SML - Synlait

[Teitei]

Vote NO and "A2M can wave goodbye to its China IF business..."
Vote YES and "A2M = Eunuch"

Hmmm, not much choice here. But great analysis. No-one on HC can beat that. That's for sure. 

Shanghai happens to be THE economic powerhouse of China, the second biggest economy in the world.

The Shanghai Municipal Council is the commercial arm of the local government of the Shanghai region.

Bright Foods is the commercial & industrial food operating arm of the Council.

Connect the dots.

Enough assurances were made by Bright's executives & finally, the Chairman himself no less - that they stand steadfast behind Synlait. 

Seems to me that some posters cannot but see everything Synlait as negative & beyond salvation but cannot see the above.

[Buzz]

Shanghai happens to be THE economic powerhouse of China, the second biggest economy in the world.

The Shanghai Municipal Council is the commercial arm of the local government of the Shanghai region.

Bright Foods is the commercial & industrial food operating arm of the Council.

Connect the dots.

Bright are much better connected, and influential than even those incredible credentials.

I agree, even though the SML SP has popped today, basically very little has changed with the $130m loan from Bright, except that the creditor is not the bank anymore. They still have to pay it off.

Better imo to see how the cap raise goes and whether that is the time to get some. Without a successful and massive cap raise, SML is still in deep doo doo. It's not a given yet that Bright or ATM would pile hundreds of millions into maintaining their anchor shareholder stakes, or even that SML continues as a listed company.

Underlying that is SML doesn't make any money, last reporting was close to -$100m net loss, -$17.4m after adjustments. Debt up to $559m.

Still a sick puppy, very sick.

[CG]

Shanghai happens to be THE economic powerhouse of China, the second biggest economy in the world.

The Shanghai Municipal Council is the commercial arm of the local government of the Shanghai region.

Bright Foods is the commercial & industrial food operating arm of the Council.

Connect the dots.

Enough assurances were made by Bright's executives & finally, the Chairman himself no less - that they stand steadfast behind Synlait. 

Seems to me that some posters cannot but see everything Synlait as negative & beyond salvation but cannot see the above.

Did I say anything about Synlait? 

[Basil]

Bright are much better connected, and influential than even those incredible credentials.

I agree, even though the SML SP has popped today, basically very little has changed with the $130m loan from Bright, except that the creditor is not the bank anymore. They still have to pay it off.

Better imo to see how the cap raise goes and whether that is the time to get some. Without a successful and massive cap raise, SML is still in deep doo doo. It's not a given yet that Bright or ATM would pile hundreds of millions into maintaining their anchor shareholder stakes, or even that SML continues as a listed company.

Underlying that is SML doesn't make any money, last reporting was close to -$100m net loss, -$17.4m after adjustments. Debt up to $559m.

Still a sick puppy, very sick.

Sums the situation up very well.  Happy for Balance but there's a very long and winding road ahead for this company.

[CG]

Shanghai happens to be THE economic powerhouse of China, the second biggest economy in the world.

The Shanghai Municipal Council is the commercial arm of the local government of the Shanghai region.

Bright Foods is the commercial & industrial food operating arm of the Council.

Connect the dots.

Enough assurances were made by Bright's executives & finally, the Chairman himself no less - that they stand steadfast behind Synlait. 

Seems to me that some posters cannot but see everything Synlait as negative & beyond salvation but cannot see the above.

Alright, lets talk about Synlait. Pokeno has been online for 4 years now and all these years it was hugely underutilized and burning cash as there is no tomorrow. Question is why this mighty shareholder and food operator have done nothing all these years and only now started showing its "power" and support? All they had to do was load it with its mighty orders and Pokeno would be hugely profitable.

Just to be clear - I'm and was 100% positive that Synlait will survive in one form or another and all thanks to Bright, not sure about smaller shareholders though.

[Teitei]

Alright, lets talk about Synlait. Pokeno has been online for 4 years now and all these years it was hugely underutilized and burning cash as there is no tomorrow. Question is why this mighty shareholder and food operator have done nothing all these years and only now started showing its "power" and support? All they had to do was load it with its mighty orders and Pokeno would be hugely profitable.

