By John Biju

Jan 22 (Reuters) - Shares of infant formula maker Bubs Australia BUB.AX surged on Wednesday after the company reported a return to profitability in the first half of fiscal 2025, driven by strong growth in its key markets, the United States and China.

Shares of the company rose as much as 22.5% to A$0.12 in early trade, marking what could be their strongest session since June 2023, and touched a six-week high. The broader benchmark index .AXJO was up 0.3%.

Bubs Australia posted earnings before interest, tax, depreciation, and amortization (EBITDA) of A$2.9 million ($1.82 million) for the six months ended Dec. 31, recovering from an EBITDA loss of A$6.8 million in the year-ago period.

The half-year earnings surpass company's target of EBITDA breakeven in fiscal 2025, Bubs said in a statement.

Sales in the United States were supported by new packaging for products introduced in the fourth quarter of fiscal 2024, which offered a lower price point to consumers.

The new packaging format, which has a higher margin than the old packaging, supported a strong group gross margin of 48% in the first half of the fiscal 2025, while a stronger dollar also offered further support, the company said.

Gross revenue from the United States for the second quarter rose 26% to A$17.2 million, while that from China soared 68% to A$7.1 million.

Growth in China was supported by further distribution of company's products in mother and baby stores. Bubs now has distribution in 20 provinces and 61 cities across China.

"The demand for quality organic infant baby food is now at the forefront in the market. Bubs Australia now has such a strong brand in key markets (China & US). I believe that their current successful results will continue in 2025," said Brad Smoling, managing director at Smoling Stockbroking.

($1 = 1.5949 Australian dollars)

(Reporting by John Biju in Bengaluru; Editing by Mohammed Safi Shamsi)

((John.Biju@thomsonreuters.com;))