 million dollars buying power those two days.

I bought at $3.80, but certainly not invest $4m, haha.

[000831]

I bought at $3.80, but certainly not invest $4m, haha.

Bright Dairy bought Australian dairy firm Mundella this Jan for over AUD 500 million, could dual list SML or IPO Mundella at ASX. Wait for the second capital raise perhaps. Just see how bright dairy to play with Mundella and SML separately or .............. haha

[1leon]

I do not think the current price has an issue, compared with WYN. It also listed around 1.00 then 3.00 now, but in different sector. Other two dairy companies, ATM and FSF price moved upwards, but SML. However, SML has better growth in revenue and return than ATM. ATM does not fall as it does not have Chinese government license to sale infant milk products.

The price reflects the company perspectives and investors' expectations. The worst situation would be infant milk power production sale zero in China. That challenges SML, but if it shift those products sale in OZ, then it won't be a problem. So anything between $3.70 and $4.20 won't surprise me before the company report releases. $3.70 -$3.75 would be a good buying price, PE estimate around 14.

Just wondering who is buying at $3.75 - $3.85. We have around 4 million dollars buying power those two days.
I think the comparison you make with WYN is precisely the issue---the tech bubble is engulfing the market if an investor can look at a 90% increase in value within 6 months of listing as a conservative investment.

[Schrodinger]

How low will she go? Down almost 10% in a week. I thought this was one of my more conservative investments. :mellow:

Might be getting into value territory soon. Might take a look at the business

[MAC]

I’ve a HY14 DCF valuation on SML of $4.16.

Much of their recent growth has come from increasing margins, great, but I’ve longer term forward growth concerns about how much capacity is left in their one site without further capital requirements and possibly further dilution, even with the 40% additional capacity coming with the lactoferrin process.

Now the post IPO stag is starting to drop off, I’m cautiously starting to look for a long term entry under $3.00 on a value basis (30% discount to valuation).

The traders may take flight now, could provide an ok opportunity for investors looking to enter.

DISC: Watching for now

[percy]

Just keep in mind the Escrow shares.Big holders are limited to selling $300,000 worth of shares for 15 months.

[000831]

I’ve a HY14 DCF valuation on SML of $4.16.

Much of their recent growth has come from increasing margins, great, but I’ve longer term forward growth concerns about how much capacity is left in their one site without further capital requirements and possibly further dilution, even with the 40% additional capacity coming with the lactoferrin process.

Now the post IPO stag is starting to drop off, I’m cautiously starting to look for a long term entry under $3.00 on a value basis (30% discount to valuation).

The traders may take flight now, could provide an ok opportunity for investors looking to enter.

DISC: Watching for now

May I ask what the annual growth rate you are using?

[MAC]

May I ask what the annual growth rate you are using?

Beyond FY15 I'm running two scenario’s, 'capacity constrained growth from cashflows', and, 're-capitalisation & dilution with a continuation of present growth rates'.




HY14
FY14
HY15
FY15


REV
236
524
288
629


NPAT
11
33
21
50

[000831]

Beyond FY15 I'm running two scenario’s, 'capacity constrained growth from cashflows', and, 're-capitalisation & dilution with a continuation of present growth rates'.




HY14

FY14

HY15

FY15



REV

236

524

288

629



NPAT

11

33

21

50





Thanks. Just sold WYN and ready for more SML.

DISC, HOLD SIGNIFICANT AMOUNT OF SML.

