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Thread: Tegel IPO

  1. #1111
    Senior Member hardt's Avatar
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    Good afternoon

    Tegel currently exports approximately NZD 100 million product to Australia, the UAE, Hong Kong, the Philippines, and the Pacific Region.
    We source our feed from farms globally – from the likes of North and South America, Europe and Australia. So we are able to respond to rising prices in the event of a drought in Australia say, to source it from elsewhere at a lower price. We are also able to adjust the feed mix, eg replace corn with sorghum or adjust the amount of wheat etc. We don’t specify what the total feed costs are.

    From our latest annual report:
    “To secure input costs, the Company hedges its exposure to certain commodities and foreign exchange risks denominated in US dollars. The Company also uses foreign exchange contracts to hedge revenue from export sales denominated in Australian dollars. All foreign exchange forward contracts and commodity contracts are executed in accordance with the Board-approved FX Hedging and Commodity Risk Treasury Policies. As at 30 April 2017, 89% of US dollar raw material purchase requirements and 77% of forecast Australian dollar receipts were hedged for FY18.”

    Hope this helps.

    - Take away from this is Tegel have very limited exposure to the negatives that could arise out of a weakening NZD.
    Last edited by hardt; 24-10-2017 at 03:15 PM.

  2. #1112
    Advanced Member Valuegrowth's Avatar
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    Thank you for some information. Still I am studying their business model.

    World cereal stocks by the close of seasons in 2018 are now forecast (FAO) at a new all-time high of 720.5 million tonnes. According to the IGC, the forecast for world total grains production in 2017/18 is raised by 19m t m/m (month-on-month), to 2,069m, second only to last season’s record. Therefore, we cannot expect sharp rise in animal feed even in 2018.

    https://genevajournal.com/tegel-grou...ing-key-level/

    https://simplywall.st/news/2017/10/0...stocks-to-buy/

    Following is one of the top winners in the poultry world so far in 2017.

    SAFM (Sanderson Farms) It broke several of 52 weeks high and established a new all time high as well. It peaked at an all-time high of $166.65 and currently trading around $ 148.

    52 week 74-07 – 166.65
    Quote Originally Posted by hardt View Post
    Good afternoon

    Tegel currently exports approximately NZD 100 million product to Australia, the UAE, Hong Kong, the Philippines, and the Pacific Region.
    We source our feed from farms globally – from the likes of North and South America, Europe and Australia. So we are able to respond to rising prices in the event of a drought in Australia say, to source it from elsewhere at a lower price. We are also able to adjust the feed mix, eg replace corn with sorghum or adjust the amount of wheat etc. We don’t specify what the total feed costs are.

    From our latest annual report:
    “To secure input costs, the Company hedges its exposure to certain commodities and foreign exchange risks denominated in US dollars. The Company also uses foreign exchange contracts to hedge revenue from export sales denominated in Australian dollars. All foreign exchange forward contracts and commodity contracts are executed in accordance with the Board-approved FX Hedging and Commodity Risk Treasury Policies. As at 30 April 2017, 89% of US dollar raw material purchase requirements and 77% of forecast Australian dollar receipts were hedged for FY18.”

    Hope this helps.

    - Take away from this is Tegel have very limited exposure to the negatives that could arise out of a weakening NZD.

  3. #1113
    Legend peat's Avatar
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    Quote Originally Posted by hardt View Post
    - Take away from this is Tegel have very limited exposure to the negatives that could arise out of a weakening NZD.
    Umm, they still do have exposure its just delayed - come FY18 when they repeat their hedging the prices will be lower.
    For clarity, nothing I say is advice....

  4. #1114
    Advanced Member Valuegrowth's Avatar
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    One good thing is they do hedging to minimize risk. Hope they will hedge correctly. Lower NZD is good for their exports.

  5. #1115
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    Pak n sav drumsticks @ $5.99kg last Friday suggests increased cost or surplus raw chicken been used for higher value items instead of been dumped. Always wondered why sell raw chicken if you can get a better price for value added product which I think Tegel is trying to establish with their new product range. Heard new boning machine recently modified to handle various chicken sizes more efficiently which should increase raw chicken yield .... imo

    GS new TP $1.70

    Disc hold

  6. #1116
    Advanced Member Valuegrowth's Avatar
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    It was due for rally. Now is has risen from its recent 52 week low 1.06 to 1.45. It is closer to its 52 week high. However, currently it has a below average ROE. It has PE 14.89.Will they have an above average ROE in the future?

  7. #1117
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    very quiet here, bellow is news from NZ Herald:
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11944809
    plan for chicken farm to create jobs in Northland



  8. #1118
    Speedy Az winner69's Avatar
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    Quote Originally Posted by winner69 View Post
    Up to $14.67 in September

    That's good
    Plummets back to $13.74 kg in October

    That’s not too good

    Stats NZ Food price index
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  9. #1119
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    Perhaps gain some market share from Mainland?

  10. #1120
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    Quote Originally Posted by winner69 View Post
    Plummets back to $13.74 kg in October

    That’s not too good

    Stats NZ Food price index

    2016M10 $13.42 2017M10 $13.74

    Slight 2.4% improvement from last year

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