(Reuters) – Infant formula maker Bellamy’s Australia said on Wednesday it won approval to sell some products in Chinese stores, easing a regulatory roadblock that had beset the company for years and sending its shares soaring.
Though not a final or company-wide approval, it suggested an end was in sight to the regulatory limbo that has beset the closely watched Australian exporter and dragged on its shares.
Since the start of 2018, China has said its State Administration for Market Regulation (SAMR) must approve sales of imported formula after lingering safety concerns about domestic product prompted a wave of imports.
Tasmania island-based Bellamy’s had been waiting for approval for a few years, and said on Wednesday it had received three SAMR clearances for formula produced at its ViPlus Dairy plant in Victoria state.
It still needed final clearance and the approvals did not cover formula made at another one of its facilities, the company added.
Bellamy’s shares rose nearly a quarter in afternoon trading before closing up 16 percent, their biggest gain in 15 months, while the broader Australian market rose 1 percent. The stock is still down 51 percent from a year earlier.
“This is a partial win but it’s not there yet,” said Mathan Somasundaram, a market portfolio strategist at Blue Ocean Equities.
Bellamy’s regards China as its top growth market, which it relies on for most of its sales via Chinese shoppers in Australia who re-sell products at home.
In February, it said its half-year profit fell almost two thirds, hit by delays securing regulatory approvals in China and falling domestic sales.
Reporting by Byron Kaye in SYDNEY and Rushil Dutta in BENGALURU; Editing by Himani Sarkar and Neil Fullick