Synlait Farms Limited joins Unlisted
http://www.unlisted.co.nz/uPublic/un...cement_id=2183
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Synlait Farms Limited joins Unlisted
http://www.unlisted.co.nz/uPublic/un...cement_id=2183
Synlait Farms Company Profile, 2012 Audited Annual Report and Constitution
https://www.unlisted.co.nz/Members/u...cement_id=2184
Synlait Farms March 2013 Investor Presentation
https://www.unlisted.co.nz/Members/u...cement_id=2185
Looks like a market is slowly establishing in Synlait Farms. Opening offer was $1.15 with a bid appearing last Thursday at $0.65 . Today a fresh buy order has been placed for 10,000 shares at $0.75c. Bid / offer spread is still very wide but I suppose it is still early days.
With a NAV of $1.45 both buyers are obviously trying to buy $1's worth of assets for around $0.50c.
It will be interesting to see if the recent trend of higher dairy prices , especially WMP , will continue at tonights auction on the GDT Platform.
Amazing , up another double digit gain and prices in NZ$ terms now up 50% in 2013. Synlait Farms could make some serious dough in 2013/14 season with a payout back above $7.00 !! The buyers at 75c & 65c may need to pay up to get any. Interesting to see if the $1.15 seller moves there price up after yet another spectacular auction result.
From their 2012 accounts, they had a NP of $3,126k and have shares on issue of 40,802,871 so earnings per share of 7.6c per share. Apply a P/E of 10 gives you 76c per share or 15 = 1.15.
So looks like buyers and sellers have a different view of what P/E should be applied - I have no idea what it should be either. Good to have it listed, even if it is on the "unlisted".
FarmerHamilton - I wild assumption I know but are you are farmer from Hamilton?? What is your view on the financials and a fair price for the shares. Looking at the NTA is misguided in my view as unless you are liquidating, the key metric is earnings/cashflow/dividends??? Cashflows from operations look to be strong at over $6m.
Like the listed property stocks I think NTA is important because it gives you a good starting point. Dairy farms have never yielded as much as commercial property but like owning a building in downtown Auckland with Synlait's 14,000 cows sending off their milk daily they get a monthly "rent cheque" from Synlait Milk. Each producing hectare has a value and each cow has a value. Added up at recent valuations and Synlait's are according to the presentation worth $1.45/share.
The company is a play on rising commodity ( protein ) demand and prices. At a $7.50 payout the company will earn probably twice as much as at a $6.50 payout so there is real leverage to rising commodity prices. These dairy auction results must be music to managements ears I would have thought.
Value ... I would have thought that with a fair chance of doubling of earnings in the next 12 months and at a 30c discount to NAV ( 20% ) $1.15 looks reasonable value. 75c I would say would be a fantastic buy.
My unlisted "quote sheet" page is blank , anyone else no what is going on over there today?
In part but listed property stocks are valued on their yield. Variations occur due to debt levels, quality of buildings/tenants etc. The two (NTA and yeild) maybe confused as the value of a building is linked directly to its rental yield - an increase in NTA will be due to an increase in rental yield.
So at earnings of 7.6c per share, and a dividend policy of say 90% and a target yeild of 8% gives you a SP of 85c. If their profit doubles as you suggest, the that price will also double.
Edit: I am not sure what their dividend policy or whether they plan to distribute or use excess funds to pay down debt or expand.
You'd never get 8% yield on any dairy farm in NZ ( maybe a $10 payout ). I would think with a bumper year anticipated next year they will re-invest in there re-grassing program , re-invest in stock ( more culls ) , and keep the bank happy by paying down a chunk of the new debt taken on to buy out Mitsui.
Listed Property trusts are a good investment at the right time in the cycle ... investing In ING Property Trust at $1.20 in 2005 and then selling at 57c in 2009 probably wasn't too clever , but I'm sure some people did it. Kiwi Income and Goodman both traded in the $1.60 range a few years ago , now $1 and change.
Westpac just upped the Fonterra payout forecast to $6.60 , if these prices hold until start of next season ( August for you townies ) and the Kiwi$ stays under 85c then next years payout will be $7 minimum , possibly $7.50 or even $8.
Synlait profits tied directly to payout , fixed cost around say $5.50 on 5.5m kgms , profit at $6.50 payout roughly $5.5m , at $7.50 roughly $11m ( approx 25c e.p.s. x P/E 7 = $1.75 ) The leverage to rising dairy prices is fantastic ( and awful when they fall ) . LPT profits are far less volatile theoretically , although those buyers in 05/06 may beg to differ if they sold 2/3 years later.
Stunning rise in skim milk powder prices, up +36% in NZ$ terms in two weeks; currency rose sharply overnight TWI = 79.3
Posted in Rural News April 12, 2013 - 08:31am, David Chaston
http://www.interest.co.nz/sites/defa...nzd-prices.gifSkim milk powder prices in NZ$
Skim milk powder prices have moved sharply higher in the latest USDA market survey.
They rose an average of 36% in US dollar terms from their previous report on March 28.
Actual price rises in this market survey ranged from +26% to +45% for skim milk powder sold by Oceania suppliers which includes Fonterra.
In NZ$ terms the average rise was just as impressive - up by an average of 35%.
Over the same period, the New Zealand currency has risen just 2.6%.
The average skim milk powder price is now US$5,563 per tonne and $6,640 per tonne. These are rises of US$1,475 and NZ$1,756 over that two week period.
From the beginning of the year, skim milk prices have risen US$2,163 and NZ$2,563 per tonne, rises of +63% in either currency.
The rise in wholemilk powder prices has been strong too. They are up +11% in the past two weeks.
Synlait Farms has still not traded yet ... surely 1 kiwi out of 4.2m might be interested in "jumping in" soon ?? ...
Yes, NZ's biggest industry , the thing we absolutely , no question, lead the world in ... dairy farming / milk production and we get a new listing with 100% focus on that industry and not a single trade in 3/4 weeks.
NZ's capital markets are so thin ... very frustrating the lack of liquidity.
I'm thinking it was probably put on the unlisted to keep down costs. I think they have about 100 shareholders so don't know if that meets the minimum requirement. A bit depressing when a company that sells greasy fried chicken , crap coffee , and naf pizza with their packaging littering the streets of NZ can trade in decent volume with a tight B/O spread on the NZX and yet a company producing a healthy quality product exported all over the world can't get any interest in it at all ....