Blackmores shares surged to a record $200 on news the vitamin maker wants to build on its popularity in China by pushing into the lucrative infant formula market.
Announcing a partnership with dairy giant Bega Cheese on Thursday, the duo will release a range of nutritional foods, including infant formula, in early 2016.
Shares in both companies shot up, with Blackmores rising as high as $200.04 before settling at $176.21 - 13 per cent above Wednesday's close.
Brokers said Blackmores is the only Australian listed company in recent memory to have passed the $200 mark. The stock was price at around $32 just a year ago.
"It was certainly unthinkable six to 12 months ago (that Blackmores would hit $200)," optionsXpress market analyst Ben Le Brun told AAP.
"If they can get this product right, who knows where this share price can end up in the future."
Investors also flocked to Bega, with its shares up 74 cents to $5.70.
Things weren't so great for rival formula maker Bellamy's, which lost 58 cents to $7.95.
Mr Le Brun said the Blackmores and Bega venture involved some risk, because without a quality product at a comparable price, it could spell disaster for their brands.
Chinese dairy imports have exploded in recent years as its population looks for safer, higher quality food products.
The 2008 melamine milk scandal, where more than 300,000 children fell sick and at least six died after consuming infant formula containing the industrial chemical, saw demand for imported organic products skyrocket.
"We are aware from our presence in the Asia region that there is significant demand for infant formula and we believe, with the combination of Blackmores and Bega, we're uniquely positioned to support those women unable to breastfeed," Blackmores chief executive Christine Holgate said.
Half of Blackmores' total first quarter sales were to Asia, with direct sales through its China business increasing 10 fold.
That helped Blackmores double its net profit to $22.6 million.
Sales through Australian retailers rose by three quarters to $115.4 million, fuelled by demand from Chinese tourists and entrepreneurs.
According to Sydney University, China was Australia's second largest market for pharmaceuticals in 2013/14 when it imported $381 million worth of vitamins and health products.
Ms Holgate said demand for Blackmores' products in China was putting pressure on the company's ability to serve Australian customers.
"The scarcity of raw materials that meet Blackmores unrivalled quality standards is resulting in increased costs of many key ingredients and restricting our ability to meet demand," she said.
