Domestic stocks related to COVID-19 are experiencing a surge as the detection rate and hospitalizations rise, following reports of hundreds of thousands of new cases in China over the past month. Shinpoong Pharmaceutical saw its shares jump more than 20% in early trading due to its history of developing COVID-19 treatments.
As of 9:30 a.m. on the Korea Exchange, Shinpoong Pharmaceutical's stock was trading at 9,820 won, up 1,700 won (20.94%) from the previous trading day. The trading volume exceeded 1 million shares, significantly surpassing the previous day's total of 64,496 shares. Shinpoong Pharmaceutical's preferred shares also hit the upper limit of the price increase.
The recent signs of a COVID-19 resurgence in China are believed to have spurred investor sentiment in related stocks. In July, China reported 522,000 new COVID-19 cases. The positivity rate for patients visiting hospitals with respiratory symptoms has also risen for five consecutive weeks, reaching 21.2%.
The situation in South Korea is also concerning. According to surveillance data from the Korea Disease Control and Prevention Agency, the COVID-19 detection rate in the country rose to 9.1% from 3.2% three weeks prior, marking an increase of approximately 2.8 times during the week of August 9-15.
Shinpoong Pharmaceutical has been associated with COVID-19 stocks due to its development of a treatment using the malaria drug Piramex. The expectation of increased demand for treatments amid the resurgence of COVID-19 has led to a surge in buying interest for Shinpoong Pharmaceutical.
However, looking at the company's performance alone, the sharp rise in stock price is difficult to justify. In the second quarter, Shinpoong Pharmaceutical reported sales of 63.9 billion won, a 9% increase from the same period last year, but it also recorded an operating loss of 8 billion won, marking a return to deficit.
* This article has been translated by AI.
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