SML - Synlait Milk Ltd

[sb9]

Couple of articles relating Synlait re their operations.

http://www.voxy.co.nz/business/5/309576

http://www.voxy.co.nz/politics/5/309515

[hardt]

Seeing as it just hit my PT was floating the idea of skimming our profits now and *hopefully* pick up some more 5-10% lower.

Historically likes to consolidate in tight with the 30DMA, how much does it have left in the short term before it pulls back?

[Ggcc]

Well I may just go out for a beer. It seems to never stop going up............ for now

[minimoke]

Well I may just go out for a beer. It seems to never stop going up............ for now
By the time you get to the bar you'll be able to afford

[RTM]

I’ve just analysed my portfolio and it’s quite clear that I should only invest in stocks that begin with S. SCL, SEK, SKL SKO SML SUM, They have all been very good to me. No failures with S. On the flip side, I can not see a pattern for failures. PEB, TGH, etc.

[Beagle]

I’ve just analysed my portfolio and it’s quite clear that I should only invest in stocks that begin with S. SCL, SEK, SKL SKO SML SUM, They have all been very good to me. No failures with S. On the flip side, I can not see a pattern for failures. PEB, TGH, etc.

LOL This investment game is simple eh. The further you go into your list of S stocks the better they perform so the trick is to buy as many stocks beginning with S that you can find :D Seriously, looking out 5 years I struggle to find anything that I think is more certain to perform really well than Synlait and Summerset. Possibly ATM but its volatile !

[winner69]

Hamilton Hinden Greene took some clients to Synlait today

Neat photo of sparkling factory

Grant Davies (@G_T_Davies)
8/05/18, 4:27 PM
Great to take a few clients through the @synlait factory today. Really impressive operation pic.twitter.com/0qGR2e4kY4


https://twitter.com/g_t_davies/status/993709072544235520

[couta1]

LOL This investment game is simple eh. The further you go into your list of S stocks the better they perform so the trick is to buy as many stocks beginning with S that you can find :D Seriously, looking out 5 years I struggle to find anything that I think is more certain to perform really well than Synlait and Summerset. Possibly ATM but its volatile ! Possibly ATM, Lol is the Pope Catholic.PS-Dont own any S thingies.

[RupertBear]

Possibly ATM, Lol is the Pope Catholic.PS-Dont own any S thingies.

Did you ditch your Synlaits to buy something more volatile Couta? :p

[couta1]

Did you ditch your Synlaits to buy something more volatile Couta? :p Certainly did, volatile is never boring.

[Beagle]

Possibly ATM, Lol is the Pope Catholic.PS-Dont own any S thingies.

S Thingies are good mate. Think about it...what other nice words are there that start with S. Safe, steady, secure, stable, sensible, steadfast, serene, sanctuary, this S Stuff is seriously good stuff mate, you know you want too, go on, seize the day and secure your future :D
In all seriousness though, I do see good strong EPS growth for Synlait in the years ahead and their PE is not expensive. I think they'll be one of the quiet super achievers of the NZX over the next few years.

[Beagle]

Synlait being added to the MSCI small cap index, also THL, RBD and Mercury.

[minimoke]

Synlait being added to the MSCI small cap index, also THLLooks like I got that trifecta then (along with ATM). Just waiting for portfolio to hit 30% growth this year - should do it this afternoon.

[Beagle]

Looks like I got that trifecta then (along with ATM). Just waiting for portfolio to hit 30% growth this year - should do it this afternoon.

Chris Lee gave Synlait a good write-up yesterday too.

[tzbang]

Excuse my newbyness.. :-( ...but what exactly does being added to the MSCI small cap index entail? How does that affect the stock? (I also have the trifeta but can't celebrate unless I understand the significance).

[Beagle]

Excuse my newbyness.. :-( ...but what exactly does being added to the MSCI small cap index entail? How does that affect the stock? (I also have the trifeta but can't celebrate unless I understand the significance).

Global index tracking funds have to buy in to include in their tracking portfolio's. Its leads to significant buying pressure.
Have a look at the market depth in the last 15 minutes of trading on 31 May 2018 and you'll see what I mean.
SP highly likely, (not certain) to head north between now and close of business on that date.
How likely ? I'm buying more this morning so that speaks for itself in term of my opinion which is based on evidence of what I have observed with the substantial volume of buying on previous index changes.

[Ggcc]

Well this is going up nicely!! Only one million shares being traded

[Beagle]

Well this is going up nicely!! Only one million shares being traded

LOL. Its time for this one to shine. Was around $8.30 in October last year so its not like the horse has bolted...yet !

[sb9]

Well this is going up nicely!! Only one million shares being traded

Here are those big crossings...



1
84
12:37:32 pm
1040
100,000
$1,040,000
Off market


2
83
12:31:54 pm
1040
734,111
$7,634,754
Off market


3
82
12:31:52 pm
1038
5,948
$61,740
Off market

[minimoke]

Here are those big crossings...



1
84
12:37:32 pm
1040
100,000
$1,040,000
Off market


2
83
12:31:54 pm
1040
734,111
$7,634,754
Off market


3
82
12:31:52 pm
1038
5,948
$61,740
Off market



All being well $10.40 should be the floor.

[Beagle]

All being well $10.40 should be the floor.

I think so. Got my snout into some more in the 1020's range this morning. Not just the early "bird" that gets the worm :)

[minimoke]

I think so. Got my snout into some more in the 1020's range this morning. Not just the early "bird" that gets the worm :)
Different approach to me. I bought at $7.75 and they started to dip. Doubled down and bought more at $6.80. And they continued to fall so had to back myself and bought more at $6.47. Now I am just sitting steady. (Always pays to listen to what posters on these forums have to say!)

[Beagle]

Good on you mate. I've been a little bit skittish with this one but definitely on board for the long haul now and in decent numbers. Thankfully I've a better track record of holding ATM. Got to get some more liquid refreshments in for this evening looking at the price now :)
Chart looking very promising.

[minimoke]

Thankfully I've a better track record of holding ATM. .SML currently up 5% for the day, ATM down 1.5% so far. Both get included in MSCI indexes. go figure!

[sb9]

SML currently up 5% for the day, ATM down 1.5% so far. Both get included in MSCI indexes. go figure!

May be they both trying to catch up on price parity...how about $13 for both :p

[couta1]

May be they both trying to catch up on price parity...how about $13 for both :p HaHa, A2 has stacks more potential than SML, the difference being that A2 is the Game of Thrones stock ,whilst SML is like a long game of Monopoly with long periods being stuck in jail.

[Beagle]

HaHa, A2 has stacks more potential than SML, the difference being that A2 is the Game of Thrones stock ,whilst SML is like a long game of Monopoly with long periods being stuck in jail.

SML has really excellent growth prospects both through its arrangements with ATM and many other initiatives and is on a MUCH lower PE.
Forget the past boredom mate, its time to giddy-up on this one now.

[couta1]

SML has really excellent growth prospects both through its arrangements with ATM and many other initiatives and is on a MUCH lower PE.
Forget the past boredom mate, its time to giddy-up on this one now. I'll leave it up to you ride this mount mate, I've become even more undiversified after loading up with more A2 lovelies today, think I'd better stop now or I might start scaring myself.

[Yoda]

SML has really excellent growth prospects both through its arrangements with ATM and many other initiatives and is on a MUCH lower PE.
Forget the past boredom mate, its time to giddy-up on this one now.
Thanks beagle, i think that is advice to be considered by all..prudent .

[winner69]

May be they both trying to catch up on price parity...how about $13 for both :p

Might get your parity sooner than you thought

[Nasi Goreng]

Might get your parity sooner than you thought

LOL. SML holding up pretty well today. Wonder what number crunching ATM and SML results might produce. Someone somewhere must have a formula.

[ratkin]

Only 10 cents between them now. Would not have believed that was possible a year ago

[minimoke]

LOL. SML holding up pretty well today. Wonder what number crunching ATM and SML results might produce. Someone somewhere must have a formula.Down 7%. only number crunching I'm doing is how much to put back into SML and into ATM

[sb9]

Looks like someone is happy to accumulate more weaker price, almost 1.7mln shares traded so far.

[minimoke]

Looks like someone is happy to accumulate more weaker price, almost 1.7mln shares traded so far.I'm happy to accumulate as well. Price is just a bit rich for me, even at this discounted rate.

[BlackPeter]

I'm happy to accumulate as well. Price is just a bit rich for me, even at this discounted rate.

That's what I thought as well when the share was at $3 roughly eighteen months ago.

All the best waiting for a further drop ... but it didn't work out for me ;) at that stage;

[minimoke]

That's what I thought as well when the share was at $3 roughly eighteen months ago.

All the best waiting for a further drop ... but it didn't work out for me ;) at that stage;I'm not desperate for a top up as I am already "well positioned" and even after todays carnage I'm still up 45%.

[minimoke]

I said to myself "must watch my open orders" as I got handed a few extra ATM's. Sholda coulda been watching SML as I now have a few more of these as well. Looks like the A2M blowtorch is being applied to SML.

[IAK]

I said to myself "must watch my open orders" as I got handed a few extra ATM's. Sholda coulda been watching SML as I now have a few more of these as well. Looks like the A2M blowtorch is being applied to SML.

Same thing hapened to me, was down at the gym checked my emails, and got a trade notification at $10 from ASB securities lol.