[Schrodinger]

Just read through the prospectus and took notes:

-Very skinny margins but are improving.
-Have 2 large downstream investors which provide security to supply and financial stability
-Concentrated customers and markets add risk and long term I would like to see them diversify. Not convinced they can get into unfamiliar markets.
-Ruth Richardson doesnt excite me as a director. She was terrible in government and I would expect terrible as a director. probably unkind but I doubt she was place their for her skill as I think she represents Bright and they understand political connections. Good to see Chinese Bright Dairy people on there.
-Consensus is that they wont pay a dividend for years. This places even more emphasis on getting in at a good price and enjoying future capital gains.
-Very pleasing profit results recently.
-Lack of information on competition which is puzzling. Probably the first prospectus I have read that doesnt mention anything (I may have missed this?)
-All the fundamentals for their verticals are compelling for future growth.
-Would of liked better sensitivity analysis on factors affecting the business. NZR does this very well in their investor presentations. Interested to know what impact the XR has and what the company would look like with a NZD/USD @ 60c/90c. Likewise with milk price. They attempted this on one of the pages but was poorly presented.
-Entirely reliant on milk supply from local sources (volume+price set externally) and business concentrated in one location. Adds more risk imo as the manufacturing base is not diversified (Did I read correctly?). What is Synlaits ability to keep this honest.
-Transportation, distance to markets is a factor hence why most companies have slim margins in this space.
-Friesland Campina: interested on the rational for their investment. Is it a major customer?
-Like their decision to shift investment into infant formula. Should diversify product lines even further and derisk the business.

Conclusion, interesting for a diversification play although what is a fair entry price is tricky. The more the SP falls the higher the chance I will enter.

[000831]

Just read through the prospectus and took notes:

-Very skinny margins but are improving.
-Have 2 large downstream investors which provide security to supply and financial stability
-Concentrated customers and markets add risk and long term I would like to see them diversify. Not convinced they can get into unfamiliar markets.
-Ruth Richardson doesnt excite me as a director. She was terrible in government and I would expect terrible as a director. probably unkind but I doubt she was place their for her skill as I think she represents Bright and they understand political connections. Good to see Chinese Bright Dairy people on there.
-Consensus is that they wont pay a dividend for years. This places even more emphasis on getting in at a good price and enjoying future capital gains.
-Very pleasing profit results recently.
-Lack of information on competition which is puzzling. Probably the first prospectus I have read that doesnt mention anything (I may have missed this?)
-All the fundamentals for their verticals are compelling for future growth.
-Would of liked better sensitivity analysis on factors affecting the business. NZR does this very well in their investor presentations. Interested to know what impact the XR has and what the company would look like with a NZD/USD @ 60c/90c. Likewise with milk price. They attempted this on one of the pages but was poorly presented.
-Entirely reliant on milk supply from local sources (volume+price set externally) and business concentrated in one location. Adds more risk imo as the manufacturing base is not diversified (Did I read correctly?). What is Synlaits ability to keep this honest.
-Transportation, distance to markets is a factor hence why most companies have slim margins in this space.
-Friesland Campina: interested on the rational for their investment. Is it a major customer?
-Like their decision to shift investment into infant formula. Should diversify product lines even further and derisk the business.

Conclusion, interesting for a diversification play although what is a fair entry price is tricky. The more the SP falls the higher the chance I will enter.

http://www.stockandland.com.au/news/agriculture/agribusiness/general-news/chinese-co-to-buy-wa-dairy/2684419.aspx

http://europe.chinadaily.com.cn/business/2012-11/05/content_15875519.htm

http://www.reuters.com/article/2013/09/03/us-brightfood-tnuva-idUSBRE9820L220130903

It can delivery products to different destinations through Bright food. SML revenue seems to be a very little pie in Bright food total revenue, and too little to feed Chinese market. Another shareholder Friesland Campina could reach south east countries. Yes, it is another giant in this field.

Infant formula very high margin say 100% per tin after cost, but must solve the Chinese government new regulations before the sales start.

Through the deals provided from above links, SML have no problem for capacity grow and financing matters. Product mix is underway till 2015.

[K1W1G0LD]

Early days yet, but on 2 previous occasions in last few months (once in Nov and Dec) when this stock has tracked sideways there seems be to be a level of support at 370 .
Time will tell!!

