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Up 172%: Synlait Milk Ltd is growing into a baby formula star

Players in the baby formula space have been going gangbusters for some time now and New Zealand-based dairy processing company Synlait Milk Ltd (ASX: SM1) is no exception.

Shares in Synlait Milk are at a 52-week high – up to $9.01 at the time of writing – a 172% rise from its $3.30 share price at this time last year.

Synlait announced last week it had secured a multi-year supply agreement to double the lactoferrin manufacturing capacity at its plant near Christchurch off the back of growing global demand for its infant formula products.

Synlait reported a first-half profit of $40.7 million – quadrupling its gain from the previous corresponding period as its relationship with A2 Milk Company Ltd (ASX: A2M) continues to strengthen.

While emerging small cap Jatenergy Ltd (ASX: JAT) begins to tussle for market share in the space it will be some time before any of the smaller players get close to Bellamy’s Australia Ltd’s (ASX: BAL) and A2 Milk’s status.

Bubs Australia Ltd (ASX: BUB) is still trundling along in the sector, with share prices up 0.6% today to 81c per share.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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