[minimoke]

Lets just bump as a reminder that SML enters the MSCI Small Cap Index on 31 May. I'll pick a close of $11.50

[Beagle]

Lets just bump as a reminder that SML enters the MSCI Small Cap Index on 31 May. I'll pick a close of $11.50

I'll have a bottle on standby for that :)

[sb9]

Just bumping this to front page where it belongs....lest we forget :)

[Ggcc]

And she’s rising and fast

[couta1]

And she’s rising and fast Hope you guys are selling out while it's at an over inflated price Lol. PS-Youd have to be off your rocker to pay these prices.

[minimoke]

Theres my $11.50 target for close

[Beagle]

Lets just bump as a reminder that SML enters the MSCI Small Cap Index on 31 May. I'll pick a close of $11.50

Already there and we're not even into the match process yet. Looks like this stock is ready to blast off to Jupiter !

[Ggcc]

Or is it? Who knows. I think Xero is overvalued, but it keeps going up in value.......

[RTM]

Hope you guys are selling out while it's at an over inflated price Lol.
What a day. Blue sky’s, no wind, Lovely 3kg snapper this morning for dinner tonight, afternoon on the chipper and I come in to find Synlait @ 11.50....up >350%! Will it hold tomorrow ?
Perfect !

[Beagle]

Snapper Hmmmm....now there's an idea for dinner, won't be as fresh as your's though :)

[couta1]

Snapper Hmmmm....now there's an idea for dinner, won't be as fresh as your's though :) After you sell all your SML, youll be taking your wife out to a flash restaurant.

[RTM]

After you sell all your SML, youll be taking your wife out to a flash restaurant.

That’s a really good idea Couta. We should celebrate it. I’ll let you know how it goes !

[minimoke]

Just to be fair, I have posted the following on anohter forum

While people have been focusing on the MSCI index inclusion today I have been asking questions of Synlait.

Their response in my view is a total crock of sh1te, totally unhelpful as an investor and totally inadequate.

I have asked a series of questions about M Bovis on farms that supply Synlait. They will not respond to my questions siting (with no reference) an agreement with MPI not to publish information that might breach the privacy of the farmer.

So lets be very clear. I did not ask for personal information that would identify a private individual. Further more MPI has already named one farmer – the one in the Waikato. MPI are also encouraging farmers to talk to their neighbours and fellow farmers. Personal information is either private or its not. If it is you don’t go talking to your neighbours. Additionally, I could go to any mid Canterbury pub and find out the information. And if that failed all I need to do is drive down the roads and look for the signs stuck on fences and gates.

Anyone who hides behind the Privacy Act has, in my view something to hide. So what is Synlait hiding. The only thing I can think of is that they have at least one farm (out of the seven so far identified in Mid Canterbury) which is infected. For me it is now not a matter of if, its how many.

I have no confidence that the governments plan to eradicate will work. I have not heard any information for Synlait giving me confidence their suppliers are not affected. Given Synlaits South Island 200 or so suppliers are within 80km of their plant and within an infection zone I am concerned. Given they arel ooking for suppliers in the Waikato where there is also an outbreak I am concerned. Given apparent known stock movements in these areas I am concerned.

I’d point out that Synlait were very quick to quell market concerns about ATM;s agreement with Fonterra. Their silence on this matter concerns me.

Disc. I hold both ATM and SML. Both sets of capital are now under preservation review with an immediate tightening of stop losses.

[kiora]

Hi MM
They also don't drink & invest :)
Re " Further more MPI has already namedone farmer – the one in the Waikato"
Henk Smit actually stood up himself at a farmer meeting & said his farm was affected

[Leftfield]

I have no confidence that the governments plan to eradicate will work. I have not heard any information for Synlait giving me confidence their suppliers are not affected. Given Synlaits South Island 200 or so suppliers are within 80km of their plant and within an infection zone I am concerned. Given they arel ooking for suppliers in the Waikato where there is also an outbreak I am concerned. Given apparent known stock movements in these areas I am concerned.


M.Bovis is sure a vexed topic for many.

However, I'm not sure your fears for SYM (and ATM) are justified;

1.) If M.Bovis is already established in most other countries, then it is more than likely ATM suppliers of Fresh Milk in UK, USA and Australia are already 'contaminated'. I'm not aware that this has been an issue for them in those countries.
2.) I liken M.Bovis to a 'weakness' that means infected cows are more likely to get (say) arthritis. This may mean less 'healthy' cows, but it doesn't effect the milk or the meat.
3.) In the end, ensuring their cows are more 'healthy' by selective breading and culling will impose costs on farmers, but again this does not effect milk quality.
4.) Famers seeking to mitigate their costs as they move to more 'healthy' herds are more likely to use this culling as an opportunity to move to A2 cows (because of the improved returns this offers.) Hence increasing supply opportunities for ATM and SYM.

Just my Left Field thoughts....DYOR.

[minimoke]

M.Bovis is sure a vexed topic for many.

However, I'm not sure your fears for SYM (and ATM) are justified;

1.) If M.Bovis is already established in most other countries, then it is more than likely ATM suppliers of Fresh Milk in UK, USA and Australia are already 'contaminated'. I'm not aware that this has been an issue for them in those countries.
2.) I liken M.Bovis to a 'weakness' that means infected cows are more likely to get (say) arthritis. This may mean less 'healthy' cows, but it doesn't effect the milk or the meat.
3.) In the end, ensuring their cows are more 'healthy' by selective breading and culling will impose costs on farmers, but again this does not effect milk quality.
4.) Framers seeking to mitigate their costs as they move to more 'healthy' herds are more likely to use this culling as an opportunity to move to A2 cows (because of the improved returns this offers.) Hence increasing supply opportunities for ATM and SYM.

Just my Left Field thoughts....DYOR.
M Bovis is a risk I am not so much concerned about. What concerns me is the failure by Synlait to inform the market of risk or management of their supply line during a time of a national cow crisis. As owners of the company give us the information and let us make decision based on that information. Don't leave us uninformed.

Its easy to be swept along on a wave of market euphoria. It takes your eye off the ball. We should not be investing on euphoria - it should be on the basis if a fully informed market.

[couta1]

M Bovis is a risk I am not so much concerned about. What concerns me is the failure by Synlait to inform the market of risk or management of their supply line during a time of a national cow crisis. As owners of the company give us the information and let us make decision based on that information. Don't leave us uninformed.

Its easy to be swept along on a wave of market euphoria. It takes your eye off the ball. We should not be investing on euphoria - it should be on the basis if a fully informed market. Like that good old song says, Take the Money and Run, after all you are sitting on big profits so if it really concerns you then exit.

[minimoke]

Like that good old song says, Take the Money and Run, after all you are sitting on big profits so if it really concerns you then exit. There also a saying "Let your winners a run and cut your losses short". I'm not about to cut off my nose to spite my face.

It is not a matter of exiting. I never base a buy / sell investment decision on one factor. Its about information and risk. The more information the better able I am able to measure risk. And vice versa. Traders are much better suited to trading euphoria and an information vacuum. But that's not me. Stop losses have been tightened.

[Beagle]

Hi minimoke,
Thanks for airing your concerns. I am not concerned as I think the loss in milk production won't be material and I think Synlait will continue to gain market share from Fonterra.

[minimoke]

Hi minimoke,
Thanks for airing your concerns. I am not concerned as I think the loss in milk production won't be material and I think Synlait will continue to gain market share from Fonterra.That is not my concern. My concern is a company that I don't think is updating the market on related information. We don't know if 1/200 of their suppliers are infected or 7/200 are. Mid Canterbury (and Waikato ) is absolutely riddled with farms identified as at risk through the tracing of animal movement. We dont know what the risk is because they aren't telling us. You may be happy in an information vacuum. I am measuring my risk with that vacuum. ( I also have an eye on MPI who I have pretty much zero faith in - take didymo for example Or wine for another)

[Beagle]

Never happy in an information vacuum but I've already taken steps to manage my exposure to risk, see latest comment in TNR thread.
I don't see it as a "material" risk. Materiality is defined in accounting standards to mean greater than or equal to 5% of net profit.
Even 7 / 200 is 3.5% and even if it is that high its not like all that 3.5% milk supply is going to stop overnight is it and farms after treatment only have to stay fallow for 60 days ! Plenty of new calves born every year for restocking mate. I think the media are whipping this up into something bigger than it really is...that's my 2 cents anyway but I do acknowledge you're closer to the problem so probably have a better handle on it.
I guess there's a huge amount of sensitivity about who is and who isn't affected which is why they can't possibly make more information public ?
Farmers down your way probably have other things on their mind today https://www.msn.com/en-nz/news/national/winter-has-come-91°c-recorded-in-central-otago/ar-AAy50df?li=AAaeXZz&ocid=spartandhp

[Sideshow Bob]

Farmers down your way probably have other things on their mind today https://www.msn.com/en-nz/news/national/winter-has-come-91°c-recorded-in-central-otago/ar-AAy50df?li=AAaeXZz&ocid=spartandhp

They breed them tough in Ranfurly - at -9.1C they might almost be considering putting on a woolen jumper....

[ratkin]

We are at peak cow according to labour. Shareprice has peaked and cows have peaked

[minimoke]

Hi minimoke,
I am not concerned as I think the loss in milk production won't be material and I think Synlait will continue to gain market share from Fonterra.
You should not be "thinking". You should know.

I'm back to being a happy camper again as I have heard from Synlait again this morning. They say some suppliers are located in areas affected by M bovis and currently there is no material impact on Synlait milk supply. Also M Bovis does not affect their ability to meet demand.

