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Baby formula maker Mead Johnson jumps on China child policy

October 29, 2015

NEW YORK (AP) — Shares of Mead Johnson, the company behind Enfamil and other baby formulas, jumped Thursday on news that China is relaxing its one-child policy.

China — an important market for Mead Johnson — said that it will start allowing all married couples to have two children, ending a decades-long policy that limited many urban families to only one child.

The move could boost births in the country by as much as 10 percent in the next year, according to an analysis by Citi Research. Adam Spielman, an analyst at Citi Research, reiterated his “Buy” investment rating on Mead Johnson’s stock, saying it could benefit from China’s policy change.

“We do not anticipate this policy adjustment will significantly impact births or birth rates in China, consistent with what we have seen in previous rounds of relaxation,” said Mead Johnson spokesman Chris Perille.

Although Mead Johnson doesn’t report sales from China separately, Asia is an important part of its business. More than half of the revenue the Glenview, Illinois-based earned between July and September came from Asia.

Shares of Mead Johnson Nutrition Co. rose $3.02, or 3.8 percent, to $82.79. The stock is down about 18 percent for the year to date.

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