[Harvey Specter]

GS has downgraded to sell with a target of $3.7.

[FarmerHamilton]

GS has downgraded to sell with a target of $3.7.

Wow, that's so interesting !! .... the price is already at $3.70 !!

Disc: hold 64,299 SML and about to lose my 128,000 SNLF in the takeover ( assuming OIA "tick" )

[Harvey Specter]

Wow, that's so interesting !! .... the price is already at $3.70 !!The price was 3.82 when they wrote it so I assume that justified the sell rating.

Having said that, I think he has always priced it at lower than market value based on the fancy graph on the last page.

[K1W1G0LD]

GS has downgraded to sell with a target of $3.7.

read the Rolling Stone article about GS , a good company to stay away from!

[Schrodinger]

read the Rolling Stone article about GS , a good company to stay away from!

Considering they underwrote the IPO and are involved in all sorts of investment shenanigans in the US I would agree.

[K1W1G0LD]

Considering they underwrote the IPO and are involved in all sorts of investment shenanigans in the US I would agree.

yeah, shame that . Still, show me an honest investment bank.

[K1W1G0LD]

http://m.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405

thanks for that moose , I've got too many to look through , a good read as are the rest of his articles.

[Harvey Specter]

http://m.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405
Far to long. I prefer the shorter version
https://twitter.com/gselevator/status/418557710624653312

[000831]

I do not trust any investment banks, all urgly for money. They may do anything for large profits in share market those days. They set up the regulations and rules and manupilate market.


Yili and MengNiu Dairy got Chinese government infant milk powder licenses this Jan, and allow to sell in supermarket, already increased their product around $105/tin from $60-$70/tin since last Dec. Those products are not high end, compared with NZ produced milk products.

If Chinese stated owned Bright Dairy grants license, then SML should have a new segment to grow with over 200% growth in revenue and profit annually, which may contribute total growth over 50% in NPAT annually for future five years.

Ask SML investor relations, they may explain what happen in China for infant milk powder. Crazy, they call it as white golden powder.

I am looking forward to seeing what GS will say after SML gets the Chinese government license.

[1leon]

I do not trust any investment banks, all urgly for money. They may do anything for large profits in share market those days. They set up the regulations and rules and manupilate market.


Yili and MengNiu Dairy got Chinese government infant milk powder licenses this Jan, and allow to sell in supermarket, already increased their product around $105/tin from $60-$70/tin since last Dec. Those products are not high end, compared with NZ produced milk products.

If Chinese stated owned Bright Dairy grants license, then SML should have a new segment to grow with over 200% growth in revenue and profit annually, which may contribute total growth over 50% in NPAT annually for future five years.

Ask SML investor relations, they may explain what happen in China for infant milk powder. Crazy, they call it as white golden powder.

I am looking forward to seeing what GS will say after SML gets the Chinese government license.
Why will Bright not take the profit itself rather than give it all to SML? Bright operates at all levels, SML doesn't.

[1leon]

000831, some questions for you, in regard to your scenario above;

Given China Bright have ceded control of Synlait do you think any of the above would be even possible ?
Worse they haven't in fact ceded control. They reduced their holding just below 50% but RETAIN effective control. Current share buyers also seem to totally overlook the unique non standard governance provision. They might also reflect that Bright wasn't prepared to buy in at $2.20 to maintain its majority (it negotiated a deal it didn't need to) yet the market is somehow speculating those shares are worth over $4 six months later!