So I am no longer operating in an information vacuum - I feel this has now been de risked to some extent.

​​​​​​​Good on Synlait for keeping me updated.

[sb9]

You should not be "thinking". You should know.

I'm back to being a happy camper again as I have heard from Synlait again this morning. They say some suppliers are located in areas affected by M bovis and currently there is no material impact on Synlait milk supply. Also M Bovis does not affect their ability to meet demand.

So I am no longer operating in an information vacuum - I feel this has now been de risked to some extent.

​​​​​​​Good on Synlait for keeping me updated.

Nice one MM. Thanks for your efforts in communicating with SML and also their assurance around current scenario.

[nzsharetrade]

Did you ask the question as a shareholder or just a general public enquiry? I thought they can fully ignore you if they want/like either way.

[minimoke]

Did you ask the question as a shareholder or just a general public enquiry? I thought they can fully ignore you if they want/like either way.I asked as a shareholder. It would be a pretty poor company that did not respond, in some way to an inquiry from one of its part owners.

[Sideshow Bob]

We are at peak cow according to labour. Shareprice has peaked and cows have peaked

Could be interesting times if they can squeeze numbers. More stainless being added in Southland with Mataura Valley and in the North with Happy Valley, so if numbers start to level off/drift down, then pressure could start to come on supply, a la the Meat Industry.

However having said that, performance per cow could increase, or more emphasis on added value than added quantity.

[Beagle]

You should not be "thinking". You should know.

I'm back to being a happy camper again as I have heard from Synlait again this morning. They say some suppliers are located in areas affected by M bovis and currently there is no material impact on Synlait milk supply. Also M Bovis does not affect their ability to meet demand.

So I am no longer operating in an information vacuum - I feel this has now been de risked to some extent.

​​​​​​​Good on Synlait for keeping me updated.

I guess the optics of this thing is right in your face down there so I understand your need for more clarity and colour around this issue and its good that Synlait are responsive to shareholder enquiries.

I think "peak cow" is a figment of some greenie politicians imagination.

[Ggcc]

Milk supply will be sourced from the Waikato region from 1 June 2019 and
Synlait will grow their a2 Milk(TM) and Lead With Pride(TM) programmes
through new suppliers.

Love this bit in their announcement

[Beagle]

Milk supply will be sourced from the Waikato region from 1 June 2019 and
Synlait will grow their a2 Milk(TM) and Lead With Pride(TM) programmes
through new suppliers.

Love this bit in their announcement

https://www.nzx.com/announcements/319620
Increased capacity of Pokeno facility to meet demand also caught my attention. Excellent growth prospects over the years ahead, from among other things, more and more disenfranchised Fonterra suppliers jumping ship. Don't you just love love the call center contact number for interested farmers looking to supply Synlait
0800 ADD VALUE...I got a huge smile from that, really made my morning so far :)

[minimoke]

This is the bit "The functionality of Synlait's first nutritional spray dryer at Pokeno has also been expanded as a result of forecast customer demand………and the capacity has increased to 45,000 metric tonnes (MT) from an initial 40,000 MT"

[hamish]

Wow - That 0800 ADD VALUE is priceless.

The front cover and back cover of the last results report caught the eye and was clever also ie. In big Bold print.. TO: DATE (front page) and TO:BE CONTINUED (back page). Indicates, they are on a strategic path and are confident of the future..

[Sideshow Bob]

That phone number is gold - it is shoving it under the competitors nose, especially as Fonterra are under the gun from NZ First and also a little from farmers. Been a bit of scrutiny of late in the Farmers Weekly:

https://issuu.com/farmersweeklynz/docs/farmers_weekly_nz_june_11_2018/1?ff=true&e=30768707/62169149 (Pages 4 & 5)
https://issuu.com/farmersweeklynz/docs/01-51_fw_04-06_issuu/1?ff=true&e=30768707/61932637 (Pages 18-20)

However having said that, a lot easier to be nimble when much much smaller than Fonterra, not a coop, not under the gun for anything wrong with the dairy industry, not having to give new entrants/competitors milk etc. Can easily get small amounts into niche markets - Fonterra might be doing well but when probably 10-20x bigger than any NZ competitors, hard to match and always going to be more reliant on commodity trade. Compare them to Tatua - ouch, but completely other end of the spectrum.

[Beagle]

I would suggest 0800 ADD VALUE is rubbing their nose right in it lol

[minimoke]

A bit surprised to see zero interest from the market at the moment. no trades since 10:00am

Market comes to life at 12:00 when the Australians wake up - perhaps they haven't read the news yet.

[sb9]

Well news just in courtesy of HC.

Bell Potter revised their tp up to A$ 11.70 from previous A$ 10.80 with buy rating.

That’s about NZ$ 12.60 based current fx cross rate.

Their revision was prompted from SML’s announcement re their Pokeno plant production details.

[sb9]

Synlait names ex-Fonterra executive Leon Clement as CEO...

https://www.nbr.co.nz/article/synlait-names-ex-fonterra-executive-leon-clement-ceo-jr-216538

[777]

ex Fonterra does not full me with confidence.

[minimoke]

ex Fonterra does not full me with confidence.After a global search, gotta say I was a bit underwhelmed

[hardt]

Working at Fonterra since 2002, Fonterra wasn't always an underperformer and has come a long way since... then this fella jumps ship to the next 5bn+ dairy giant.

[sb9]

After a global search, gotta say I was a bit underwhelmed

The appointment might appear like that on the face of it but I'm sure he's got more calibre and know the local dairy industry thoroughly.
I wouldn't draw any foregone conclusions with his earlier association with Fonterra being a negative one, on the other hand see it positive as he would've learnt a lesson or two on how not to screw up things like his ex employer did.

[Beagle]

Fair to say he wasn't the guy at the top so could be extremely frustrated with how things have been going at Fonterra like a lot of others are.

0800-ADD VALUE - I think he must like the national call center number too :)

[sb9]

https://www.ruralnewsgroup.co.nz/dairy-news/dairy-general-news/synlait-starts-milk-drive

[jg8512]

After a global search, gotta say I was a bit underwhelmed

I suspect a lot of people at Fonterra know what they would like to do. ie, add value, rather than just be the world low-cost swing producer of milk powders, but a number of features of Fonterra constrain their ability to do this in practice. eg. its massive size where even large-ish value-add successes don't move the dial; the co-op structure with low profit retention for reinvestment; farmers risk appetite (many are massively personally indebted so would prefer cash in the hand, to two birds in the bush); Fonterra's difficulty in building businesses which would compete with key customers (Nestle etc); Fonterra's confused strategy (eg, given how much milk they already collect in NZ, why develop milk pools in more markets when they struggle to add value to all the existing NZ milk collected).

So maybe this guy knows exactly what he wants to do, wanted to do it at Fonterra but was frustrated by some of the above factors, and now he is a Synlait he can do what he's always wanted to do. And at Synlait he'll find and be supported by a company, board and mgmt. already a way down the road to adding value to milk.

[nzsharetrade]

seems this new CEO is boosting the SP up.:eek2:

[minimoke]

seems this new CEO is boosting the SP up.:eek2:Market reaction wasn't so flash yesterday. Maybe they are moving form "underwhelmed" to "neutral" to "positive"

[Nasi Goreng]

I’ve been really impressed with the way SML have delivered strong results over the last couple of years, there has been a noticable shift in professionalism from the company in line with growing results which is good to see.

With strong cashflow generation I can see the business growing significantly every five years as they reinvest in new plant plus new products/markets.

Happy to be a long term holder here.

[sb9]

From today's NBR:

Why Synlait chose Fonterra executive for top job....

Could someone summarise key points pls.....

[sb9]

Some big crossings going on at 11.50, more than 2mln shares crossed so far.

[winner69]

Some big crossings going on at 11.50, more than 2mln shares crossed so far.

I never know whether ‘big crossings’ are a positive or a negative for a stock ...or is it just normal activity that is sort of neutral

Still learning

[minimoke]

I never know whether ‘big crossings’ are a positive or a negative for a stock ...or is it just normal activity that is sort of neutralI cant figure it either. Why would you quit at $11.50?

[nzsharetrade]

can anyone see this 2m transaction? can not find it from snm.

[Ggcc]

can anyone see this 2m transaction? can not find it from snm.
Big transaction and who knows? Again I think is A2 buying more of Synlait?

Long term it would be great to own the manufacturer of your many products to come and own a large chunk of them. I think these two shares are very similar, except Synlait have lower margins and higher sales.

Last year Synlait sales grew >50% I believe and with many more increases happening in the future with their new plant opening. I am happy to own both and would rather have no dividends from either for a while and maintain their dominance in growth. Apparently in 5 years China will only accept A2 products...... let’s use those 5 years to focus only on growth and watch the sp skyrocket!!!

[jg8512]

From today's NBR:

Why Synlait chose Fonterra executive for top job....

Could someone summarise key points pls.....

The key point was .... he knows how to deal with a crisis. He headed Fonterra Sri Lanka when a food safety scare erupted there a few years back.
And managed some flap in Vietnam when he was there, too.

The article didn't really match the headline for mine - I hope they didn't pick him just because he could manage a crisis: it would seem preferable if he could manage the business in such a way so as to ensure there was no crisis to manage.

