SML - Synlait

[Buzz]

In a nutshell, their very high debt level and current interest rates is killing profitability.
The shares were more than $3.50 as recently as mid February 2023 !..before their bombshell disaster half year report and then the bombshells just keep on coming...  Pretty rare you ever get to see an NZX50 constituent company lose ~ 60% of its value in less than 3 months.
If you want to catch a falling knife buzz, be my guest and fill your boots, and good luck to ya  (I prefer all my fingers to remain intact and not be sliced to bits).

Thanks for your thoughts, though there's no way I'd be buying this while the TA is so bad, but interested to keep monitoring its business performance and when (if) the TA comes right, it could be worth a small % of portfolio. Might be a long wait though.

[winner (n)]

"Customer S" will be the saviour

In a years time we'll be saying 'what was all the fuss about?"

[Basil]

"Customer S" will be the saviour

In a years time we'll be saying 'what was all the fuss about?"

Are you "punting" real money on that mate ?  If so you should get a dawn flight up and go and do the Pokeno investor day tomorrow.
If you're really lucky they might throw in some pink muffins for morning tea...😉

[winner (n)]

Are you "punting" real money on that mate ?  If so you should get a dawn flight up and go and do the Pokeno investor day tomorrow.
If you're really lucky they might throw in some pink muffins for morning tea...😉

Pokeno site visit tomorrow .......Grant points to some stainless steel 'And this is where Abbots stuff is formulated ...24 hours a day" and then later on in another big room "this is where the Abbots stuff is packaged. 24 hours a day" .........."and we started all this last week"

Don't need to fly up

[Basil]

But that means you'll miss the powhiri and the pink muffins served on biodegradable paper plates.
That's a money can't buy experience mate 

[Buzz]

Speaking of TA, this would have to be the worst chart on the NZX. No analysis required, it speaks for itself. https://invst.ly/-z8at

 

[Basil]

LOL nice choice of colour.  That's a very scary looking chart.

[Buzz]

LOL nice choice of colour.  That's a very scary looking chart.

Like the rainbow MA's as well? Thoughtful TA, it makes all the difference. This is a weekly chart, log scale, so it tends to make those falls look even more dramatic, although they are dramatic, especially collapsing down from the trading range back to March 2021. The market is abandoning SML, for good reason. This is not a falling knife, it is a guillotine. I'd not touch it until I saw a profound fundamental turnaround and a market price sentiment reflecting that. Currently, it looks like a business going out of business, but even I doubt that will happen, there is too much vested interest to let this fail. So, there's an opportunity, albeit for the patient.

[Buzz]

Have you noticed that quite a few Directors are only 1-2 years into their roles, I reckon they probably got their jobs to turn around this basket case. It was looking like they might have stabilised, if not recovered, since March 2021, but now, I'll be thinking they're feeling rather squeamish and vulnerable.

[Minimoke]

Like the rainbow MA's as well? Thoughtful TA, it makes all the difference. This is a weekly chart, log scale, so it tends to make those falls look even more dramatic, although they are dramatic, especially collapsing down from the trading range back to March 2021. The market is abandoning SML, for good reason. This is not a falling knife, it is a guillotine. I'd not touch it until I saw a profound fundamental turnaround and a market price sentiment reflecting that. Currently, it looks like a business going out of business, but even I doubt that will happen, there is too much vested interest to let this fail. So, there's an opportunity, albeit for the patient.

Things like AirNZ are too big too fail because their is significant government interest. No such interest in SML. At some point the bankers will look to recover whatever is left of their loans.

SML's payables far exceeded receivables. So debters will be very nervous and fighting for cash as it becomes available. The banks also fighting for the cash too - even if it is just to pay the interest on their loans.  Bond holders would like to fight for the cash but are stymied unless they can flick the bond off.

SML need a recovery plan. SAMR registration is not part of it.

The new International customer won't be part of it either. Remember how quickly SML bought Pokeno land (very odd) and how very quickly they managed to design and build Pokeno. Even with the main contractor going bust. It went up at lightening speed. All they had to do was add in a bit of cannning and rejig manufacturing for this new customer and its taken years and years and years.

And now a customer has wound back orders. Wasn't A2 - so who was it?

[winner (n)]

Hope they don't default on what's due to supplier farmers

That would be bad

[winner (n)]

The yahoo version of SML rainbow moving averages

I think I can see where Basil sold out .....cool

You cannot view this attachment.

[Basil]

Like the rainbow MA's as well? Thoughtful TA, it makes all the difference. This is a weekly chart, log scale, so it tends to make those falls look even more dramatic, although they are dramatic, especially collapsing down from the trading range back to March 2021. The market is abandoning SML, for good reason. This is not a falling knife, it is a guillotine. I'd not touch it until I saw a profound fundamental turnaround and a market price sentiment reflecting that. Currently, it looks like a business going out of business, but even I doubt that will happen, there is too much vested interest to let this fail. So, there's an opportunity, albeit for the patient.

