SML - Synlait Milk Ltd

**petty** · 18-03-2019, 12:44 PM

Interesting article but Im expecting earnings growth to exceed 18% also. If If has increased 16% as the same article outlines then 5% should be significantly exceeded,

However, for those more across books than I. Where does capex for Pokeno sit regarding earnings for the year? FUrther and I imagine that operating costs of pokeno will be starting to be incurred prior to revenue being realised. WIll this hold back results?

**Beagle** · 18-03-2019, 02:16 PM

Originally Posted by petty

Interesting article but Im expecting earnings growth to exceed 18% also. If If has increased 16% as the same article outlines then 5% should be significantly exceeded,

However, for those more across books than I. Where does capex for Pokeno sit regarding earnings for the year? FUrther and I imagine that operating costs of pokeno will be starting to be incurred prior to revenue being realised. WIll this hold back results?

In my opinion it is normal that all development costs will be capitalised and treated as capex i.e. no impact on profit.

**sb9** · 18-03-2019, 02:25 PM

Ok, time to refresh previous period numbers just in time for 1H results.

For FY'17 - Full Year NPAT of $39.5m of which 1H was $10.6m

For FY'18 - Full Year NPAT of $74.6m of which 1H was $40.7m

EPS curerntly sits at $0.42c with current P/E of between 26-27.

I'm picking growth in NPAT of around 30% resulting in profit of $53m which translates into $0.59c EPS
(annualised).

A PE multiple of 20 (low) puts the price at $11.80, at 23 (mid) the price is $13.50 and at 26 (high) the price is $15.35.

Let's see how numbers actually turn out to be.

Happy to listen to others opinion.

**winner69** · 18-03-2019, 02:29 PM

Originally Posted by sb9

Ok, time to refresh previous period numbers just in time for 1H results.

For FY'17 - Full Year NPAT of $39.5m of which 1H was $10.6m

For FY'18 - Full Year NPAT of $74.6m of which 1H was $40.7m

EPS curerntly sits at $0.42c with current P/E of between 26-27.

I'm picking growth in NPAT of around 30% resulting in profit of $53m which translates into $0.59c EPS
(annualised).

A PE multiple of 20 (low) puts the price at $11.80, at 23 (mid) the price is $13.50 and at 26 (high) the price is $15.35.

Let's see how numbers actually turn out to be.

Happy to listen to others opinion.

Like that 30% earnings growth sb9

You usually pretty close to the mark (except with Trilogy but I’ll forgive you for that) so it looks like Wednesday could be a good day

**sb9** · 18-03-2019, 02:30 PM

Originally Posted by winner69

Like that 30% earnings growth sb9

You usually pretty close to the mark (except with Trilogy but I’ll forgive you for that) so it looks like Wednesday could be a good day

Must've caught in the hype with Trilogy at that time.

**Beagle** · 18-03-2019, 02:31 PM

Originally Posted by sb9

Ok, time to refresh previous period numbers just in time for 1H results.

For FY'17 - Full Year NPAT of $39.5m of which 1H was $10.6m

For FY'18 - Full Year NPAT of $74.6m of which 1H was $40.7m

EPS curerntly sits at $0.42c with current P/E of between 26-27.

I'm picking growth in NPAT of around 30% resulting in profit of $53m which translates into $0.59c EPS
(annualised).

A PE multiple of 20 (low) puts the price at $11.80, at 23 (mid) the price is $13.50 and at 26 (high) the price is $15.35.

Let's see how numbers actually turn out to be.

Happy to listen to others opinion.

For what its worth I am quite happy with your numbers mate.

**sb9** · 18-03-2019, 02:34 PM

Originally Posted by Beagle

For what its worth I am quite happy with your numbers mate.

Let's hope so, my growth prediction is on back of what A2 has delivered last month. And SML call themselves as "we're a growth company" from their presentations. So for that to be true they should be growing at least 30% yoy if not more.

**Beagle** · 18-03-2019, 02:41 PM

Originally Posted by sb9

Let's hope so, my growth prediction is on back of what A2 has delivered last month. And SML call themselves as "we're a growth company" from their presentations. So for that to be true they should be growing at least 30% yoy if not more.

Absolutely they're a growth company just like SUM others but keep in mind growth doesn't always happen in a linear fashion. FY20 growth when Pokeno is commissioned is going to be awesome as will FY21 when they will get a full year's impact of all their additional plant capacity.
I think the last official production forecast the company made many months back was very conservative and am fully expecting a significant upgrade on the back of ATM results like you are.