On Wednesday the A2 Milk Company Ltd (ASX: A2M) share price has continued its strong run and pushed notably higher for the sixth time in seven trading days.
This strong performance means that the fast-growing dairy company's shares have hit an all-time high of $8.40 during trade today.
Incredibly, this latest gain puts a2 Milk Company's 12-month return at a massive 311%.
Have you missed the boat?
Whilst I certainly wouldn't expect its shares to rally 311% over the next 12 months, I do think there could still be sizeable gains ahead for investors.
Especially with favourable regulation changes and the shifting consumer trend towards premium infant formulas in China.
As of January 1, China requires that all infant formula products are approved by the CFDA. Gaining CFDA accreditation is by no means easy and is very likely to have reduced competition in the market.
Bellamy's Australia Ltd (ASX: BAL), for example, is currently without CFDA accreditation and may not be granted it until close to the middle of 2018.
I believe this has put the company in a great position to increase its market share. Which at the last count was approximately 4.1% according to Kantar research.
A further boost to this could come from the growing preference for premium infant formula products by Chinese consumers and a recent salmonella scare in the industry. I think this scare may have pushed a lot of consumers into the hands of a2 Milk Company, which has a strong and trusted brand in China.
Elsewhere things are looking up in the United States. Management recently advised that after hitting its targets it has decided to expand into the north west of the country.
This increased footprint and overall improved performance in the country could make it a real driver of growth in the future, especially if the new products it plans to launch are a success.
Overall, I believe that a2 Milk Company has the potential to grow its earnings at a very strong rate over the coming years, which more than justifies buying its shares today even if they are trading at an all-time high.
