NZSE:SML

Stock Analysis Report

Executive Summary

Synlait Milk Limited manufactures and sells dairy products in China, rest of Asia, the Middle East, Africa, New Zealand, Australia, and rest of world.

Snowflake

Fundamentals

Acceptable track record with moderate 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


Market Performance


7 Day Return

-1.6%

NZSE:SML

-5.5%

NZ Food

-1.2%

NZ Market


1 Year Return

-16.2%

NZSE:SML

-3.4%

NZ Food

10.5%

NZ Market

SML underperformed the Food industry which returned -3.4% over the past year.

SML underperformed the Market in New Zealand which returned 10.5% over the past year.


Share holder returns

SMLIndustryMarket
7 Day-1.6%-5.5%-1.2%
30 Day-1.7%-11.2%-1.6%
90 Day1.2%-10.3%3.3%
1 Year-16.2%-16.2%-2.0%-3.4%15.3%10.5%
3 Year164.7%156.5%71.1%54.9%43.4%24.0%
5 Year186.4%177.5%110.3%72.0%101.8%56.2%

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 based on future cash flows and its price relative to the stock market?

>50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Synlait Milk's share price is below the future cash flow value, and at a moderate discount (> 20%).

Synlait Milk's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

Synlait Milk is overvalued based on earnings compared to the NZ Food industry average.

Synlait Milk is overvalued based on earnings compared to the New Zealand market.


Price Based on Expected Growth

Synlait Milk is poor value based on expected growth next year.


Price Based on Value of Assets

Synlait Milk is overvalued based on assets compared to the NZ Food industry average.


Next Steps

  • Explore potentially undervalued companies in the Food, Beverage & Tobacco industry.

Future Growth

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

13.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Synlait Milk's revenue is expected to grow by 18.4% yearly, however this is not considered high growth (20% yearly).

Synlait Milk's earnings are expected to grow by 13.1% yearly, however this is not considered high growth (20% yearly).

Synlait Milk's revenue growth is expected to exceed the New Zealand market average.

Synlait Milk's earnings growth is expected to exceed the New Zealand market average.

Synlait Milk's earnings growth is expected to exceed the low risk savings rate of 2.4%.


Earnings per Share Growth Estimates


Future Return on Equity

Synlait Milk is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has Synlait Milk performed over the past 5 years?

39.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Synlait Milk has delivered over 20% year on year earnings growth in the past 5 years.

Synlait Milk's 1-year earnings growth is less than its 5-year average (0.5% vs 39.7%)

Synlait Milk's earnings growth has not exceeded the NZ Food industry average in the past year (0.5% vs 9.5%).


Return on Equity

Synlait Milk has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Synlait Milk used its assets more efficiently than the NZ Food industry average last year based on Return on Assets.


Return on Capital Employed

Synlait Milk has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Synlait Milk's financial position?


Financial Position Analysis

Synlait Milk's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

Synlait Milk's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Synlait Milk's level of debt (63.5%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (88.7% vs 63.5% today).

Debt is not well covered by operating cash flow (18.3%, less than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 14.6x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 1.1x debt.


Next Steps

Dividend

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

0.89%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Unable to evaluate Synlait Milk's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.

Unable to evaluate Synlait Milk's dividend against the top 25% market benchmark as the company has not reported any payouts.

Unable to perform a dividend volatility check as Synlait Milk has not reported any payouts.

Unable to verify if Synlait Milk's dividend has been increasing as the company has not reported any payouts.


Current Payout to Shareholders

Unable to calculate sustainability of dividends as Synlait Milk has not reported any payouts.


Future Payout to Shareholders

No need to calculate the sustainability of Synlait Milk's dividends in 3 years as they are not expected to pay a notable one for New Zealand.


Next Steps

Management

What is the CEO of Synlait Milk's salary, the management and board of directors tenure and is there insider trading?

2.5yrs

Average management tenure


CEO

Leon Clement 0

1.0yrs

Tenure

0

Mr. Leon Clement has been the Managing Director for Sri Lanka at Fonterra Brands (Thailand) since December 1, 2012. He is Chief Executive Officer at Synlait Milk Ltd. since August 13, 2018. He joined Synl ...


Management Age and Tenure

2.5yrs

Average Tenure

The tenure for the Synlait Milk management team is about average.


Board Age and Tenure

6.2yrs

Average Tenure

67yo

Average Age

The tenure for the Synlait Milk board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellNZ$11,024,15308 Oct 18
John Penno
EntityIndividual
Role
Member of the Board of Directors
Co-Founder & Director
Shares1,020,755
Max PriceNZ$10.80

Ownership Breakdown


Management Team

  • Boyd Williams

    Director of People

    • Tenure: 2.5yrs
  • John Penno

    Co-Founder & Director

    • Tenure: 0.0yrs
  • Nigel Greenwood

    Chief Financial Officer

    • Tenure: 0.0yrs
  • Leon Clement

    Chief Executive Officer

    • Tenure: 1.0yrs
  • Martijn Jager

    Director of Sales & Business Development

    • Tenure: 2.5yrs
  • Roger Schwarzenbach

    General Manager of Innovation & Technical Services

    • Tenure: 2.0yrs
  • Deborah Marris

    Director of Legal

    • Tenure: 0.0yrs
  • Dan Walraven

    Communications Manager

    • Tenure: 0.0yrs

Board Members

  • Ruth Richardson (67yo)

    Non-Executive Director

    • Tenure: 15.6yrs
  • Graeme Milne (65yo)

    Chairman

    • Tenure: 0.0yrs
  • Bill Roest (71yo)

    Independent Non-Executive Director

    • Tenure: 6.3yrs
  • Sam Knowles

    Independent Non-Executive Director

    • Tenure: 6.1yrs
  • John Penno

    Co-Founder & Director

    • Tenure: 0.0yrs
  • Edward Yang

    Director

    • Tenure: 9.0yrs
  • Albert Lu

    Director

    • Tenure: 3.7yrs
  • Min Ben

    Director

    • Tenure: 2.8yrs

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$1.663b
  • Shares outstanding: 179.22m
  • Website: https://www.synlaitmilk.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SMLNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDJul 2013
SM1ASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJul 2013
SM1CHIA (Chi-X Australia)YesOrdinary SharesAUAUDJul 2013

Biography

Synlait Milk Limited manufactures and sells dairy products in China, rest of Asia, the Middle East, Africa, New Zealand, Australia, and rest of world. It provides nutritional products, including infant and ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/22 10:34
End of Day Share Price2019/08/22 00:00
Earnings2019/01/31
Annual Earnings2018/07/31


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.