Shares of Synutra International Inc. rose 20 percent in Monday trading after China's Health Ministry this weekend cleared the company of any link between its milk powder and apparent breast growth in babies.
Parents had complained that three babies developed breasts after drinking the formula made by Synutra. But the nation's Health Ministry announced Sunday that they found no link between the powder and the company's formula.
Researchers "found nothing abnormal about the amount of hormones contained in milk powder from Synutra and other brands" after testing samples from 14 producers, the ministry said.
The scandal would have been a major stumble both for the company and the country, which has had several major product safety incidents.
Liang Zhang, CEO of Synutra, said the company is pleased with the test results and continues its "steadfast commitment to product quality and consumer safety."
Shares of the infant formula company rose $2.43 to $14.71 in midday trading.