Proposed Directors of Tirupati Graphite explain why they have requisitioned an GM. Watch the video here.
Hi LOTM
I agree with what you say. There is no indicator in the numbers to point clearly to a brighter future for Synthomer. But there are clues. New management at Eastman - disposals that help repair the balance sheet - focus on improving operations e.g. streamlining manufacturing facilities and so on. The sort of actions that you would want and expect to see before a turnaround. I think your last point about sentiment is pertinent - there are now more "believers" who have brought the price up – but there will be continued volatility for a while yet.
FS
Bit of a bad day today (Wenesday) for the Synthomer share price. So I asked ChatGPT what it thought the market outlook was for speciality polymers and Synthomer. And it's conclusion was...
The specialty polymers market is poised for robust growth driven by technological advancements, sustainability trends, and increasing industrial applications. Synthomer, with its strategic initiatives and strong market position, is well-placed to capitalize on these opportunities. The company’s focus on innovation and sustainability will be key to maintaining its competitive edge and driving future growth.
Which made me feel a bit better.
FS
U.S. Hikes Tariffs on Chinese Gloves (on May 14th). Is this driving current share price rise?
Anyone?
Hi GMHK - I don't really know what price to expect for Synthomer in the short term. I can't give you a number. If I had to - I could only give you a range - say 250p to say 350p. There is no calculation behind this, no chart, just a guess.
Like you I am an original (pre RI) holder of Synthomer but I buy shares only on a long-term basis. I have various criteria for my investments including that I hold a limited number of investments (currently 8 shares) and I invest in established technology companies e.g. in Pharma, defense, and precision instruments. Synthomer was my chemical industry choice. I chose them because I felt their planned product focus was interesting, and my very basic research indicated they were key players in several interesting continuing markets. However, and maybe like you, I underestimated the impact of the Eastman purchase - its timing, the price paid, the operational issues etc. I now consider Synthomer a "good" investment - for which I have unfortunately overpaid.
I have of course bought more shares in Synthomer through the RI and after, because I still believe in the company. I believe the shares have a large upside potential but accept that this will not happen until volumes return to the chemical sector - and if that does not happen in the next few years, Synthomer could be in trouble again. But as far as I can see the management are cognisant of the risks and have taken reasonable steps to cover them and prepare the company for the upturn. To me the risk reward outlook is favourable particularly if they can sell more non-core operations.
Lastly, as to a future (mid-term) share price - again I don't have a calculated timeframe or number ... but as an indicator ... I am expecting a wait of say 2 years (+?) - I don't see economies improving in a shorter timeframe - and a price north of £7 (back of the envelope calculations based on previous share prices, information in the RI documentation and competitor share prices - all very rough stuff) as indicators.
Regards
I agree largely with the two recent comments from Wigwammer and GMHK. As indicated in this update and recent competitor comments, the chemical market seems to continue plodding along the bottom - with some small positive indicators but no visible signs of any substantial improvement. Much the same as in the last update.
The recent debt refinancing puts the group in a better position to implement their announced business strategy - which from public statements seems to me to be in process - and puts the business on a firmer mid-term financial footing. But absent of any new announcement e.g. of a substantial disposal of a non-core business, I assume, subject to emotions and short term trading activities, there is no cause to expect any substantial upward price movements - although given that I am still heavily under water I would like very much to be proved wrong on this assumption.
LOTM
Thanks for the info. And now like you I am confused by the current actions.
FS
LOTM
I don't know where the current debt is traded, so I can't check, but I assume, given the interest rate on this debt, it is trading at less than par. I guess therefore this is what makes the sums add up for the buy back.
FS
GMHK - Thanks for your reply. How do you reach your conclusion on price - 350/150/450? Is it calculation, extrapolation, some insight on speciality chemicals or whatever? Genuine question. Thanks.
GMHK
You indicate that 350 p is your target share price for Synthomer. On 164m shares that implies a market value of around £574m. Assuming a P/E of around 10 that implies earnings of around £57m. If the market for speciality chemicals is to return to "normal" is that not a bit conservative? Or have I got the maths wrong?
I am a long term holder not a trader (don't have the skills). I have added 5,200 shares today to bring my average buying price to £5. There will be surely be movement around the current price, particularly since it seems to jump around on very small volumes. But my sense of the new management is caution and competence, although, of course, they need some luck on the timing of a demand upturn. Clearly a risky investment but so far so good. I will buy more shares if the price goes north of 200p, otherwise I wil hold.
Red Sea crisis seeps into German chemicals sector.
See here: https://uk.investing.com/news/stock-market-news/red-sea-crisis-seeps-into-german-chemicals-sector-3305622
Any thoughts / relevant knowledge?
MoD’s £10-a-shot laser beam which will ‘revolutionise warfare’ fired for first time (From The Telegraph)
See: https://www.telegraph.co.uk/news/2024/01/19/dragonfire-laser-beam-fired-for-first-time-defence-ministry/
Sorry - wrong board
MoD’s £10-a-shot laser beam which will ‘revolutionise warfare’ fired for first time (From The Telegraph)
See: https://www.telegraph.co.uk/news/2024/01/19/dragonfire-laser-beam-fired-for-first-time-defence-ministry/
Raydio
There seem to be numerous areas of interesting future developments that Synthomer has a stake in - and where they appear to be regarded as a "player" e.g. battery binders - see here:https://finance.yahoo.com/news/global-battery-binders-market-size-093000461.html
Short term the share price is very volatile, clearly. Long term we probably won't have any numeric indicators until next year. But on the basis of publice information, the new board's positive public statements appear to have substance.
And as a (semi) connected follow up ...
The University of Leeds has a multidisciplinary approach to AI, with its Digital Manufacturing Group applying technologies to industrial challenges, and links to companies such as AstraZeneca, GlaxoSmithKline, Pfizer, Syngenta, IBM, Infineum and Synthomer.
With nothing better to do I asked ChatGPT to criitique the latest Synthomer Trading statement. It said :
In summary, the statement effectively communicates Synthomer's current position, strategic moves, and outlook. Further detailing specific metrics, market insights, risk management, and customer demand factors could contribute to a more comprehensive understanding for stakeholders.
I can't answer your main question, but I can answer a broader one as an investor who purchased in May 2022 and stayed in and took up my full entitlement in the rights issue.
I bought in originally at £3.07 and averaged down over time to just before the rights issue was announced to £1.87. My last pre RI purchase was at 67p. I estimate I lost around 80% of my original investment after the RI was announced and the old share price dropped to 42p (ish).
On my larger investment (after the rights issue) I am today around 70% down on my total investment to date at the current price of £1.95 ish. About £50k down.
As a recent stock market investor (4 years or so) Synthomer has been an interesting experience. Today with a not too bad announcement from the directors, at least against a fairly decimated chemical sector, there has been a price movement between £2.15 when I looked this morning and a current price of approx £1.95 at 4PM And this on net sale and bought volumes of almost zero (approx £430k bought and £350k sold). Today is as interesting a day as any.
Hi MikeS02
Thanks for the post. You are correct. It appears Mr Catto has only taken up one third of his RI entitlement. As I am fairly heavily invested in the outcome of this company, I will (perhaps foolishly) still take some comfort from this.
I think the director in question (A Catto) owned 1.2m shares pre the consolidation - 60k new shares afterwards. So with his 60k new shares he has 360k rights (less the 50k he has just sold). Even after selling the 50k rights, assuming he takes up the balance, he has to find £600k approx. Maybe he just doesn't have the other £100k to to take up his full entitlement in the rights issue? Or am I (quite possibly) missing something / wrong?