Why the Wattle Health Australia Ltd share price skyrocketed today

The Wattle Health Australia Ltd (ASX:WHA) share price has been one of the biggest movers this morning. Here's why…

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

One of the biggest movers on the market today has been the Wattle Health Australia Ltd (ASX: WHA) share price.

Although it has given back some of its early gains, the health and wellness food products company's shares are up 20% to 57 cents at lunch.

Why have its shares rocketed higher?

This morning the company announced that it has entered into a conditional agreement to acquire a 5% equity interest in Australian infant formula and nutritional products manufacturer Blend & Pack Pty.

Furthermore, major Wattle Health shareholder and Hong Kong-listed company Mason Financial Holdings has also committed to acquire a 75% equity interest in Blend & Pack.

The remaining 20% of equity will be retained by current shareholders of Blend & Pack.

Why is this important?

Blend & Pack is one of only eight manufacturing plants in Australia that currently holds CNCA accreditation. This allows it to nominate up to three brands to acquire China Inspection Quarantine.

As you might have guessed, one of these brands will be Wattle Health.

Blend & Pack has named Wattle Health as its first brand to be nominated for CIQ accreditation from January 1, 2018.

This means the company will have the accreditation required to sell its infant formula products into the Chinese market in stores and online from next year.

Should you invest?

This is undoubtedly another big step forward for the company and builds on its recent supply agreement with wholesaler and distributor Metcash Limited (ASX: MTS).

But it is still early days of course and faces stiff competition from the likes of a2 Milk Company Ltd (Australia) (ASX: A2M), Bellamy's Australia Ltd (ASX: BAL), and even Bubs Australia Ltd (ASX: BUB).

So for now I plan to hold off an investment, but I'll certainly be keeping a close eye on its progress and suggest fellow investors do the same.

Motley Fool contributor James Mickleboro 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.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »