Overall, it's been a good year for SYNLAIT FPO NZX (ASX: SM1) shareholders but the past few months have seen the milk company's share price come down.
So, is it time to sell as some analysts have suggested?
Synlait shares have returned more than 90 per cent over the last year but have dropped by 16 per cent since late October when they were going for $7.43.
Synlait shares are now trading for about $6.14.
The New Zealand dairy company which claims to harness the "full power of milk to deliver the best in human health and nutrition" has been growing over the past five years with a greater footprint in China, like its partner a2 Milk Company Ltd (Australia) (ASX: A2M).
Synlait, with a market cap of about $1.11 billion, reported revenue of $759 million for financial year (FY) 2017, up by almost 39 per cent on FY 2016's figure of $546.9 million.
Although Synlait demonstrated a significant increase in revenue for FY 2017 when compared to the previous period, Synlait's revenue growth has not been so consistent in the last few years.
In FY 2014 revenue hit $600.5 million but dropped back to $448 million for FY 2015.
As such, Synlait's recent figures do not look so impressive when stacked against FY 2014's numbers.
And, while revenue in FY 2017 was up significantly on the previous year, the company only managed to increase profit by less than 10 per cent year-on-year to arrive at $110.4 million.
However, Synlait did reduce its debt to $83 million in FY 2017, down from the $214 million it recorded for FY 2016.
The company now has a debt to equity ratio of about 18 per cent, far healthier than the 46.8 per cent reported for FY 2016.
And while some analysts are rating Synlait as a sell, there are strong factors that point in the other direction.
The infant formula business offers the chance of lucrative returns, particularly on the back of growing demand in China.
But the space is not without competition and, as a2 Milk dominates, others such as Bellamy's Australia Ltd (ASX: BAL) and Bubs Australia Ltd (ASX: BUB), appear to be strengthening and attracting interest from investors.
Synlait's financial position appears to be growing stronger and, amid a partnership with a2 Milk and recent expansions in its production capabilities, looks like it will continue to grow.
If a series of registrations of Synlait brands in China proves successful then the company's prospects of future expansion in China would look brighter.
As such, Synlait's recent dip looks more like an opportunity to buy than a case to sell.
