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 internationally.

Snowflake

Fundamentals

Proven 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

7.8%

SML

0.6%

NZ Food

1.1%

NZ Market


1 Year Return

4.1%

SML

1.9%

NZ Food

19.1%

NZ Market

Return vs Industry: SML exceeded the NZ Food industry which returned 1.9% over the past year.

Return vs Market: SML underperformed the NZ Market which returned 19.1% over the past year.


Shareholder returns

SMLIndustryMarket
7 Day7.8%0.6%1.1%
30 Day6.5%5.1%2.9%
90 Day-0.9%-11.1%2.5%
1 Year4.1%4.1%3.5%1.9%24.3%19.1%
3 Year193.9%193.9%60.1%46.8%55.8%35.5%
5 Year188.5%179.5%91.9%57.5%101.8%56.4%

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?

45.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: SML (NZ$9.7) is trading below our estimate of fair value (NZ$17.63)

Significantly Undervalued: SML is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SML is poor value based on its PE Ratio (21.1x) compared to the Food industry average (19.4x).

PE vs Market: SML is poor value based on its PE Ratio (21.1x) compared to the NZ market (18.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: SML is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: SML is overvalued based on its PB Ratio (3.5x) compared to the NZ Food industry average (1.1x).


Next Steps

Future Growth

How is Synlait Milk forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

12.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SML's forecast earnings growth (12.6% per year) is above the savings rate (2.4%).

Earnings vs Market: SML's earnings (12.6% per year) are forecast to grow faster than the NZ market (7% per year).

High Growth Earnings: SML's earnings are forecast to grow, but not significantly.

Revenue vs Market: SML's revenue (13.2% per year) is forecast to grow faster than the NZ market (4.2% per year).

High Growth Revenue: SML's revenue (13.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: SML's Return on Equity is forecast to be low in 3 years time (17.3%).


Next Steps

Past Performance

How has Synlait Milk performed over the past 5 years?

39.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SML's earnings have grown significantly by 39.2% per year over the past 5 years.

Accelerating Growth: SML's earnings growth over the past year (10.3%) is below its 5-year average (39.2% per year).

Earnings vs Industry: SML earnings growth over the past year (10.3%) exceeded the Food industry -3.4%.


Return on Equity

High ROE: SML's Return on Equity (16.7%) is considered low.


Return on Assets

ROA vs Industry: SML has a higher Return on Assets than the Food industry average last year.


Return on Capital Employed

ROCE Improving: SML has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Synlait Milk's financial position?


Financial Position Analysis

Short Term Liabilities: SML's short term assets (NZ$282.6M) do not cover its short term liabilities (NZ$372.8M)

Long Term Liabilities: SML's short term assets (282.6M) do not cover its long term liabilities (282.8M)


Debt to Equity History and Analysis

Debt Level: SML's debt to equity ratio (70.9%) is considered high

Reducing Debt: SML's debt to equity ratio has reduced from 85.2% to 70.9% over the past 5 years.

Debt Coverage: SML's debt is well covered by operating cash flow (39.2%).

Interest Coverage: SML's interest payments on its debt are well covered by EBIT (16.4x coverage).


Balance Sheet

Inventory Level: SML has a high level of physical assets or inventory.

Debt Coverage by Assets: SML's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

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

0.62%

Forecast Dividend Yield


Dividend Yield vs Market

companyn/amarketbottom25%3.0%markettop25%5.6%industryaverage4.1%forecastin3Years0.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

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

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

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

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

2.7yrs

Average management tenure


CEO

Leon Clement 0

1.2yrs

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

2.7yrs

Average Tenure

Experienced Management: SML's management team is considered experienced (2.7 years average tenure).


Board Age and Tenure

6.3yrs

Average Tenure

67yo

Average Age

Experienced Board: SML's board of directors are considered experienced (6.3 years average tenure).


Insider Trading

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


Ownership Breakdown


Management Team

  • Boyd Williams

    Director of People

    • Tenure: 2.7yrs
  • John Penno

    Co-Founder & Director

    • Tenure: 0yrs
    • Compensation: NZ$55.67k
  • Nigel Greenwood

    Chief Financial Officer

    • Tenure: 9.5yrs
  • Leon Clement

    Chief Executive Officer

    • Tenure: 1.2yrs
  • Martijn Jager

    Director of Sales & Business Development

    • Tenure: 2.7yrs
  • Roger Schwarzenbach

    General Manager of Innovation & Technical Services

    • Tenure: 2.2yrs
  • Deborah Marris

    Director of Legal

    • Tenure: 0yrs
  • Dan Walraven

    Communications Manager

    • Tenure: 0yrs

Board Members

  • Ruth Richardson (67yo)

    Non-Executive Director

    • Tenure: 15.8yrs
  • Graeme Milne (65yo)

    Independent Chairman

    • Tenure: 0yrs
  • Bill Roest (71yo)

    Independent Non-Executive Director

    • Tenure: 6.4yrs
  • Sam Knowles

    Independent Non-Executive Director

    • Tenure: 6.3yrs
  • John Penno

    Co-Founder & Director

    • Tenure: 0yrs
    • Compensation: NZ$55.67k
  • Edward Yang

    Director

    • Tenure: 9.2yrs
  • Albert Lu

    Director

    • Tenure: 3.8yrs
  • Min Ben

    Director

    • Tenure: 2.9yrs

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$1.739b
  • Shares outstanding: 179.31m
  • 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
SM1CHIA (Chi-X Australia)YesOrdinary SharesAUAUDJul 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 internationally. It provides fresh milk; nutritional products, includ ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/19 10:35
End of Day Share Price2019/10/18 00:00
Earnings2019/07/31
Annual Earnings2019/07/31


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.