The A2 Milk Company Ltd (ASX: A2M) share price is up more than 3% after the business revealed positive China news.
A2 Milk is one of the world’s largest infant formula companies. It also produces liquid milk for the Australian and USA markets.
Chinese registration news
The infant formula company announced to the ASX that it has received approval from the State Administration for Market Regulation (SAMR) to transition the two China label infant milk formula (IMF) product registrations acquired in connection with the a2 Pokeno facility to a2 branded products.
The ASX share said this represents the last step of the terms for A2 Milk to acquire the a2 Pokeno facility for the required registrations to be utilised under the a2 brand.
With those regulatory approvals now obtained, the company said it no longer has the right to unwind the acquisition of the a2 Pokeno facility.
A2 Milk said it expects to launch new products later in 2026, with no change to the timing or estimated financial benefits provided to the market at the time of the acquisition.
Management comments
The A2 Milk CEO and Managing Director David Bartolussi said:
SAMR approval marks a significant milestone in our China growth strategy and Supply Chain transformation. It supports long-term growth in our core IMF business through market access and innovation, accelerates the development of advanced nutritional manufacturing capability, and captures attractive financial returns through incremental brand contribution and vertical margin capture.
A2 Milk special dividend
The company said that it expects the board of directors will soon convene with the intention to declare a $300 million special dividend that will be fully franked (and unimputed).
A2 Milk said that the timing of the payment and other details will be confirmed in a separate announcement once the special dividend has been declared by the board.
Final thoughts on the A2 Milk share price
The A2 Milk share price is still down around 25% this year, so it does look cheaper. But, it has rebounded 30% from 5 June 2026.
Overall, I’m not sure if the infant formula company is an attractive buy because of headwinds for the infant formula sector in China. But, the company has managed to grow market share over time.