[shambles]

Greetings all,
Seems to me that SML is the only opportunity to get real dairy equity exposure on the NZX (please do correct me if this is inaccurate). Showing a bit of price and buyer depth weakness over the last month.. potentially finding a range after a good ramping since the IPO.
Considering topping up at current price, any of the TAs here able to offer some thoughts on what the charts are indicating?
Many thanks.. Shambles

[shambles]

Greetings all,
Seems to me that SML is the only opportunity to get real dairy equity exposure on the NZX (please do correct me if this is inaccurate). Showing a bit of price and buyer depth weakness over the last month.. potentially finding a range after a good ramping since the IPO.
Considering topping up at current price, any of the TAs here able to offer some thoughts on what the charts are indicating?
Many thanks.. Shambles

[RTM]

"The total capital expenditure required to complete both projects is forecast
to be $21.0 million. This is an increase from the prospectus forecast of $8.4
million. Both facilities are expected to be completed by February 2015. "

While its great to see this kind of investment in New Zealand, especially out of Auckland, I am pleased I did not bother to read the prospectus in to much detail !

[Billy Boy]

Some folk are saying the dairy price could well drop over our winter coz of the
up surge in north America (their summer and they are gearing up).
This coupled with RTM's post above is holding SML in no mans land. ATM.
BB:)

[000831]

If the announcement has been combined with previous forecast report, it would not expect to have such turbulence in price.

[K1W1G0LD]

Well the worst seems to be over now, that bit of turbulence was all a bit overdone. Cost overuns are to be expected when your developing and expanding a relatively new plant and at least they're making a healthy profit.

[zigzag]

Well the worst seems to be over now, that bit of turbulence was all a bit overdone. Cost overuns are to be expected when your developing and expanding a relatively new plant and at least they're making a healthy profit.

My impression is that they are doing so well, they have decided to bring forward capital spending. They are using extra profit to grow the business. Still ticking all my boxes!

[K1W1G0LD]

My impression was that they are doing so well, that they have decided to bring forward capital spending. They are using extra profit to grow the business. Still ticking all my boxes!

Yes I believe they are doing well too zigzag , the shareprice may have got a bit ahead of itself .

[000831]

Worth to hold for two years super growth period, at least dairy sector is still strong. Dairy exporting to China is only 5% in total, pretty room to grow.

[Schrodinger]

Article in the paper talking about an industry shakeout in China. This should be good news for SML assuming Bright gets the golden nod.

[000831]

today's volume, today's news with Chinese currency?

[RTM]

SYNLAIT SML.NZX $18,173,068 4,720,241 19
Is FarmerHamilton selling up ?
Huge numbers today.

[zigzag]

SYNLAIT SML.NZX $18,173,068 4,720,241 19
Is FarmerHamilton selling up ?
Huge numbers today.

Farmer Hamilton and his fellow travellers can't sell their shares until September, due to the escrow thingy. Still would be curious to know who has been buying and who is the seller.

[000831]

FrieslandCampina Investments Holding B.V. is the buyer. Increased holding to 9.99%.

I thought some Chinese were buying, but not.

[FarmerHamilton]

Farmer Hamilton and his fellow travellers can't sell their shares until September, due to the escrow thingy. Still would be curious to know who has been buying and who is the seller.

Yes, that is correct , no selling by original shareholders ( apart from the $300,000 allowance ... which I have used up ! ) until the Y/E Julyl2014 results are announced probably in late September which is still another six months or so away.

Money received from Synlait Farms takeover last week so I am now looking at buying a farm in a syndicate in Southland in the next few months. Have been down three times in the last 10 days looking a some really nice farms near Waianawa and Woodlands and will be heading out the door in about 30 minutes to look at a smaller 300 cow unit further north near Riversdale this afternoon.

Anyone keen to buy a direct stake in a dairy farm let me know ...

[FarmerHamilton]

No selling from me zigzag ( can' due to lock-up ... but even if I could I wouldn't !! ) ... stock goes much higher over the next few years !

Buy Synlait Milk ... buy a dairy farm , become a sharemilker .... just get in to dairy !!

[Snow Leopard]

No selling from me zigzag ( can' due to lock-up ... but even if I could I wouldn't !! ) ... stock goes much higher over the next few years !

Buy Synlait Milk ... buy a dairy farm , become a sharemilker .... just get in to dairy !!