To me the (slightly) better story was that he had had previous substantial experience in doing business in asia, and given that is where I think much of Synlait's business is and was, that seems useful broad experience. I think I read too that his sole experience at Fonterra was running branded goods operations, not commodities - again, that seems a good (albeit obvious) signal of how Synlait differs from Fonterra

[sb9]

The key point was .... he knows how to deal with a crisis. He headed Fonterra Sri Lanka when a food safety scare erupted there a few years back.
And managed some flap in Vietnam when he was there, too.

The article didn't really match the headline for mine - I hope they didn't pick him just because he could manage a crisis: it would seem preferable if he could manage the business in such a way so as to ensure there was no crisis to manage.

To me the (slightly) better story was that he had had previous substantial experience in doing business in asia, and given that is where I think much of Synlait's business is and was, that seems useful broad experience. I think I read too that his sole experience at Fonterra was running branded goods operations, not commodities - again, that seems a good (albeit obvious) signal of how Synlait differs from Fonterra

Appreciate your summary jq8512, thanks for that.


can anyone see this 2m transaction? can not find it from snm.

It was not all in one transaction, if I remember correctly there were tranches of 200k, 400k, 50k and in those multiples. SNM wipes out old transactions with latest ones and you cannot see previous trades once they're populated with latest trades.

[Hectorplains]

They're nailing their green credentials to the mast.

https://www.asx.com.au/asxpdf/20180628/pdf/43w3y7x3xlmhnb.pdf

It's a comprehensive approach. Good stuff!

[Ggcc]

https://hotcopper.com.au/documentdownload?id=uOMxKKzFkiWRTLKhOROKAxjvSDYD6w i%2FwRGZs%2FoIke92GA%3D%3D

I don’t know if these stats are still correct, but how much of Synlait is owned by the Chinese shareholders?

[Hectorplains]

https://hotcopper.com.au/documentdownload?id=uOMxKKzFkiWRTLKhOROKAxjvSDYD6w i%2FwRGZs%2FoIke92GA%3D%3D

I don’t know if these stats are still correct, but how much of Synlait is owned by the Chinese shareholders?

Yep, they still have close to 40%

[Hectorplains]

They're nailing their green credentials to the mast.

https://www.asx.com.au/asxpdf/20180628/pdf/43w3y7x3xlmhnb.pdf

It's a comprehensive approach. Good stuff!

Here's why rejecting PKE matters: https://news.mongabay.com/2018/04/indonesian-billionaire-using-shadow-companies-to-clear-forest-for-palm-oil-report-alleges

Bad politics, ecological disaster.

[IAK]

Well done Synlait, industry lesders.

[sb9]

Another step in right direction in process of building a great company...

https://www.ruralnewsgroup.co.nz/dairy-news/dairy-general-news/synlait-s-progressing-on-methane-in-ruminants

[minimoke]

Damn Ebert Construction gone into receivership. They are finishing the Dunsandel PLant (by December) and about to start the Pokeno plant due for commissioning Sept 2019. This is likely to but a brake on things. Looking forward to a company announcement.
(as an aside - another major construction company in the ****. What on earth is happening to this industry. In the best of times they cant do a decent job - what are they going to be like in harder times. Does not bode well for NZ!)

[Beagle]

My understanding mm is their is a really critical shortage of qualified staff right across all aspects of the building industry. If you can't get good staff some companies end up hiring poor quality staff and that's when the problems really start.

[minimoke]

My understanding mm is their is a really critical shortage of qualified staff right across all aspects of the building industry. If you can't get good staff some companies end up hiring poor quality staff and that's when the problems really start.I dont disagree - but there is no excuse. After the CHCH earthquakes it was plane as day that we (NZ) would have to re-ignite an apprenticeship programme and put current workers on professional development to upskill them. Its been over 6 years. Apprentices and degree qualified people should be pouring out of tertiary institutes. In the absence of that - there is no shortage of offshore people looking for work. ChCh has gone flat - what has been done to soak that resource up?

Likely future production is built into current price. I cant see SML now meeting those targets.

I know I am a worry wart so if there is no announcement from SML on this issue today I will be sending them a "Please Update" tonight.

In the meantime happy to hold my gains and content with long term picture. Not panicking to sell just yet.

[Beagle]

http://www.scoop.co.nz/stories/BU1807/S00762/risk-management-the-most-critical-issue-for-construction.htm

Another view. I couldn't agree more mm. You'd be forgiven for thinking most building companies can't think further ahead than their current or at best, next contract. The woeful lack of apprenticeships and training is coming back to haunt the industry and N.Z. Inc in a major way.

For what its worth I am not panicking about this either. Yes it will cause a delay but I am focused on the long term.

[peat]

Hard to see how this won’t affect the growth plans at least in the short term.
Will be a good challenge for management and something to monitor their performance with

[Beagle]

See latest announcement to the NZX that's just come out. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/321577/283697.pdf
Tetra Pak is a major multi national company, see here https://www.tetrapak.com/

There could be some modest delay to these two projects while another construction contractor is sorted out. I am happy to hold for long term growth.

[BlackPeter]

See latest announcement to the NZX that's just come out. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/321577/283697.pdf
Tetra Pak is a major multi national company, see here https://www.tetrapak.com/

There could be some modest delay to these two projects while another construction contractor is sorted out. I am happy to hold for long term growth.

Actually - this is very good news. This way it is not Synlait which needs to manage the contractor change (and carry any penalty), but Tetra Pak. They are big enough to weather these minor contractor issues in some small island in the South Pacific ;) without problems;

[Patient Panda]

See latest announcement to the NZX that's just come out. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/321577/283697.pdf
Tetra Pak is a major multi national company, see here https://www.tetrapak.com/

There could be some modest delay to these two projects while another construction contractor is sorted out. I am happy to hold for long term growth.

some rolls royce de ja vu for you eh Beagle :D

[Beagle]

Actually - this is very good news. This way it is not Synlait which needs to manage the contractor change (and carry any penalty), but Tetra Pak. They are big enough to weather these minor contractor issues in some small island in the South Pacific ;) without problems;

Pretty much how I see it too BP. Actually thinking about it a bit more as you quite rightly allude too, its likely there would be penalty clauses in terms of late delivery written into the contract with Tetra Pak so at least some of the pain of any delay probably rests with them.

[Beagle]

some rolls royce de ja vu for you eh Beagle :D

Yeah that problem isn't going to be fully resolved anytime soon either. Always plenty of challenges in business, but I tell myself (glass half full) that good companies work around challenges and mitigate the effect of them and still make good results whereas bad companies just make excuses. Hopefully this and AIR are in the former category !

[minimoke]

Actually - this is very good news. This way it is not Synlait which needs to manage the contractor change (and carry any penalty), but Tetra Pak. They are big enough to weather these minor contractor issues in some small island in the South Pacific ;) without problems;Agre. Also good news that SML management ought not be distracted in tryng to find a new contractor. They can keep on focussing on core business.

(ALso top marks for market update - saves me an email tonight. Much better response than the M Bovis one. Good on them)

Happy Holder

[winner69]

One thing is that the new Pokeno plant will probably cost heaps more than planned.

[Joshuatree]

I dream of tetrapak being a listed company and that i bought early, :sleep::drool::closed eyes::drool::closed eyes::closed eyes:

https://www.tetrapak.com/ (https://www.tetrapak.com/)

[BlackPeter]

One thing is that the new Pokeno plant will probably cost heaps more than planned.

What makes you think that? It hasn't been flagged as one of Eberts "problem" projects.

[minimoke]

What makes you think that? It hasn't been flagged as one of Eberts "problem" projects.
Anyone care to point to a construction project that finished on time and on budget? (dontr get me started on the Christchurch Town Hall and our other local construction projects - metro centre didnt even get off the ground due to costing heaps more than planned)

[777]

https://www.stuff.co.nz/business/farming/105930546/tetra-pak-determined-to-see-synlait-pokeno-dairy-factory-completed

[Valiant]

What makes you think that? It hasn't been flagged as one of Eberts "problem" projects.

In the likely case that Tetra Pak need to find a new Contractor to undertake the design & build of the Pokeno site, you would expect that costs increase due to 'escalation' that is present in the market at the moment. Any costs associated with bringing in a new Contractor should sit with Tetra Pak and basedc on yesterdays SML announcement I believe that to be the case.

[winner69]

What makes you think that? It hasn't been flagged as one of Eberts "problem" projects.

Probably a new contractor .....and one who probably won’t operate on thin or non existent margins

Only 5% through the whole design and build process I heard ....maybe hadn’t even got to the pricing of the construction stage anyway

[forest]

Minimoke I believe that RYM, retirement villages are normally constructed with minimal delays or budget blowouts.

[sb9]

In the likely case that Tetra Pak need to find a new Contractor to undertake the design & build of the Pokeno site, you would expect that costs increase due to 'escalation' that is present in the market at the moment. Any costs associated with bringing in a new Contractor should sit with Tetra Pak and basedc on yesterdays SML announcement I believe that to be the case.

Absolutely, time overrun yes but not cost overrun. Plus they'll have cover for any liability arising out of project delays and associated compensation from Tetrapak.

[whatsup]

I dream of tetrapak being a listed company and that i bought early, :sleep::drool::closed eyes::drool::closed eyes::closed eyes:

https://www.tetrapak.com/ (https://www.tetrapak.com/)

One of Europe's oldest and most valuable companies.

[minimoke]

Minimoke I believe that RYM, retirement villages are normally constructed with minimal delays or budget blowouts.They speed up or slow down construction depending on demand. Makes it a bit of a moving target. (Disc - not suggesting RYM dont do a good job!)

