SML - Synlait Milk Ltd

**000831** · 29-01-2014, 12:01 PM

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

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

**Lease** · 29-01-2014, 12:05 PM

Originally Posted by 000831

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

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

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

**Radler** · 29-01-2014, 12:14 PM

Attachment 5404

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

**Citizen Erased** · 29-01-2014, 08:47 PM

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

**1leon** · 29-01-2014, 10:55 PM

Originally Posted by Citizen Erased

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

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

**000831** · 30-01-2014, 09:48 AM

Originally Posted by 1leon

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

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

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

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

**Lease** · 30-01-2014, 10:39 AM

Originally Posted by 000831

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

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

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

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

**000831** · 30-01-2014, 10:56 AM

Originally Posted by Lease

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

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

**1leon** · 30-01-2014, 01:04 PM

Originally Posted by 000831

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

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

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

I think the comparison you make with WYN is precisely the issue---the tech bubble is engulfing the market if an investor can look at a 90% increase in value within 6 months of listing as a conservative investment.