DO you not worry that you are putting all your eggs into one basket (or perhaps all your milk into one churn)?

Or do you see that sticking to what you know is best?

Best Wishes
Paper Tiger

[FarmerHamilton]

PaperTiger

No , I am not scared of putting a large proportion of my investment portfolio into dairy investments. I think the long term future is excellent and NZ is probably the best country in the world in which to own a dairy farm ... climate, soil types, people, technology ... its all here is spades!

I'll keep a few Coca Cola, Nestle, Roche, United Technologies, and JP Morgan shares to have a few divvies rolling in but more than happy to be 75%+ weighting to milk production and processing ( via SML )

cheers

[zigzag]

DO you not worry that you are putting all your eggs into one basket (or perhaps all your milk into one churn)?

Or do you see that sticking to what you know is best?

Best Wishes
Paper Tiger

Be careful you don't get milk on your whiskers, or do big cats prefer the whole cow.

[zigzag]

According to scribblings on my calendar, the interim result should be out by the end of the week. Should be interesting, as will any commentary from the Company.

[000831]

Let's start the party. Buyers come in.

[K1W1G0LD]

good to see the shareprice back up to $4 , long may it remain there. Now if SML clear the Chinese auditing process being undertaken and become a preferred NZ milk powder supplier the shareprice could really take off. Will be interesting also to see thursdays interim announcement.

[The BOWMAN]

good to see the shareprice back up to $4 , long may it remain there. Now if SML clear the Chinese auditing process being undertaken and become a preferred NZ milk powder supplier the shareprice could really take off. Will be interesting also to see thursdays interim announcement.

With a major Chinese diary company being the major shareholder, I would be very surprised that Synlait will not become a preferred NZ milk powder supplier. In fact I don't think any would expect anything else so I doubt the price will take off after that becomes reality.

[000831]

With a major Chinese diary company being the major shareholder, I would be very surprised that Synlait will not become a preferred NZ milk powder supplier. In fact I don't think any would expect anything else so I doubt the price will take off after that becomes reality.

Bright Dairy is a stated owned Chinese firm. It is just the matter of time.

[zigzag]

With a major Chinese diary company being the major shareholder, I would be very surprised that Synlait will not become a preferred NZ milk powder supplier. In fact I don't think any would expect anything else so I doubt the price will take off after that becomes reality.

I know it's nit-picking but, a diary company? Hope the "Year of the Cow" works out well for all concerned.

[noodles]

Let's start the party. Buyers come in.
Party Over?

“This has resulted in the forecast FY2014 net profit after tax to be revised from a range of $30.0 to $35.0 million to a range of $25.0 to $30.0 million, but still ahead of the prospectus forecast of $19.8 million,” says Mr Milne.

[Airw0lf]

Party Over?

“This has resulted in the forecast FY2014 net profit after tax to be revised from a range of $30.0 to $35.0 million to a range of $25.0 to $30.0 million, but still ahead of the prospectus forecast of $19.8 million,” says Mr Milne.

I don't follow this stock very closely but I read the announcement this morning and checked the SP after work and it seems to me a 7% drop is a bit of an overreaction?

[MAC]

I don't follow this stock very closely but I read the announcement this morning and checked the SP after work and it seems to me a 7% drop is a bit of an overreaction?

The advice Synlait have been providing regarding the Chinese regulatory situation and the associated dip in customer demand over the last couple of months has been quite consistent. The SP run up from $3.60 over the last couple of weeks against this run of advice has been more the peculiarity.

[Airw0lf]

The advice Synlait have been providing regarding the Chinese regulatory situation and the associated dip in customer demand over the last couple of months has been quite consistent. The SP run up from $3.60 over the last couple of weeks against this run of advice has been more the peculiarity.

Thanks MAC. By China reg situation you mean the whole "preferred supplier" issue? Given that SML has Chinese ownership isn't this risk low? That's what I thought may have explained the buying up in fact, get in before SML is officially locked in?