[Beagle]

OCA been building in Auckland on time and on budget. It can be done but it is a truly remarkable feat especially at the moment !

[BlackPeter]

Anyone care to point to a construction project that finished on time and on budget? (dontr get me started on the Christchurch Town Hall and our other local construction projects - metro centre didnt even get off the ground due to costing heaps more than planned)

So - you mean it was one of these "the sun will rise tomorrow morning" statements?

While the statement about the sunrise is (highly likely) correct - the assumption about construction projects is not.

The majority of construction projects is completed within time and budget.

Here is a randomly selected performance report for construction projects in Florida:

http://www.fdot.gov/planning/performance/2015/2015OnTimeCore.pdf

more than 80% in time and more than 90% under budget does not sound bad, does it?

Obviously - it always depends against what you are measuring.

Against the untested and unchallenged wishes of a politician? Sure, these guys are unqualified, incompetent and have a conflict of interest.

But measure against a thoroughly reviewed list of requirements and detailed design and its not that hard to deliver in time and under budget.

TetraPak is a highly successful and experienced company developing packaging solutions not just for Synlait. That's not a one off, but the solutions come basically "off the shelf". What makes you think they don't know what they are doing?

[minimoke]

So - you mean it was one of these "the sun will rise tomorrow morning" statements?

While the statement about the sunrise is (highly likely) correct - the assumption about construction projects is not.

The majority of construction projects is completed within time and budget.

Here is a randomly selected performance report for construction projects in Florida:Your post might have more value if you referenced NZ.

Somewhere there is a KPMG report that will show in 2010 just over half construction projects came in on time, within budget and in scope. By 2013 this had dropped to 31% and by 2017 had dropped to 29%.

I'll try to source reference but consider since then Fletchers have nearly gone tits up, Hawkins have gone, Ebert obviously (along with Maven Interiors in Christchurch yesterday)

[BlackPeter]

Your post might have more value if you referenced NZ.

Somewhere there is a KPMG report that will show in 2010 just over half construction projects came in on time, within budget and in scope. By 2013 this had dropped to 31% and by 2017 had dropped to 29%.

I'll try to source reference but consider since then Fletchers have nearly gone tits up, Hawkins have gone, Ebert obviously (along with Maven Interiors in Christchurch yesterday)

Never worry about the value of my post as long as you haven't looked into yours :p;

You didn't asked for NZ projects ... but apparently - if even according to your reference still 29% of them come in on time and below budget, than your original question was obviously just baiting.

But as you say - little old NZ seems to be bad in constructing things on time and budget. So glad we have a European company responsible for the Synlait projects.

Maybe one can't fix everything with No 8-wire and she'll be right mentality, but this is clearly a discussion for a different threat.

[Valiant]

Absolutely, time overrun yes but not cost overrun. Plus they'll have cover for any liability arising out of project delays and associated compensation from Tetrapak.

Correct! If Synlait's development team are doing things right then the liquidated damages should cover any loss of income should the project be delayed.

[minimoke]

Kaboom - finally some goods news. SML up 4.6% to 1119



The a2 Milk Company ("a2MC") is pleased to announce it will increase its


shareholding in Synlait Milk Limited.





a2MC will acquire, through a subsidiary, an additional ~8.2% of the fully


paid ordinary shares in Synlait from Mitsui & Co. at a price of NZ$10.90 per


share for total consideration of ~NZ$161.8m. This represents a modest


discount to the NZX one month volume weighted average price of NZ$11.16.

[Beagle]

They wouldn't be paying that much if they didn't see significant value even at that price, so yes its great news.

[sb9]

They wouldn't be paying that much if they didn't see significant value even at that price, so yes its great news.

Its a cracker of news, they're now second largest holder after Bright Dairy and together both own more than 50% of Synlait. One can draw one's own conclusions as to what the future direction is for both A2 and SML.

[ratkin]

They wouldn't be paying that much if they didn't see significant value even at that price, so yes its great news.

Great news alright, now in A2s interest to make sure Synlait prospers, so no chance they take their orders elsewhere . Either that or they going for a takeover.

[Ggcc]

Great news alright, now in A2s interest to make sure Synlait prospers, so no chance they take their orders elsewhere . Either that or they going for a takeover.
17.39% owned by A2...... They must have been buying on market as well leading up to the announcement. Unless I have missed something

[Nasi Goreng]

Great news alright, now in A2s interest to make sure Synlait prospers, so no chance they take their orders elsewhere . Either that or they going for a takeover.

I think this goes both ways and solidifies the partnership. There could be a risk of A2 choosing another dairy factory to produce infant formula. Similarly, an equal risk of SML taking all that a2 milk and producing a2 milk formula for a competitor down the track.

Will there be a merger of sorts or buy out from a2 in a few years? I would say right now that a2 can't afford to splash out $1B+ for a dairy company without hurting their cash position so it makes sense that they have no further plans at this stage to acquire any more.

[winner69]

17.39% owned by A2...... They must have been buying on market as well leading up to the announcement. Unless I have missed something

Already had heaps from last year

Then bought 1.7m shares in April on market

And the Mitsui ones today

[Ggcc]

Already had heaps from last year

Then bought 1.7m shares in April on market

And the Mitsui ones today
Thanks that’s appreciated

[Beagle]

Already had heaps from last year

Then bought 1.7m shares in April on market

And the Mitsui ones today

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ATM/321685/283836.pdf
Contract contains interesting price escalation clause. I think we can take ATM's last sentence, that they're not interested in acquiring more, with a grain of salt.

[peat]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ATM/321685/283836.pdf
Contract contains interesting price escalation clause. I think we can take ATM's last sentence, that they're not interested in acquiring more, with a grain of salt.
sure, they’re not going to announce it but that escalation clause means that if they do - before March 2019, and the price is higher then they’ll have to pay more to Mitsubishi?

[minimoke]

Contract contains interesting price escalation clause. I think we can take ATM's last sentence, that they're not interested in acquiring more, with a grain of salt.
That last sentence can probably read " A2MC has not further plans to further increase its shareholding in SML until after March 2019 after which time we should have a bit more loot in our coffers to pay for it".

[Beagle]

That last sentence can probably read " A2MC has not further plans to further increase its shareholding in SML until after March 2019 after which time we should have a bit more loot in our coffers to pay for it".

:lol: Someone hand that man a beer.

[winner69]

sure, they’re not going to announce it but that escalation clause means that if they do - before March 2019, and the price is higher then they’ll have to pay more to Mitsubishi?

..only if they buy more in accordance with the Takeovers Code

[winner69]

Next purchase be smallish or a full takeover eh

[Beagle]

Next purchase be smallish or a full takeover eh

Yes. I think it suits ATM to bide their time for a while and play the long game. Some formula around 9% and the floor price of $10.90 in that escalation clause. I didn't have it in me to try and nut the fine detail out today. One good thing, obviously ATM is not concerned that Ebert's receivership poses a serious threat to Synlait's developments. That tells me all I need to know for now.

[percy]

Yes. I think it suits ATM to bide their time for a while and play the long game. Some formula around 9% and the floor price of $10.90 in that escalation clause. I didn't have it in me to try and nut the fine detail out today. One good thing, obviously ATM is not concerned that Ebert's receivership poses a serious threat to Synlait's developments. That tells me all I need to know for now.

I don't think Elberts had made a start.Just won the contract.

[777]

I don't think Elberts had made a start.Just won the contract.

It was in the link at post #1367

Construction of the factory was still in the early stages with earthworks underway and some concrete poured. Pooch said they were currently working with the receivers and exploring all options.

[Sideshow Bob]

Page 14. Take a swig of A2 milk and relax about construction.....

https://issuu.com/farmersweeklynz/docs/farmers_weekly_nz_august_6_2018/1?ff=true&e=30768707/63572666

[minimoke]

Have we reached bottom yet? I've no idea but decided I may as well have a few more. Sorry to holders - looks like i've taken another 0.4% off the value. Never mind. I'm still 36% up overall. I'm looking forward to next year and it will be worth even more.

[nzsharetrade]

finally, SML is taking its turn. I thought SML could escape from shorters.....

[sb9]

finally, SML is taking its turn. I thought SML could escape from shorters.....

https://www.nzx.com/announcements/322037

It could be Mitsui & Co, selling the remaining of their shareholding (179,223) on market. No way of knowing that though with certainty, just a guess.

[Beagle]

Remind me again, how much did ATM pay recently...
Disc: Topped up with some more today.

[minimoke]

Remind me again, how much did ATM pay recently...
Disc: Topped up with some more today.I topped up at $10.80 :(

And now have no more cash. Oh well. at least my ATM top up at $10.40 was worth it.

And bang head against wall to remind myself this is a long term play.

Edit: See the game players have returned to the paddock. up 4.8% to $10.90 in moments.

ATM / SML rollercoaster once again running on full steam.

[nzsharetrade]

Remind me again, how much did ATM pay recently...
Disc: Topped up with some more today.

that is instant 4%. :t_up:

[Beagle]

that is instant 4%. :t_up:


Was pretty silly at $10.30..even a flu ridden beagle with a blocked nose could smell an easy feed at that price. Probably still very good buying.

[petty]

I was too slow off the draw. I almost topped up at the same price Beagle but missed the chance. She went pretty quick.

Any news around?

[nzsharetrade]

Was pretty silly at $10.30..even a flu ridden beagle with a blocked nose could smell an easy feed at that price. Probably still very good buying.

haah. I was in the middle of topping up ATM.......the offer was half filled then it went up to the sky.........


seems BAL is a joke now. do you have a view on it?

