Despite a weak start for the broader market, shares of Bellamy's Australia Ltd (ASX: BAL) have managed to climb another 4.6% to $8.39 this morning.
Although many would look at the company's share price – up from an offer price of $1 in August 2014 – and assume it is now overvalued, investors are clearly recognising the enormous potential the company has, particularly in China and other Asian markets.
Bellamy's Australia is a Tasmanian-based company that offers a range of organic food and formula products, targeted to babies and toddlers up to the age of three. The company's rich brand value and organic certification sets it apart from various international rivals, which is reflected by the incredible surge in demand for its products.
Indeed, news last week that China had ditched its one-child policy in favour of a new two-child policy is likely behind today's rally. The new policy could create a surge in new births which will make the baby formula market even more lucrative than it is today.
As we also saw last week, Bellamy's isn't the only company to recognise the opportunity. Blackmores Limited (ASX: BKL) is also in the early stages of making a move into the industry, although I think it's big enough for more than one company to thrive.
While the shares mightn't be cheap at today's price tag, I do believe Bellamy's Australia is a high-quality company which could still perform well for long-term investors.
