SML - Synlait Milk Ltd

[goldfish]

I'm sure they will regret their analysis. Just like when FSF float, Morning Star also gave "avoid" recommendation. If you take their advice, you'd certainly miss money-make chance.

Yes i could never understand how they could say that about fonterra, they where the first stock i bought and luckily i ignored there advice. Did show me that so called experts dont know what they are talking about some times. Id be buying synlait if i had spare cash.

[FarmerHamilton]

Charm offensive has spread to Sharetrader. Lease, Farmerhamilton has made a disclosure do you need to too ?

No charm offensive from me JoshuaTree ( are you a mega U2 fan ? ) just stating facts/the obvious. Although being extremely long the stock obviously I want it to do well and the IPO to "get away" successfully.

Dairy prices went ballistic during Feb/Mar/Apr ... came back around 10/12% and the last two auctions the volatility has died away and prices have been firm. However in the meantime the Kiwi$ has fallen from 86c to 77c so in NZD terms we are pretty much at record levels. Synlait's P&L suggests they are doing very well and every time the Kiwi$ drops 1/2c the tail wind just gathers more steam , especially if USD pricing of WMP and SMP remain firm.

This time next month the new season will be kicking off , Synlait will be floated and FarmerHamilton will be a happy chappy !!

[CJ]

Dairy prices went ballistic during Feb/Mar/Apr ... came back around 10/12% and the last two auctions the volatility has died away and prices have been firm.

I need to go back to the prospectus as one thing I dont understand is how this effects the farm gate price.

This will become less of an issue as Synlait moves more to value added products (ie. baby formula) but milk powder will still be the bulk of its sales.

[FarmerHamilton]

This is why the Fonterra starting forecast for next year is $7 !!

[CJ]

This is why the Fonterra starting forecast for next year is $7 !!

My point being, is there any benefit to the Dairy company since all it does is increase the farmgate price (ie. cost of sales). Is it linked directly or does the dairy company take a margin.

I note that Synlaits milk supply cost is linked to the Farmgate price (less upto 25c)

[Lease]

Charm offensive has spread to Sharetrader. Lease, Farmerhamilton has made a disclosure do you need to too ?

Please look p6 of my disclosure.

[CJ]

Please look p6 of my disclosure.

Some of us have different number of posts per page. I assume you are refering to post #89:

http://www.sharetrader.co.nz/showthr...842#post413842

[Xerof]

CJ, you are quite correct - the FX rate influences the price Synlait will have to pay for supply. They are in direct competition for supply of raw material, and in order to compete they will have to largely pass on any perceived FX benefits to suppliers. FH should be pushing this line for Synlait Farms, not Milk

For me, the volumes current holders sell into Selldown Co will be the most telling action for the IPO.

[Joshuatree]

Thanks Cj ,lease. Its just sounding like a good ole H/C ramp at times. Sure dairy and proteins are hot and sexy atm(sheesh i dont even know how may udders a cow has) and yes fonterra has been a great performer( for my family too). Maybe it will be a good stag/ inv but it may not be a dead cert( like mighty river for e.g.). And chances are it will list at the higher end as well so do your homework well folks ,and assume nothing.

[FarmerHamilton]

CJ, you are quite correct - the FX rate influences the price Synlait will have to pay for supply. They are in direct competition for supply of raw material, and in order to compete they will have to largely pass on any perceived FX benefits to suppliers. FH should be pushing this line for Synlait Farms, not Milk

For me, the volumes current holders sell into Selldown Co will be the most telling action for the IPO.

Agree that the lower the NZD the higher the COGS ... ie Farmgate Milk Price BUT ... Synlait Milk receive their margin in USD not NZD so when the fx rate falls theoretically their profits in NZ should rise , sure the input costs go up ( as the Fonterra payout rises ) but the margin they make converting raw milk into high value formula and powders ( don't forget the fat ... they make a lot of money from the little AMF plant that no one talks about ) is in USD which obviously is a lot more NZ$ at .77 rather than .85.

5 days to go to book build , hopefully Portugal, Greece , Turkey & Egypt can keep it together for another few days !!