[Beagle]

haah. I was in the middle of topping up ATM.......the offer was half filled then it went up to the sky.........


seems BAL is a joke now. do you have a view on it?

Got to be quick.
BAL starting to get interesting after being absolutely smashed from a high of $23 earlier this year. Analyst consensus forecast is 41 cps this year.
Not expensive any more on a PE basis but risks remain around accreditation and from a TA perspective the chart looks absolutely horrendous.
I don't follow closely but it could be an interesting one to watch if they do get the approval's they're seeking.
Who wants to catch a falling knife :eek2: Better to wait until the next confirmed uptrend

[nzsharetrade]

Got to be quick.
BAL starting to get interesting after being absolutely smashed from a high of $23 earlier this year. Analyst consensus forecast is 41 cps this year.
Not expensive any more on a PE basis but risks remain around accreditation and from a TA perspective the chart looks absolutely horrendous.
I don't follow closely but it could be an interesting one to watch if they do get the approval's they're seeking.
Who wants to catch a falling knife :eek2: Better to wait until the next confirmed uptrend

Thanks, Beagle. The Chart is crazy.

[limmy]

Bought at $10.31 yesterday for a long term hold. :)

[ratkin]

A guessing the declining NZ dollar is underpinning the latest rising, or is there something else going on?

[Beagle]

Bought at $10.31 yesterday for a long term hold. :)

Great buying at that price :t_up:

Spooky how this and ATM have been tracking each others SP's in recent times. Anyone would think their fortunes are inextricably linked ;)

[limmy]

Great buying at that price :t_up:

Spooky how this and ATM have been tracking each others SP's in recent times. Anyone would think their fortunes are inextricably linked ;)
I figured that if ATM was prepared to pay $10.90 for SML, then $10.31 was a good price for my 2300 shares. :)

[sb9]

https://www.nzx.com/announcements/322507

Nice to see management being proactive and providing reassurance. Top marks for them.

[minimoke]

https://www.nzx.com/announcements/322507

Nice to see management being proactive and providing reassurance. Top marks for them.Agreed - nice to see. Much happier seeing this sort of front footing rather than the initial silence over M Bovis.

Now looking forward to a positive ATM result and seeing that wash positively over SML

[Beagle]

https://www.nzx.com/announcements/322507

Nice to see management being proactive and providing reassurance. Top marks for them.

This is a very good announcement as its essential they get those new facilities up and running on time and on budget to achieve their growth ambitions.
Very happy with this announcement and a little surprised the market hasn't shown a bit more enthusiasm.

[BlackPeter]

Agreed - nice to see. Much happier seeing this sort of front footing rather than the initial silence over M Bovis.

Now looking forward to a positive ATM result and seeing that wash positively over SML

Agreed - good stuff.

However - black mark for NZX: amazing how they are able to copy


CONSTRUCTION CONTINUES AT SYNLAIT POKENO AND SYNLAIT DUNSANDEL

from the original announcement and change it into:


Construction continues at Synlait Pokeno + Synlait Dunsanel

instead of just doing a copy / paste. No wonder they are that inefficient ...

PS: particularly concerning given that Dunsandel is world famous in New Zealand ;);

Discl: Don't live in Dunsandel, but hey - one needs to look after the neighbours :);

[minimoke]

Agreed - good stuff.

However - black mark for NZX: amazing how they are able to copy



from the original announcement and change it into:



instead of just doing a copy / paste. No wonder they are that inefficient ...

PS: particularly concerning given that Dunsandel is world famous in New Zealand ;);

Discl: Don't live in Dunsandel, but hey - one needs to look after the neighbours :);Black mark - that requires an enquiry. If NZX get one character off a word how can we rely to get the numbers right when dollars are mentioned.

Dunsandel - World Famous for its door handle on the country store!

(Who says these threads are never educational!)

[nzsharetrade]

any news? heading $12.

[minimoke]

any news? heading $12.All these teeny wee trades bit by bit ratcheting the price up. Now $11.97 so lets see if they have an appetite to go to $12.

[Beagle]

Synlait pacing ATM's price...there a big surprise lol

[minimoke]

And there we have it $12.00. UNcharted territory.

[Beagle]

And there we have it $12.00. UNcharted territory.

Got to be worth a liquid refreshment tonight eh mate :)

[minimoke]

Got to be worth a liquid refreshment tonight eh mate :)I've been forced into a bit of moderation these past few weeks. But days like today will need an extra supply on hand!

Sellers drying up . A few at $12.01 and then all silent until $13.00. $24,000 total on sell side against $243k on buy side. Looking good!

[couta1]

I've been forced into a bit of moderation these past few weeks. But days like today will need an extra supply on hand!

Sellers drying up . A few at $12.01 and then all silent until $13.00. $24,000 total on sell side against $243k on buy side. Looking good! Simply following the A2 SP.

[nzsharetrade]

do we know how many shares on market for trade in %? ATM and CN would not sell their ones.

[minimoke]

Simply following the A2 SP.
Looks like milk is flavour of the day. (happy holder of both ATM and SML)

[Beagle]

do we know how many shares on market for trade in %? ATM and CN would not sell their ones.


minimoke and I are not selling either so that's 99% of the market cornered lol
Good question, I don't know, anyone else ?

[minimoke]

Those naughty bots. Now $12.29 - thats nuts

[couta1]

Those naughty bots. Now $12.29 - thats nuts If it's nuts, you sell.

[minimoke]

If it's nuts, you sell.Its now $12.35. Why sell

[couta1]

Its now $12.35. Why sell That's what I said to myself when A2 was $14.62.Lol.

[winner69]

So did the bot buy 255 at 1250 and then straight away sell them for 1225

[sb9]

minimoke and I are not selling either so that's 99% of the market cornered lol
Good question, I don't know, anyone else ?

+1 to that, I'm not selling either. You be mad to sell them this cheap :p

[limmy]

Both both stocks about 9 days ago, both below $11, definitely not selling. Long term hold, like all my other stocks.

[ratkin]

Whats going on? These rises not normal. takeover play or some big deal about to be announced?

[Beagle]

Whats going on? These rises not normal. takeover play or some big deal about to be announced?

Multi-choice for you tonight
A. Company reports on 19 September...investors positioning themselves ?
B. Share price playing catch up with ATM ?
C. Investors struggling to find a company with a more compelling and clearly defined growth plan at a half reasonable PE multiple ?
D. All of or some combination of the above ?
E. Stock in play ?

[ratkin]

Multi-choice for you tonight
A. Company reports on 19 September...investors positioning themselves ?
B. Share price playing catch up with ATM ?
C. Investors struggling to find a company with a more compelling and clearly defined growth plan at a half reasonable PE multiple ?
D. All of or some combination of the above ?
E. Stock in play ?

Not the first 4

[minimoke]

minimoke and I are not selling either so that's 99% of the market cornered lol
Good question, I don't know, anyone else ?
I'm not selling. Think today was just about best ever single day in the market. Had to put the trailer on the back of the Moke to stock up at the Liquor store with appropriate celebrant.

[Beagle]

Not the first 4

Okay I will do some wild speculation

ATM a nine billion dollar company.
Cost to takeover the 84% of Synlait it doesn't already own at a ~ 30% premium to today's closing price, say $16 a share = $2.39 billion.
From an investment banking perspective this looks like a deal that's quite plausible. ATM could undertake a placement and debt raising and / or a partial scrip based takeover and / or debt funding from banks.

The deal would probably fund itself on FY20 earnings from Synlait and be EPS accretive thereafter. It would also allow ATM over time to direct as much of Synlait's production as it wanted to its own purposes as Synlait's supply contracts to other infant formula companies ran their course.

Looks logical enough but good luck getting the Chinese to sell and minimoke and I.

Suppose it doesn't matter if they don't get to 100%, as long as they get control !

Time for a wee tipple to celebrate a good day.

[minimoke]

Intersting day tomorrow. ASX closed SML down and ATM up

[777]

Intersting day tomorrow. ASX closed SML down and ATM up

What day were you looking at?


Synlait SM1.ASX 66 Up 6.4% 1101 1100 1115 1130 1046 $2,030,475 185,456

[minimoke]

What day were you looking at?


Synlait SM1.ASX 66 Up 6.4% 1101 1100 1115 1130 1046 $2,030,475 185,456ASX A2m closed at $11.18 or NZD$12.25 against nzx close of $12.18.

ASX SM1 closed at $11.01 or NZD $12.06 against a NZX close of $12.20

[Beagle]

ASX A2m closed at $11.18 or NZD$12.25 against nzx close of $12.18.

ASX SM1 closed at $11.01 or NZD $12.06 against a NZX close of $12.20

Not much in that to worry about especially for those cunning enough to have a bob or two each way on both :)

[minimoke]

Any August months end index reshuffles coming up?

[Beagle]

September 21 - NZX50 index rebalance. With them reporting on the 19th...could be an interesting week.
Cheers :)

[ratkin]

I just think Synlait going up 6.4 % on a Monday is a little bit strange. It is either a sign the market has become irrational or something is happening.

[minimoke]

I just think Synlait going up 6.4 % on a Monday is a little bit strange. It is either a sign the market has become irrational or something is happening.
The best way of describing A2Milk (as a long term holder) is a roller coaster where you need to strap your self in tight and hang on for your life to get through its often daily rides. Probably no reason why now SML is not in the same amusement park. As a holder always pays to keep your eyes on teh long term horizon

[couta1]

I just think Synlait going up 6.4 % on a Monday is a little bit strange. It is either a sign the market has become irrational or something is happening. The market is often irrational and can also operate in a rational way from time to time.