Just to be clear - I'm and was 100% positive that Synlait will survive in one form or another and all thanks to Bright, not sure about smaller shareholders though.

Answer - 2.5 years of Covid impact.  Pokeno could not have been commissioned at a worse possible time - May 2020!

Same Covid impact which saw A2M's fortunes and sp just about collapsed, remember?  A2M is still a long way from recovering the past glory it enjoyed effortlessly until Covid.  And A2M was held up as THE Covid Success story initially, remember?

As for Bright, the Chairman himself said China is only in recent times recovering from the downturn.

We are in agreement about having a look during the CR - I have never ever said otherwise except that unlike others here, I never believed Synlait would fall over.

Where has Minimoke the doomsday merchant disappeared to?

[Buzz]

[...]
Same Covid impact which saw A2M's fortunes and sp just about collapsed, remember?  A2M is still a long way from recovering the past glory it enjoyed effortlessly until Covid.  And A2M was held up as THE Covid Success story initially, remember?

It may been held up as the Covid success story, but ATM was screwed by the demise of the Daigou channel. Since then, it has reorganised China distribution and the market has rewarded this with a 90% upside in SP.

This is not about ATM, this is about whether SML will survive and prosper. Either of which are not obvious at the moment. This is about SML's survival.

[Teitei]

It may been held up as the Covid success story, but ATM was screwed by the demise of the Daigou channel. Since then, it has reorganised China distribution and the market has rewarded this with a 90% upside in SP.

This is not about ATM, this is about whether SML will survive and prosper. Either of which are not obvious at the moment. This is about SML's survival.

I mentioned ATM because it puts Synlait's problems in perspective. They are similar except that ATM was an established player with a superb track record whileas Pokeno was a start up during the Covid period.

I believe SML will not only survive but prosper with Bright's involvement  - my concern is whether the prosperity Will he shared with minorities.

[CG]

Answer - 2.5 years of Covid impact.  Pokeno could not have been commissioned at a worse possible time - May 2020!

Same Covid impact which saw A2M's fortunes and sp just about collapsed, remember?  A2M is still a long way from recovering the past glory it enjoyed effortlessly until Covid.  And A2M was held up as THE Covid Success story initially, remember?

As for Bright, the Chairman himself said China is only in recent times recovering from the downturn.

We are in agreement about having a look during the CR - I have never ever said otherwise except that unlike others here, I never believed Synlait would fall over.

Where has Minimoke the doomsday merchant disappeared to?

Covid, eh? Is this thing still around? Looks like Bright is a bit slow to recover compare to others. Maybe not that almighty after all? Nah, she'll be alright

[snapiti]

Alright, lets talk about Synlait. Pokeno has been online for 4 years now and all these years it was hugely underutilized and burning cash as there is no tomorrow. Question is why this mighty shareholder and food operator have done nothing all these years and only now started showing its "power" and support? All they had to do was load it with its mighty orders and Pokeno would be hugely profitable.

Just to be clear - I'm and was 100% positive that Synlait will survive in one form or another and all thanks to Bright, not sure about smaller shareholders though.

Pokeno has never attracted enough milk supply volume so plant is very underutilized

[Teitei]

Pokeno has never attracted enough milk supply volume so plant is very underutilized

Pokeno needs to attract more milk suppliers and the only way it can do that is by paying a higher payout rate than its competitors. It can only do that if the plant produces higher value nutritional dairy products.

Also, Synlait needs to show that it is financially robust so the farmers are confident of the long term future of the company.

A lot to do for Synlait in the next 3 years!

[BlackPeter]

Shanghai happens to be THE economic powerhouse of China, the second biggest economy in the world.

The Shanghai Municipal Council is the commercial arm of the local government of the Shanghai region.

Bright Foods is the commercial & industrial food operating arm of the Council.

Connect the dots.

Enough assurances were made by Bright's executives & finally, the Chairman himself no less - that they stand steadfast behind Synlait. 

Seems to me that some posters cannot but see everything Synlait as negative & beyond salvation but cannot see the above.

