NZSE:SML

Stock Analysis Report

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Market Cap

NZ$815.3m

Last Updated

2021/08/02 07:01 UTC

Data Sources

Company Financials +

Executive Summary

Synlait Milk Limited, together with its subsidiaries, manufactures and sells dairy products in China, rest of Asia, the Middle East, Africa, New Zealand, Australia, and internationally. More Details


Snowflake Analysis

Undervalued with reasonable growth potential.


Similar Companies

Share Price & News

How has Synlait Milk's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SML is more volatile than 75% of NZ stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: SML's weekly volatility (6%) has been stable over the past year, but is still higher than 75% of NZ stocks.


Market Performance


7 Day Return

-0.5%

SML

-10.3%

NZ Food

-1.4%

NZ Market


1 Year Return

-46.1%

SML

-51.7%

NZ Food

7.6%

NZ Market

Return vs Industry: SML exceeded the NZ Food industry which returned -51.7% over the past year.

Return vs Market: SML underperformed the NZ Market which returned 7.6% over the past year.


Shareholder returns

SMLIndustryMarket
7 Day-0.5%-10.3%-1.4%
30 Day0.8%-13.8%-1.5%
90 Day8.9%-23.7%-3.0%
1 Year-46.1%-46.1%-51.3%-51.7%10.3%7.6%
3 Year-66.5%-66.5%-40.1%-42.2%38.9%21.9%
5 Year10.4%7.0%-0.2%-12.2%68.4%29.6%

Long-Term Price Volatility Vs. Market

How volatile is Synlait Milk's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Synlait Milk undervalued compared to its fair value and its price relative to the market?

48.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SML (NZ$3.69) is trading below our estimate of fair value (NZ$7.16)

Significantly Below Fair Value: SML is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SML is good value based on its PE Ratio (12.5x) compared to the NZ Food industry average (17.9x).

PE vs Market: SML is good value based on its PE Ratio (12.5x) compared to the NZ market (23.8x).


Price to Earnings Growth Ratio

PEG Ratio: SML is good value based on its PEG Ratio (0.2x)


Price to Book Ratio

PB vs Industry: SML's PB Ratio (1x) is in line with the NZ Food industry average.


Future Growth

How is Synlait Milk forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

60.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SML's forecast earnings growth (60% per year) is above the savings rate (2.1%).

Earnings vs Market: SML's earnings (60% per year) are forecast to grow faster than the NZ market (11.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SML's revenue (7.9% per year) is forecast to grow faster than the NZ market (5.4% per year).

High Growth Revenue: SML's revenue (7.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SML's Return on Equity is forecast to be low in 3 years time (8.6%).


Past Performance

How has Synlait Milk performed over the past 5 years?

16.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SML has high quality earnings.

Growing Profit Margin: SML's current net profit margins (3.9%) are lower than last year (6.4%).


Past Earnings Growth Analysis

Earnings Trend: SML's earnings have grown by 16.4% per year over the past 5 years.

Accelerating Growth: SML's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SML had negative earnings growth (-22.1%) over the past year, making it difficult to compare to the Food industry average (4.8%).


Return on Equity

High ROE: SML's Return on Equity (6.7%) is considered low.


Financial Health

How is Synlait Milk's financial position?


Financial Position Analysis

Short Term Liabilities: SML's short term assets (NZ$626.8M) exceed its short term liabilities (NZ$573.2M).

Long Term Liabilities: SML's short term assets (NZ$626.8M) exceed its long term liabilities (NZ$360.6M).


Debt to Equity History and Analysis

Debt Level: SML's debt to equity ratio (59.2%) is considered high.

Reducing Debt: SML's debt to equity ratio has reduced from 147.7% to 59.2% over the past 5 years.

Debt Coverage: SML's debt is not well covered by operating cash flow (4.9%).

Interest Coverage: SML's interest payments on its debt are well covered by EBIT (4.4x coverage).


Balance Sheet


Dividend

What is Synlait Milk current dividend yield, its reliability and sustainability?

0.50%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate SML's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate SML's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SML's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SML's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SML's dividend in 3 years as they are not forecast to pay a notable one for the NZ market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

John Penno

0.25

Tenure

NZ$86,300

Compensation

Dr. John William Penno serves as Interim Chief Executive Officer at Synlait Milk Limited since May 01, 2021. Dr. Penno is a Co-Founder of Synlait Milk Limited since June 21, 2013. Dr. Penno serves as an Ex...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD60.23K) is below average for companies of similar size in the NZ market ($USD491.21K).

Compensation vs Earnings: John's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: SML's management team is considered experienced (2.1 years average tenure).


Board Members

Experienced Board: SML's board of directors are considered experienced (6.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 21.9%.


Top Shareholders

Company Information

Synlait Milk Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Synlait Milk Limited
  • Ticker: SML
  • Exchange: NZSE
  • Founded: 2005
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: NZ$815.310m
  • Shares outstanding: 218.58m
  • Website: https://www.synlait.com

Number of Employees


Location

  • Synlait Milk Limited
  • 1028 Heslerton Road
  • RD13
  • Rakaia
  • 7783
  • New Zealand

Listings


Biography

Synlait Milk Limited, together with its subsidiaries, manufactures and sells dairy products in China, rest of Asia, the Middle East, Africa, New Zealand, Australia, and internationally. The company is also...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/08/02 07:01
End of Day Share Price2021/08/02 00:00
Earnings2021/01/31
Annual Earnings2020/07/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.