SML - Synlait Milk Ltd

**Beagle** · 25-03-2019, 01:06 PM

Originally Posted by hardt

NPAT was 15% higher than 2H18, the marginal pressure was clear to see at FY18 with 74m NPAT following 1H18 of 42m.

1H18 GP per MT 1,400 (up from 800 PCP)
2H18 GP per MT 1,195
1H19 GP per MT 1,164

They had signaled the outlier of 1H18 last year

Margins under pressure for some time now and maga capex on new stainless steel. Suppose shareholders are hoping the Chinese play nice with new approvals...what could possibly go wrong seeing as they're such "responsible fair and reasonable" trade partners and we have such a "warm" trade environment lol
I think John Penno sold shareholders down the river with the new contract with ATM and then left and the new guy is obsessed with politically correct B.S.
I'm completely done punting my financial security on the Chinese playing nice and paying over the top metrics for the privilege but GLTAH.

**nzsharetrade** · 25-03-2019, 02:01 PM

Originally Posted by Beagle

Margins under pressure for some time now and maga capex on new stainless steel. Suppose shareholders are hoping the Chinese play nice with new approvals...what could possibly go wrong seeing as they're such "responsible fair and reasonable" trade partners and we have such a "warm" trade environment lol
I think John Penno sold shareholders down the river with the new contract with ATM and then left and the new guy is obsessed with politically correct B.S.
I'm completely done punting my financial security on the Chinese playing nice and paying over the top metrics for the privilege but GLTAH.

have you sold out?

**Beagle** · 25-03-2019, 02:07 PM

Yes, sold all my holdings and not looking for a reentry point at any price. A big part of that however is to do with my personal circumstances and I am leaning toward heavily favouring companies that can pay me a decent dividend yield. Happy to mix that up with SUM growth companies with a proven record with a very modest yield provided I have full confidence in their proven business model and track record. This may well still be suitable for people chasing growth but there's growth companies on far more compelling metrics listed on the NZX in my opinion with SUM and OCA being two notable examples.

Other reasons were posted last week.

**nzsharetrade** · 25-03-2019, 02:17 PM

fair enough......

**Hectorplains** · 25-03-2019, 02:42 PM

Originally Posted by Beagle

Margins under pressure for some time now and maga capex on new stainless steel. Suppose shareholders are hoping the Chinese play nice with new approvals...what could possibly go wrong seeing as they're such "responsible fair and reasonable" trade partners and we have such a "warm" trade environment lol
I think John Penno sold shareholders down the river with the new contract with ATM and then left and the new guy is obsessed with politically correct B.S.
I'm completely done punting my financial security on the Chinese playing nice and paying over the top metrics for the privilege but GLTAH.

Diversification away from reliance on the Chinese market has been down played also. Sod all mention of where Munchkins US launch is at or why US / FDA approval is taking so long. Penno said another four to twelve months in August... We're over seven month mark and an update is warranted.

**Beagle** · 25-03-2019, 03:06 PM

Originally Posted by Hectorplains

Diversification away from reliance on the Chinese market has been down played also. Sod all mention of where Munchkins US launch is at or why US / FDA approval is taking so long. Penno said another four to twelve months in August... We're over seven month mark and an update is warranted.

Yeap I couldn't agree more. All their new approvals have a "on a wing and a prayer" feel about them but meantime they're absolutely flat out gearing themselves to the eyeballs with debt building hundreds of millions of dollars of new stainless steel assuming that all these approvals come through. What could possibly go wrong lol
Chinese are really getting down and dirty with the Canadians now https://www.cbc.ca/news/business/can...hina-1.5067307

**Joshuatree** · 25-03-2019, 03:29 PM

Contraywise,my broker upgraded to a buy from $10 to $10.50 on the 20/3 after the price dropped to sub $10. a snippet

"From a manufacturing point of view, management noted on the earnings call that their IFC guidance range does not require GACC approval for the Auckland plant, which, in our view, is interesting as it implies either: (1) an increase in ATM stage 4 mix / Munchkin volume, or (2) they are comfortable producing ATM's stage 1 - 3 product, with the potential it could be re-exported from Australia and into China."

**kiwi_crusader** · 25-03-2019, 03:32 PM

Fresh milk starts flowing out of Synlait to Foodstuffs next monday 1/04, around 6 truck loads a day.

**Beagle** · 25-03-2019, 03:34 PM

https://www.marketscreener.com/SYNLA...761/consensus/
Average 12 month hence broker target now $10.28. No dividends and with new product consenting risks some would apply a ~ 12% discount to that to get a NPV of $9.05 today.