The Wattle Health Australia Ltd (ASX: WHA) share price has continued its impressive run with another strong gain on Monday.
In early trade the fledgling infant formula company's shares are up almost 8% to $2.48.
Why are its shares higher?
This morning Wattle Health provided the market with an update on its China Food and Drug Administration (CFDA) accreditation application ahead of its annual general meeting.
The CFDA approval is necessary to sell infant formula in the lucrative Chinese market from January 1 2018 onwards when new regulations come into place.
At present a2 Milk Company Ltd (Australia) (ASX: A2M) is the only listed Australian company that has been granted CFDA accreditation.
But Wattle Health could soon follow according to today's update. Management has revealed that the company has received confirmation from the CFDA that its application has been officially accepted and is currently undergoing final review.
Should you invest?
As with fellow up and coming infant formula company Bubs Australia Ltd (ASX: BUB), I think Wattle Health could have an incredibly bright future if it can win a share of the Chinese infant formula market.
But it is worth remembering how competitive the market is and that having CFDA accreditation doesn't necessarily guarantee sales.
In light of this, I intend to watch on from the sidelines and wait for sales data that backs up its valuation.