[Beagle]

Few if any would try and make the argument that Synlait has below market average growth. In fact many would make the case their growth is well and truly above average, at least in the top quartile and I would argue there are very few companies listed on the NZX with such a clearly defined roadmap to future growth. We're in FY19 already and I find it quite interesting that according to average analyst forecast Synlait has a market average forward PE of 22 for FY19. Any wonder ATM has been increasing its stake ?

I think even at $12.20 they're very good value indeed for the growth on offer relative to the market.

[Beagle]

$12.35 this morning, exactly the same as ATM a moment ago when I looked...anyone would think their future fortunes are inextricably linked :)

[Ggcc]

Heading very quick to a higher amount. Maybe $12.50-12.75

[minimoke]

Heading very quick to a higher amount. Maybe $12.50-12.75Well , if you are in australia it is. Currently at AUD$11.72 or NZD $12.85. But here in the wild west that is the NZ Stock Exchange we sit on our arses unable to do a thing while they get the crank handle out to try and get our market moving again. This is ridiculous!

[Beagle]

Well , if you are in australia it is. Currently at AUD$11.72 or NZD $12.85. But here in the wild west that is the NZ Stock Exchange we sit on our arses unable to do a thing while they get the crank handle out to try and get our market moving again. This is ridiculous!

Are we there yet ?, are we there yet ? are...this is worse than a long car journey with a car crammed full of kids !

[minimoke]

Are we there yet ?, are we there yet ? are...this is worse than a long car journey with a car crammed full of kids !Its never about the destination. Its about the journey getting there.

[Beagle]

Its never about the destination. Its about the journey getting there.

Any parent will tell you there's really only two classes of travel, with kids and without them :)
I want SUM more milk ! Suppose we should amuse ourselves with Aussie trading today. $12.90 based on current price and exchange rate. $12.48 for ATM.

[Ggcc]

Any parent will tell you there's really only two classes of travel, with kids and without them :)
I want SUM more milk ! Suppose we should amuse ourselves with Aussie trading today. $12.90 based on current price and exchange rate. $12.48 for ATM.someone may have quoted it, but is the nzx closed this afternoon

[couta1]

someone may have quoted it, but is the nzx closed this afternoon She's ready to go again.:t_up:

[minimoke]

someone may have quoted it, but is the nzx closed this afternoonLooks like its been closed since 11.15 - but buggered if I can find any information about it.

[couta1]

Looks like its been closed since 11.15 - but buggered if I can find any information about it. It's in the Herald, match price is currently in play.

[minimoke]

She's ready to go again.:t_up:Ah, yes. I can hear the cogs grinding from here.

[minimoke]

It's in the Herald, match price is currently in play.Maybe not quite yet. Still well behind ozzie prices

[minimoke]

She's ready to go again.:t_up:Launching the Titanic was faster!

[Beagle]

Launching the Titanic was faster!

LOL we are ready for blast off...almost there...opps…..arggghhhh…. Houston, we have another problem.
Fortunately the early bird (Beagle) got the worm and I hoovered up a few more ATM at the open at $12.25 before the New Zealand stock market fell off the face of the known universe.

Not holding my breath for them trying to refloat the Titanic today...

[sb9]

My hunch re today and y'day spectacular rise could be due to someone having got a wind re CFDA approval for their two pending IF brand applications for "Pure Canterbury" and "Akara".

[bonne vie]

Surprising the NZX nor even ANZ Securities can not put some info on their home pages to let us know what is happening. Guess NZX maybe not able to due to system down. Does ASB securities have any notice up?

[sb9]

Surprising the NZX nor even ANZ Securities can not put some info on their home pages to let us know what is happening. Guess NZX maybe not able to due to system down. Does ASB securities have any notice up?

ASB Sec has below banner on trading screen...



Service Disruption - NZX
The NZX is currently experiencing technical difficulties which will be affecting any new order placement/amendments, order status and market depth. If you are unsure about an order please contact one of our brokers on 0800 272 732. We apologise for any inconvenience this may cause.

[couta1]

Launching the Titanic was faster! And that's it for the day folks, come back tomorrow to see how we are placed for icebergs.

[minimoke]

ASB Sec has below banner on trading screen...


Nothing on ANZ Securities trading site. This lack of information is appalling - read about it on NZ Herald. Its a very sorry state of affairs if I have to go there for my business news.

[777]

This has been on the ANZ Securities site since before midday.

Issued: 28/08/2018 11:47a.m.
NZX has identified an issue with X-Stream and the market is currently in an Enquiry state.

NZX is currently looking into the cause of the issue and will provide a further update by 12pm or earlier if further information becomes available.

[bonne vie]

This has been on the ANZ Securities site since before midday.

Issued: 28/08/2018 11:47a.m.
NZX has identified an issue with X-Stream and the market is currently in an Enquiry state.

NZX is currently looking into the cause of the issue and will provide a further update by 12pm or earlier if further information becomes available.
Must be going blind - what page of the ANZ securities site is that on?

[minimoke]

This has been on the ANZ Securities site since before midday.

Issued: 28/08/2018 11:47a.m.
NZX has identified an issue with X-Stream and the market is currently in an Enquiry state.

NZX is currently looking into the cause of the issue and will provide a further update by 12pm or earlier if further information becomes available.?? cant see it on the Home page. Not on the "Whats happening in the market today" link

[couta1]

?? cant see it on the Home page. Not on the "Whats happening in the market today" link Click on Notice board.

[minimoke]

Click on Notice board.and then click on NZX Orders..... More. Follow the breadcrumb trail. We'll get there in the end

Edit - it says expect an update by 12.00pm or earlier. Would be helpful if they mentioned which day

[BlackPeter]

?? cant see it on the Home page. Not on the "Whats happening in the market today" link

https://www.anzsecurities.co.nz/DirectTrade/dynamic/notice.aspx?id=626

[minimoke]

https://www.anzsecurities.co.nz/DirectTrade/dynamic/notice.aspx?id=626I take it that "the market is currently in an Enquiry state." means fvcked!

[couta1]

I take it that "the market is currently in an Enquiry state." means fvcked! Back to the old chalk and blackboard tomorrow, better pull out that old dial phone as well.

[BlackPeter]

I take it that "the market is currently in an Enquiry state." means fvcked!

I think your description is quite appropriate, though politically obviously highly incorrect;);

[minimoke]

Progress. All buy / sell bids have disappeared.

[IAK]

What a joke.

[RupertBear]

Wonder if Derek The Man Handley our soon to be national CTO works for NZX? :D

[Beagle]

Back to the old chalk and blackboard tomorrow, better pull out that old dial phone as well.

Some of those chalkies were pretty hot mate. Used to enjoy going down there are watching them work. The only time they wiped the board clean to start the day was 1987. Not too many happy faces in the pit or working the boards that day. Now its all electronic its okay to wipe the board clean ?...or is this failure something really serious ?
Not sure its a given we'll see trading commence tomorrow at 10.00 a.m.

[Beagle]

Should be a strong open tomorrow. Closed in Australia at $A11.76 = $NZ12.90.
ATM closed $NZ12.55 based on interbank exchange rate of 0.9119.

[Yoda]

Sold some THL today to buy more SML at $12.50. Which ws the going price Well that didnt go through , so very unhappy about that, especially if you,re right Beagle.. :-(

[limmy]

Wonder how much the NZX lost in revenue because of the system crash?

[Beagle]

Spooky eh possums how this and ATM keep tracking each others share prices.
Interesting arbitrage for this one though, closed in Aussie yesterday on good volume at $12.90 Kiwi ($A11.76 @ 0.9119).
On today's cross rate its $12.87 Kiwi.
I have observed a pattern lately that this is weaker in the mornings and kicks on in the afternoon as the Australian and Asian markets open...just saying.

[minimoke]

Spooky eh possums how this and ATM keep tracking each others share prices.
Interesting arbitrage for this one though, closed in Aussie yesterday on good volume at $12.90 Kiwi ($A11.76 @ 0.9119).
On today's cross rate its $12.87 Kiwi.
I have observed a pattern lately that this is weaker in the mornings and kicks on in the afternoon as the Australian and Asian markets open...just saying.I think you might be right. I don't bother with looking in the moring - the real activity start after noon NZ time. (though I have had a wee peek at today's trades - cant say I am disappointed at all. Portfolio now at all time high!)

[sb9]

Holy smoke, full house.... $13 now and that's lunch time for me....

[minimoke]

Holy smoke, full house.... $13 now and that's lunch time for me....I see flashing lights in rear view mirror Speeding ticket coming up.

[RupertBear]

Spooky eh possums how this and ATM keep tracking each others share prices.
Interesting arbitrage for this one though, closed in Aussie yesterday on good volume at $12.90 Kiwi ($A11.76 @ 0.9119).
On today's cross rate its $12.87 Kiwi.
I have observed a pattern lately that this is weaker in the mornings and kicks on in the afternoon as the Australian and Asian markets open...just saying.

You will be feeling better selling some of your HLG for SML now eh Mr Beagle!! :t_up:

[777]

I see flashing lights in rear view mirror Speeding ticket coming up.

And ATM is now in top gear and closing.

