Why the Wattle Health Australia Ltd share price is going nuts

Wattle Health Australia Ltd (ASX:WHA) shares are soaring on a Vietnamese deal.

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The Wattle Health Australia Ltd (ASX: WHA) share price is up 10 per cent to a record high of $1.03 this morning after the infant formula manufacturer revealed it has been granted a 10-year importation and retailing license in Vietnam.

The company will utilise the license via the creation of a Vietnamese subsidiary and once registered with the Vietnamese government it intends to sell its baby food and nutritional dairy products in the country.

Wattle Health is attempting to follow the footsteps of trailblazers the a2 Milk Company Ltd (Australia) (ASX: A2M) and Bellamy's Australia Ltd (ASX: BAL) in capitalising on growing demand for Australian baby formula from Asian countries in particular.

For the quarter ending June 30 2017 Wattle posted sales revenue of just $29,519, although it claimed sales for the period 1 July to 25 July 2017 were more than $200,000. The company posted an operating cash loss for the quarter of $1.34 million, but traders are ascribing a market value around $51 million to the business.

Another high-flying baby formula business for now is Bubs Australia Ltd (ASX: BUB) with its shares up more than 11,000% since the start of the year. It's also loss-making and faces competition from powerful international players in the infant formula space.

Motley Fool contributor Motley Fool Staff has no position in any 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 Bruce Jackson.

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