SML - Synlait Milk Ltd

[minimoke]

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[dreamcatcher]

Probably years away but latest Chinese formula announcement believe is positive for SML with Bright Dairy 69.97m holding

[BlackPeter]

Early May 2019:

Synlait's new Pokeno factory once completed will produce an extra 45,000 tonnes of infant-grade skim milk, whole milk and infant formula base powders. Total lactoferrin production volume in 2H19 will increase from 7 MT to c.20 MT Management expecting lactoferrin margins to expand in 2H19 as a result of favorable global pricing. Not to mention SML expects to obtain State Administration for Market Regulation (SAMR) registration for New Hope’s Akara and Bright Dairy’s Pure Canterbury brands by the end of 2019.

Happy camper as portfolio showing green suppose that's the difference about glass been 1/2 full or 1/2 empty.

am with you. we see how it goes.

Just own both stocks... and watch them both rise in time, if you believe in the A2 story.
I've held both since last year and have done alright.

Amazing what difference one month can make to a share: SML dropped 25% since early May ... and so far the analysts have not even realised there might be a problem. Lets see what happens to the share price if they start downgrading ...

I must admit - there was a time when I thought as well that SML is a pristine company run by outstanding management (actually I think I even stated something like that at some stage - but couldn't find my post).

I hope for holders that things can still be resolved with some financial transactions - but I don't think it will be easy to quickly repair the damage done to the reputation of Synlaits management and board. They clearly have been gambling with shareholders money and seem to have a quite lose understanding of what the requirement to keep the share informed actually means. Market was never informed about the risk to build a factory on land with covenants prohibiting this use.

PS: My apologies to the posters above for picking their posts ... just wanted to demonstrate how fickle the share market can be. For some other stock it could have been my posts as well ;

[whatsup]

Early May 2019:






Amazing what difference one month can make to a share: SML dropped 25% since early May ... and so far the analysts have not even realised there might be a problem. Lets see what happens to the share price if they start downgrading ...

I must admit - there was a time when I thought as well that SML is a pristine company run by outstanding management (actually I think I even stated something like that at some stage - but couldn't find my post).

I hope for holders that things can still be resolved with some financial transactions - but I don't think it will be easy to quickly repair the damage done to the reputation of Synlaits management and board. They clearly have been gambling with shareholders money and seem to have a quite lose understanding of what the requirement to keep the share informed actually means. Market was never informed about the risk to build a factory on land with covenants prohibiting this use.

PS: My apologies to the posters above for picking their posts ... just wanted to demonstrate how fickle the share market can be. For some other stock it could have been my posts as well ;

Would love to be a fly on the wall if and when negotiations start, imho SML are starting from a very very very weak position and would dearly to hear from management and the board on their position.

IMO this will finish up in court then the court of appeal so how long will that take 3-5 years ?

[nzsharetrade]

I still believe SML, it is just matter of time. nothing has changed in long term. I believe Mr Ye is screwing up SML but aiming ATM, I dont believe he is looking for money. Supreme court may make the right call but how long that is going to be. Bright Daily is not doing very well in China comparing with other local brand. lots of things could happen just take times.

[BlackPeter]

I still believe SML, it is just matter of time. nothing has changed in long term. I believe Mr Ye is screwing up SML but aiming ATM, I dont believe he is looking for money. Supreme court may make the right call but how long that is going to be. Bright Daily is not doing very well in China comparing with other local brand. lots of things could happen just take times.

True, just will take time (and money ). Problem is: time for them is money as well.

[nzsharetrade]

True, just will take time (and money ). Problem is: time for them is money as well.

Well, that is the explanation for the drop down. may not be bad for 50% increase if this does take 5 years in worse case.
Very interesting that Bright Daily mentioned the huge debt caused by SML early this year. I thought the debt is with SML. anyway, I am sure Bright Daily can not help SML in bad case based on their current financial situation .

[RTM]

I wonder if Fonterra will be the rescuer if more processing capacity is needed ?

[minimoke]

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[nzsharetrade]

I dont think it will take that long at all. Appeal Court has already said ""In the present case, there is no difficulty with the enforcement of the covenants.". It was a pretty robust decision.

There isnt a lot of meat left in the argument to try and secure a victory on the covenant issue at Supreme court level - any way SML has already advised the market that they thing a "practical solution is attainable". That does not suggest further court action on the covenants.

The problem for SML is the enforcement of the covenants - and as I mentioned that has already been flagged at the Appeal Court level - thats a pretty high level view that there is no difficulty securing enforcement.

At worse maybe a couple of years - during which an injunction may apply. (it was SML's risk to continue building in the face of the original cease and desist demand - that they failed to advise the market of)

What do you mean ‘at worse maybe a couple of years’? if enforcement of covenant can not be changed and Mr Ye does not want to have a deal then SML needs to remove the factory? there is no point left going to supreme court?