[MAC]

NZ Herald, 29th January 2014:

"Penno said the changes were causing "considerable disruption" to Synlait in the short-term - as some Chinese infant formula customers were holding back on orders while the new measures were rolled out - and the company may not achieve its forecast target of 10,000 metric tonnes of infant formula and nutritional sales this financial year."

"Penno said the regulatory changes were "largely sensible" and Synlait was confident they would help the company meet long-term targets through expected volume growth from key customers in the Chinese market."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11193307

Some may interpret 'short term' like me as six to twelve months, but I can understand how for traders six to twelve minutes can be a long time, comes from too many energy drinks and having never got a second cookie as a child.

It's not one for me due to the escrow overhang and capacity ceiling concerns but I would agree that if you are looking for an entry point it may be a good dip to buy at the right time, in a couple of months perhaps.

many regards, Mac

[Billy Boy]

"capacity ceiling concerns"
Plse clarify MAC.
Excuse my ignorance
BB:)

[Fisherking]

NZ Herald, 29th January 2014:

"Penno said the changes were causing "considerable disruption" to Synlait in the short-term - as some Chinese infant formula customers were holding back on orders while the new measures were rolled out - and the company may not achieve its forecast target of 10,000 metric tonnes of infant formula and nutritional sales this financial year."


"Penno said the regulatory changes were "largely sensible" and Synlait was confident they would help the company meet long-term targets through expected volume growth from key customers in the Chinese market."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11193307

Some may interpret 'short term' like me as six to twelve months, but I can understand how for traders six to twelve minutes can be a long time, comes from too many energy drinks and having never got a second cookie as a child.

It's not one for me due to the escrow overhang and capacity ceiling concerns but I would agree that if you are looking for an entry point it may be a good dip to buy at the right time, in a couple of months perhaps.

many regards, Mac

....And from the same post:

“Our forecast FY2014 financial performance continues to improve and we expect the Company will benefit from both earnings growth in our value added categories and a favourable product mix for the remainder of this financial year. Assuming current market conditions prevail our FY2014 net profit after tax will be significantly ahead of the prospectus forecast of $19.8 million, and is forecast to be in the range of $30.0 to $35.0 million,” said Mr Milne.

Pretty difficult for investors to know either way really.

[BlackPeter]

Just looking through SML's latest report and see that their "Lactoferrin Extraction and Purification Facility" was due to be commissioned by March 2014. Can't find any related announcement - did I miss some update or are they overdue?

[K1W1G0LD]

Just looking through SML's latest report and see that their "Lactoferrin Extraction and Purification Facility" was due to be commissioned by March 2014. Can't find any related announcement - did I miss some update or are they overdue?

Blackpeter , see the last paragraph from Interim report below

The three growth initiatives under development during the six month period,
including the lactoferrin plant, drystore extension and blending and canning
plant are on track for commissioning on, or close to, their planned dates.
End CA:00248768 For:SML Type:HALFYR Time:2014-03-27 08:33:18

Might pay to email the company for more precise info.

[BlackPeter]

cheers - missed that. Might follow up with an email.

[Fisherking]

So the unaudited 2014 report is out, not sure if anyone has had a chance to review or has taken something different from what I did:

1. Picked up two new key 'customers', but have managed to sell minimal additional volume.
2. Milk supply for 2015 is sewn up; which can't be too difficult given the lack of volume growth
3. Continue to invest heavily in building/ plant/ equipment/ systems; which seems odd given lack of volume growth.
4. 2014 Net profit revised down (as announced earlier)
5. Missed almost every growth initiative target both in terms of time-frame and cost.
6. Considerable increase in revenue; due to commodity prices being high; the one thing that is mostly out of their hands.

It seems many of the cost blowouts have been due to a late decision to increase the initial scope. Not sure why this would occur so frequently or why scoping should be so far out in the first instance. Also have to ask why the focus on growing capacity when they are not managing to sell increased volume.

