SHANGHAI (Reuters) – Investors snapped up shares of Chinese drugmakers, mask producers, antigen test companies and funeral service providers on Monday, amid fears of soaring mass infections following China’s pivot away from strict zero-COVID policies last week.
Medical supplies producers are being bombarded with questions from investors about their capacity, after authorities on Wednesday announced a dramatic loosening in COVID-19 testing, quarantine and management rules in the aftermath of anti-lockdown protests.
China’s healthcare index gained almost 1% on Monday morning, despite a 0.8% drop in the benchmark CSI300 Index.
More than a score of drug-making stocks surged, after China’s National Administration of Traditional Chinese Medicine published a long list of recommended medicine, including cough and flu drugs, that people could use to cope with infections at home.
Shijiazhuang Yiling Pharmaceutical Co Ltd, seller of a highly popular medicine for colds, traded near record highs, having jumped 70% since the end of October. Jinghua Pharmaceutical Group surged the maximum 10%.
Investors are also piling into mask makers, such as Shandong Dawn Polymer, and antigen testing firms, such as Wuhan Easy Diagnosis Biomedicine, amid reports of rapidly rising infections in major cities, including Beijing and Chengdu.
Hu Qiang, fund manager at Yunchuang Investment, said demand for antigen testing had just taken off.
“People will realize the importance of antigen testing when they see the big wave of infections coming,” said Hu, who has invested in Guangzhou Wondfo Biotech Co and Suzhou Novoprotein Scientific Co.
Expectations are rising that a massive COVID outbreak around the Chinese New Year in late January could increase critical cases and deaths in a country where many old people are not yet vaccinated, leaving the medical system overwhelmed.
Hong Kong-listed Fu Shou Yuan International Group, China’s biggest operator of cemeteries and provider of funeral services, rose as much as 7% on Monday to a fresh one-year high.
Listed medical firms are also busy fielding investors’ queries about how they are preparing for a potential worsening COVID situation. “Novel coronavirus” was among the most popular terms in questions directed to companies on investor-relations platform.
Lepu Medical Technology, which produces cardiovascular and diagnosis devices, told investors it would adjust production plans to meet market demand for COVID testing.
Easy Diagnosis said on an investor relations platform that it was able to ramp up production quickly, as cancellation of nucleic acid testing in many places would boost demand for antigen testing at home.
(Reporting by Shanghai Newsroom; Editing by Bradley Perrett)
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