The Blackmores Limited (ASX: BKL) share price rose 4.3% to close at $185.60 on Monday, and shares have now risen more than 12% in the past month.
Today's rise appears to have been partly driven by comments from the Bellamy's Australia Ltd (ASX: BAL) CEO, Laura McBain, today, in regards to the impact on the company of a new Chinese tax for products sold on the grey market.
As Ms McBain noted, "It won't have an impact on the demand for Bellamy's products going forward."
What applies to Bellamy's could equally apply to Blackmores.
It seems almost hard to remember that the vitamins and supplements manufacturer's share price was around $54 a year ago, before a meteoric rise to $220.90 earlier this year.
That rise was driven by soaring demand for the company's products, particularly from China, and was reflected in the company's recent financial results. A 159% rise in net profit for one.
Blackmores does have official sales channels into China, but it seems that the company is also selling plenty of its product to entrepreneurs in Australia who are on selling the product into China.
High-quality Australian products, particularly infant formula and vitamins, are in huge demand from the rising Chinese middle class, and that hardly seems likely to drop off anytime soon.
Blackmores has also announced its entry into the infant formula market – capitalising on its existing brands to sell high quality formula to Chinese parents. Demand could continue to skyrocket too after China relaxed its one-child policy after 35 years late last year and couples can now have two children if they want.
A total relaxation of the rules, allowing couples to have as many children as they want could be the next step, and could certainly arrive much sooner than another 35 years.
Foolish takeaway
By no means are Blackmores shares cheap, trading on a trailing P/E ratio of over 42x. But if the company can continue to generate strong growth, that P/E will become meaningless, and a share price of above $200 beckons.