Great skills there, reminds me of the TA and charting skills Baa Baa has on the other site 

Hope they give the institutional shareholders a full flavor taste of what Synlait is all about today.
Shouldn't be that hard to find a few staff of various races that are Gay, Lesbian or Transgender to not only hand out pink muffins at morning tea but to spend a lot of the day leading the proceedings talking about Synlait's fabulous achievements with all things B Corp, diversity and inclusion and how people and the planet are just as important as profit. 

Nice chart there too Winner.  Looks like the outline of one of the steepest and most colorful mountains in the world.

[Minimoke]

Great skills there, reminds me of the TA and charting skills Baa Baa has on the other site 

Hope they give the institutional shareholders a full flavor taste of what Synlait is all about today.
Shouldn't be that hard to find a few staff of various races that are Gay, Lesbian or Transgender to not only hand out pink muffins at morning tea but to spend a lot of the day leading the proceedings talking about Synlait's fabulous achievements with all things B Corp, diversity and inclusion and how people and the planet are just as important as profit. 

Nice chart there too Winner.  Looks like the outline of one of the steepest and most colorful mountains in the world.

I'm terribly disappointed to see B Corp has a lead team of 12 people. 2 men, 10 women. Doesnt seem very diverse or representative of our community to me.

And also disappointing to not their incorrect interpretation when they say "In Aotearoa, we pay our respects to ngā Iwi taketake, and honour the principles of Te Tiriti o Waitangi: protection, participation, and partnership." No wonder Synlait is a bit muddled.

And as a final word of warning to those thinking about investing in SML "B Lab is a nonprofit network transforming the global economy to benefit all people, communities, and the planet. We certify companies — B Corps — who lead the way. But more than that, we're building a movement to change our economic system". How is that change in the economic system working out for shareholders. That "change" I reckon  = destruction of shareholder wealth.

Never mind, Synlait seems to be sharing company with some great compannies
- Almighy Beverages Ltd "Conscious, clean, delicious drinks made by nature for those with a thirst for life."
- AWWA "Our products help people all around the globe to manage their monthly cycles with confidence and connection without the negative impact associated with single use period products."
- Banquer "Banqer was founded by an an ex-accountant, an educator, a designer & a developer."

And the list goes on and I suspect most companies dont employ more than 10 people. So all well and good if they go bust (which I reckon most will) then its only their own personal money they are taking down with them.


And a bit more on B Corp
"But we do much more than that. We're building the B Corp movement to change our economic system — and to do so, we must change the rules of the game. B Lab creates standards, policies, tools, and programs that shift the behavior, culture, and structural underpinnings of capitalism. We mobilize the B Corp community towards collective action to address society's most critical challenges."

Lets be very clear - Synlait is committed to changing the structural underpinnings of capitalism. They really need to de-list and strive towards this ambition on their own coin. Not on the coin held by capitalist banks or investors.

For their survival I expect Synlait to announce today at the Investors Update that they are withdrawing from B Corp and will instead focus on, not the principles of the treaty, but the principles of capitalism. And the main underlying feature of capitalism is the motivation to make a profit.
-

[BlackPeter]

Speaking of TA, this would have to be the worst chart on the NZX. No analysis required, it speaks for itself. https://invst.ly/-z8at

 

I can remember over the years a number of worse looking charts - and I guess for SML the question is still open, whether it will end like a Greek tragedy or whether it will have a happy ending.

They do have a lot of stainless steel, they have some quite modern manufacturing facilities, and I assume that in the meantime they learned as well how to use them. When I saw the canning line in Dunsandel some years ago, it was still trial and error ... with interesting charts at the walls showing the begin of a learning curve, but given the huge margins they had at that time with every can of A2 Platinum, nobody cared.

What I am saying is - I think they well should be able to favourably compete with Fonterra, if they get rid of a quite inept board and management team. As a starter, they need a board where everybody understands the industry (too many political assignments, some of them quite colourful, but its not about entertainment) and where everybody is able to command the same language. Some of them are quite proficient in Chinese, but speak only quite limited English, and I recon half of them don't speak any Chinese at all. Makes in depth discussions around the board table quite difficult.

Chinese corner stone holder (some 40%) basically controls the board ... and add to that the NZ political bird - I recon they need to stop this nonsense - they need more people with both feet on the ground and understanding the industry to run the company.

And obviously - they need to learn some basic recruitment skills - unbelievable they did fall for this pink loving Fonterra dropout as CEO.

It won't be a growth industry, but I think they should be able to turn this company profitable again. The world does need quality food. Question is - how much money can they make if things go well, and - do they have what it takes to get the company back on track?