Shares in Bellamy’s have hit a two-year high after the infant formula maker upgraded its full-year profit forecast for a second time on the back of strong Chinese demand for its infant formula.

The company on Tuesday announced it expects earnings to rise 20 to 23 per cent, up from its previous target of a 17 to 20 per cent lift.

Bellamy’s also expects a revenue increase of 30 to 35 per cent, well ahead of previous guidance of 15 to 20 per cent growth.

Shares in the Tasmania-based baby food maker soared 24.8 per cent on the news to close at $13.68 – their highest level since January, 2016.

Morgans analyst Belinda Moore praised Bellamy’s profit upgrade as a sign of the brand’s strength and management’s success in turning the business around.

“To upgrade guidance for the second time this financial year is a terrific outcome, particularly when the 2018 financial year was expected to be a transition year and the second half’s trading will likely be impacted from China regulatory changes,” Ms Moore said in a research note.

Bellamy’s said it continues to expect its first-half revenue to be higher than its 2018 second half, due to higher winter consumption in China, the Chinese New Year and more Chinese label sales landing in the first half linked to the country’s new registration requirements.

Bellamy’s booked a $809,000 loss for full-year 2017 in a year marred by Chinese regulatory problems, an investor uprising against Bellamy’s board and the launch of two class actions by angry shareholders.

The company on Tuesday warned that its revised guidance was subject to liabilities, including class actions against the company.

The guidance also excludes the Camperdown powder blending and cannery business in Victoria which, as previously advised, is forecast to make an earnings before interest, taxes, depreciation, and amortisation loss of about $1 million-$2 million.

Bellamy’s, which owns 90 per cent of Camperdown, also said on Tuesday that it will buy the remaining 10 per cent from Buena Investments for $3.6 million.

The company had a rocky 2017 financial year, including steep share price falls related to several earnings guidance downgrades after sales in its key China market fell.

Driving the sales decline were new e-commerce regulations in China that Bellamy’s said led to an oversupply of Australian-labelled baby formula, causing widespread discounting which hurt its earnings in the second half of 2015/16 and first half of 2016/17.