[Beagle]

You will be feeling better selling some of your HLG for SML now eh Mr Beagle!! :t_up:

Thanks mate. Its easy to get carried away with one's own assessment of their stock picking abilities at times like this so I am trying to keep my paws firmly on the ground and assume I fluked it rather than good judgement. It does seem like quite an extraordinary move, $10.30 to $13.03 in just two weeks, up 26%. Makes me wonder if this stock is possibly in play as a takeover target ?

Is it expensive at this level is another question I asked myself last evening ?. Trades on a FY19 PE of ~ 25 at $13.00 based on average analysts forecasts but those forecasts could easily change quite significantly when the company reports on 19 Sept. Even if they don't is 25 expensive for a company with such a clear pathway to strong future growth when the market average PE is close to that level ? I'm not interested in selling that's for sure !

[minimoke]

Makes me wonder if this stock is possibly in play as a takeover target ?Lots of those wee bot trades in ATM and SML. But today average trade is worth $5,376. Might need to keep an eye on this number. Maybe its just Moms and Pops

[nzsharetrade]

minimoke (https://www.sharetrader.co.nz/member.php?6296-minimoke)sold pph and brought SML..good move. how do you know that you insider?:t_up:

takeover from? will ATM and bright Dairy allow that to happen? they got about 18% and 49% + shares in management. there should not be much on the market, isn't?Bright Dairy

[Beagle]

As posted recently, I believe that if ATM could gain control even at as much as $16 a share that would be a fabulous strategic move on their part.

[minimoke]

minimoke (https://www.sharetrader.co.nz/member.php?6296-minimoke)sold pph and brought SML..good move. how do you know that you insider?:t_up:

takeover from? will ATM and bright Dairy allow that to happen? they got about 18% and 49% + shares in management. there should not be much on the market, isn't?Bright Dairy Didnt regret that. Topped up with ATM at the same time. Not a bad return for less than a months work.

[Beagle]

I see flashing lights in rear view mirror Speeding ticket coming up.

I reckon they get a free pass with overspeed today because of the fact that the market was closed for most of yesterday and even "blind freddy" (AKA NZX enforcement) knows that half today's rise was a catch up on the Aussie close yesterday. They'd be too embarrassed to make an enquiry today...deep shame of their own ineptitude I say !

[winner69]

Chris Lee says
https://www.chrislee.co.nz/taking-stock

He doesn’t like us using his stuff but this is pretty good so I pasted the relevant parts anyhow

THE stark difference between the bloated self-serving Fonterra board and executive, and the energy of Synlait Milk’s founder, key shareholders and executive needs minimal discussion from me.

Fonterra, as a disproven business model, has made bleak investment decisions, been slow to spot market change, and displayed little vision when it declined to take up holdings in Synlait Milk and A2Milk, in their formative days.

By contrast the progress and value-add at SML and ATM has been astonishing.

Both companies would appear near the beginning of any book entitled ‘’Great NZ Corporate Successes’’.

If the Otago opportunist, risk-taker and entrepreneur Howard Paterson had not suffocated as a result of mis-swallowing a potato crisp, he would surely be touted today as a key figure in ATM’s beginning and would be forgiven for those of his ventures that failed.

John Penno’s modest aspirations to build Synlait Milk have been vastly surpassed in just seven years, in part because he has made the right connections with capital markets, enabling his business model to be nurtured through a period of great debt.

Today SML’s relative debt has been normalised. I have little doubt it will be a dividend-payer within the next three years.

It does face one problem. So few of its shares are now accessible, its ‘’free float’’ of shares must restrict its appeal to investors who focus on a fair price with any new investment. At $13, Synlait’s price can be justified only with the help of imagination.

When ATM lifted its holding to 17%, SML then had permanent shareholders sitting on the majority of its shares.

ATM’s buying spree pushed SML to prices that no model could explain but also pushed SML into a global index, triggering the brainless buying by the robots that control index funds. That led to even further upward pressure on the share price.

The only motive to sell SML has been the excessive price available.
NZ’s award-winning researchers believe the share price today is nearly double its current underlying worth.

But index funds have no algorithm to assess value.

Buying continues, so buying pressure further inflates the price. The index funds will report ‘’profits’’ from this process, if the price is pushed ever higher.

Our clients were quick to spot the potential of SML and might return to buy more, if an event or a trend or an algorithm led to the index fund robots being required to sell at any price.

But my expectation is that the buyers would look for the shares at the price indicated by qualitative research. That might indicate fair value at half of the current figure being paid by index funds.
Of course that ‘’event’’ may not occur.

But what SML and ATM do highlight is the absence of a value test in index buying.

It also highlights the risks taken by short sellers – those who borrow shares, sell them, and gamble that they can repurchase the shares in the future at a lower price, to enable the return of the borrowed shares.

Their qualitative research can be made to look silly by unthinking index purchasers.

There will have been much short selling of ATM and SML.

So far, the index buying will have lightened the pockets of the short selling gamblers.

Short selling is not a game for the faint-hearted, or for those with limited access to funds.

[Beagle]

Few if any would try and make the argument that Synlait has below market average growth. In fact many would make the case their growth is well and truly above average, at least in the top quartile and I would argue there are very few companies listed on the NZX with such a clearly defined roadmap to future growth. We're in FY19 already and I find it quite interesting that according to average analyst forecast Synlait has a market average forward PE of 22 for FY19. Any wonder ATM has been increasing its stake ?

I think even at $12.20 they're very good value indeed for the growth on offer relative to the market.

Posted 28/8/18 This is really simple kindergarten stuff, investment 101.
Chris Lee should stick to trying to understand fixed interest investments lest he make an even bigger fool of himself.

[percy]

Chris Lee says
https://www.chrislee.co.nz/taking-stock

He doesn’t like us using his stuff but this is pretty good so I pasted the relevant parts anyhow

THE stark difference between the bloated self-serving Fonterra board and executive, and the energy of Synlait Milk’s founder, key shareholders and executive needs minimal discussion from me.

Fonterra, as a disproven business model, has made bleak investment decisions, been slow to spot market change, and displayed little vision when it declined to take up holdings in Synlait Milk and A2Milk, in their formative days.

By contrast the progress and value-add at SML and ATM has been astonishing.

Both companies would appear near the beginning of any book entitled ‘’Great NZ Corporate Successes’’.

If the Otago opportunist, risk-taker and entrepreneur Howard Paterson had not suffocated as a result of mis-swallowing a potato crisp, he would surely be touted today as a key figure in ATM’s beginning and would be forgiven for those of his ventures that failed.

John Penno’s modest aspirations to build Synlait Milk have been vastly surpassed in just seven years, in part because he has made the right connections with capital markets, enabling his business model to be nurtured through a period of great debt.

Today SML’s relative debt has been normalised. I have little doubt it will be a dividend-payer within the next three years.

It does face one problem. So few of its shares are now accessible, its ‘’free float’’ of shares must restrict its appeal to investors who focus on a fair price with any new investment. At $13, Synlait’s price can be justified only with the help of imagination.

When ATM lifted its holding to 17%, SML then had permanent shareholders sitting on the majority of its shares.

ATM’s buying spree pushed SML to prices that no model could explain but also pushed SML into a global index, triggering the brainless buying by the robots that control index funds. That led to even further upward pressure on the share price.

The only motive to sell SML has been the excessive price available.
NZ’s award-winning researchers believe the share price today is nearly double its current underlying worth.

But index funds have no algorithm to assess value.

Buying continues, so buying pressure further inflates the price. The index funds will report ‘’profits’’ from this process, if the price is pushed ever higher.

Our clients were quick to spot the potential of SML and might return to buy more, if an event or a trend or an algorithm led to the index fund robots being required to sell at any price.

But my expectation is that the buyers would look for the shares at the price indicated by qualitative research. That might indicate fair value at half of the current figure being paid by index funds.
Of course that ‘’event’’ may not occur.

But what SML and ATM do highlight is the absence of a value test in index buying.

It also highlights the risks taken by short sellers – those who borrow shares, sell them, and gamble that they can repurchase the shares in the future at a lower price, to enable the return of the borrowed shares.

Their qualitative research can be made to look silly by unthinking index purchasers.

There will have been much short selling of ATM and SML.

So far, the index buying will have lightened the pockets of the short selling gamblers.

Short selling is not a game for the faint-hearted, or for those with limited access to funds.

Thanks for posting W69.
A very interesting read.
Valid points that should be taken on board,and not be ignored.

[Beagle]

With all due respect Percy I don't think you have ever made a proper attempt to look at Synlait or ATM and have missed some tremendous gains and will continue to miss further outstanding gains in the years ahead simply because I think you feel the gains have been excessive and its too late to come on board and join the party.
Its terribly easy for people who have missed the gains in these two fabulous stocks to leap upon an "opinion piece" masquerading as news, like this to seek ratification of their confirmation bias.
The two top performing stocks of the NZX50 this year and neither are expensive on a FY19 forward PE basis ands especially not on a forward FY20 basis taking in to account their historical growth and outstanding growth prospects.

Highly likely Synlait becomes a takeover target sometime in the next few years in my opinion for reasons previously stated, none of which have been observed by or attempted to be understood by Chris Lee. You know how Craigs did an amateur job on analyzing STU...this effort by Chris Lee is far worse.

[minimoke]

I liked how the new ATM boss put it: "the dairy cabinet". ATM, and by default SML hasnt even begun to fill the cabinet with A2 milk based product. Walk into any supermarket and look at how much real estate traditional milk products take up. We are talking acres. Now imagine some of this with A2