I'm aware of the (often mentioned) regulatory requirement changes in China, but the last I heard from Fonterra comment was they could not ever hope to keep up with demand.

does anyone take anything more positive from the report?

[forest]

So the unaudited 2014 report is out, not sure if anyone has had a chance to review or has taken something different from what I did:

1. Picked up two new key 'customers', but have managed to sell minimal additional volume.
2. Milk supply for 2015 is sewn up; which can't be too difficult given the lack of volume growth
3. Continue to invest heavily in building/ plant/ equipment/ systems; which seems odd given lack of volume growth.
4. 2014 Net profit revised down (as announced earlier)
5. Missed almost every growth initiative target both in terms of time-frame and cost.
6. Considerable increase in revenue; due to commodity prices being high; the one thing that is mostly out of their hands.

It seems many of the cost blowouts have been due to a late decision to increase the initial scope. Not sure why this would occur so frequently or why scoping should be so far out in the first instance. Also have to ask why the focus on growing capacity when they are not managing to sell increased volume.

I'm aware of the (often mentioned) regulatory requirement changes in China, but the last I heard from Fonterra comment was they could not ever hope to keep up with demand.

does anyone take anything more positive from the report?

I think its possible that present facilities are close to fully utilised. Management sees future growth potential accelerating faster then before. Management talked to bank(s) supplying funding and gets funding support for extra capital expenditure. Does this sound more positive to you? :)

[Fisherking]

I think its possible that present facilities are close to fully utilised. Management sees future growth potential accelerating faster then before. Management talked to bank(s) supplying funding and gets funding support for extra capital expenditure. Does this sound more positive to you? :)

Yes, much more positive, but is it correct?

From pg6: 'China will remain an important market to us due to growing consumer demand; however the policy changes have proved more disruptive than we had been expecting. For this reason we now forecast that our infant formula volumes this year will be similar to those achieved last year'.

[forest]

Fisherking I just read the HY14 report. I think the Chairman and John Penno MD in their report are trying to portray the above version. Thats the way I read it anyway. I do not know either of them so I find it hard to judge.
The fact that the funding seem to be in place for the extra capital expenditure makes me think that there is much positive growth to come after the capital expenditure is completed.

[K1W1G0LD]

Synlait Milk well positioned for China's regulation changes

9:21am, 28 Apr 2014 | GENERAL

The Ministry for Primary Industries expects Synlait Milk to receive registration by the Certification and Accreditation Administration of the People's Republic of China (CNCA) as an exporter of finished infant formula into China.

Regulation changes governing China’s infant formula industry come into force on 1 May 2014, aimed at lifting the quality standards required of manufacturers supplying that market.

Synlait Milk has been fully engaged in the process, choosing to position the Company around CNCA’s desire for international manufacturers exporting infant formula product to China to have committed milk supply, wet blending and spray drying, dry blending and consumer packaging on site.

Synlait Milk has also been working with its three brand partners Bright Dairy & Food Co, Ltd., New Hope Nutritional Foods Co., Ltd and The a2 Milk Company in anticipation Chinese officials would require a close association between the brand owner and the manufacturer.

Synlait Milk is now part of a group of New Zealand dairy manufacturing companies working through a process to achieve registration.

Synlait Milk’s recent interim report outlined the regulation changes were likely to result in a short term reduction on sales of finished infant formula and nutritional products into China, however it expects long term objectives to be achieved.

China is an important market for Synlait Milk with its finished infant formula business expected to be a significant earner in future.

Synlait Milk continues to work with its first tier multinational customers for the supply of infant formula ingredients and finished products outside of China

It's going to happen, just has'nt happened yet. lets see if any market reaction!!

[Xerof]

Synlait Milk well positioned for China's regulation changes

percy, have you got yourself another job? Spin doctor? :p