I think just a normal cross purpose discussion.

The discussion whether Synlaits retail shareholders (and bondholders) might be shafted is absolutely uncorrelated to the discussion whether Synlait (or at least its production facilities) will survive. Different things, and Chinese money is clearly only interested in the second part.

The other thing is - while hearing your admiration for one of Chinas economic hubs ... The role played by Synlait's board was pathetic. Given that China always controlled the board am I wondering what this says about their investment abilities.

Lets face it, the Chinese appointed one of our clapped out NZ politicians (Richardson) to hold their flag at the board table, because they didn't even understand that politicians are useless at board tables anyway (wrong skill sets) and that they have in NZ not even mana left after they left politics. Bunch of idiots.

To make things worse, they filled the rest of their allotment to control the board with young Chinese faces whose major qualification was to play with their cell phones during AGM's and board meetings. Many of the Chinese reps would have found it hard to follow any board discussion held in English anyway, so good that they could do at least some unrelated work during this time.

Bright and the Chinese contributed to the board nothing useful and they allowed Synlait to go down the drain. Sure - some of it was their own money they destroyed, so - fair enough, but all the shareholders who relied on them as strong partner - tough luck.

While I agree with you, that Dunsandel is highly likely to survive and to move firmly into Chinese hands - this does not mean that any of this is good for current Synlait retail share or bond holders. Different things. And no, it does not show either any particular Chinese investment or company management skills - its just money speaking.

Great example for how to build a small company by running down a big one.

[Poet]

I think just a normal cross purpose discussion.

The discussion whether Synlaits retail shareholders (and bondholders) might be shafted is absolutely uncorrelated to the discussion whether Synlait (or at least its production facilities) will survive. Different things, and Chinese money is clearly only interested in the second part.

The other thing is - while hearing your admiration for one of Chinas economic hubs ... The role played by Synlait's board was pathetic. Given that China always controlled the board am I wondering what this says about their investment abilities.

Lets face it, the Chinese appointed one of our clapped out NZ politicians (Richardson) to hold their flag at the board table, because they didn't even understand that politicians are useless at board tables anyway (wrong skill sets) and that they have in NZ not even mana left after they left politics. Bunch of idiots.

To make things worse, they filled the rest of their allotment to control the board with young Chinese faces whose major qualification was to play with their cell phones during AGM's and board meetings. Many of the Chinese reps would have found it hard to follow any board discussion held in English anyway, so good that they could do at least some unrelated work during this time.

Bright and the Chinese contributed to the board nothing useful and they allowed Synlait to go down the drain. Sure - some of it was their own money they destroyed, so - fair enough, but all the shareholders who relied on them as strong partner - tough luck.

While I agree with you, that Dunsandel is highly likely to survive and to move firmly into Chinese hands - this does not mean that any of this is good for current Synlait retail share or bond holders. Different things. And no, it does not show either any particular Chinese investment or company management skills - its just money speaking.

Great example for how to build a small company by running down a big one.

100% agree, and now small shareholders have handed Bright the key to further benefit themselves at the expense of small shareholders.
Most sensible thing to have done yesterday was vote against the proposal and force Bright's hand when they were in a vulnerable position. Now, just watch them make off with the prize...

[Teitei]

100% agree, and now small shareholders have handed Bright the key to further benefit themselves at the expense of small shareholders.
Most sensible thing to have done yesterday was vote against the proposal and force Bright's hand when they were in a vulnerable position. Now, just watch them make off with the prize...

Bright was never in a vulnerable position - A2M the eunuch was and still is.

Get used to that fact and then, start thinking about whether Synlait is worth considering any further as an investment during the rights trading.

[Clearasmud]

Bright was never in a vulnerable position - A2M the eunuch was and still is.

Get used to that fact and then, start thinking about whether Synlait is worth considering any further as an investment during the rights trading.

Do you think that if Bright gets control of Synlait then it could become the biggest customer of Synlait and get the  output near cost.
 If so Would this transfer price be legal?
Does A2M already get its product cheap.
Does A2m really need Synlait in the medium term in your opinion.
I know little about Synlait.