Shares in the A2 Milk Company have risen more than 8 per cent after the it moved to reassure investors about its burgeoning China business, following recent downbeat commentary from its key rivals.

In a market update to the ASX following a presentation at a UBS conference this morning, A2 said its first-quarter revenue was in line with expectations at $NZ112.5 million, up 40 per cent on a year ago.

Importantly it said Chinese demand was growing as consumers became more aware of its flagship A2 Platinum infant formula and A2 Milk brands and that it was progressing towards registering its infant formula product in China.

A2 shares closed 8.8 per cent stronger at $2.04, against a flat benchmark index.

Two weeks ago broker Citi put sell recommendations on A2 and its rival Bellamy’s Australia after claiming both could be facing a sales “hole’’ in China over the next year, due to higher than expected inventory levels, competition and regulatory risks covering the sale of formula and milk powders. Shares of both companies were subsequently hit.

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