Medical-Device Maker’s Stock Climbs to Astronomic Heights in ChiNext Debut
What’s new: Shares of Hebei province medical-device maker Contec Medical Systems Co. Ltd. made a blistering trading debut Monday on the ChiNext board in Shenzhen before fluctuating wildly, at one point trading nearly 3,000% higher than their issue price of 10.16 yuan ($1.46).
The stock ultimately closed at 118 yuan on a roller-coaster day that saw it skyrocket as high as 308 yuan. It added to its gains on Tuesday to close at 138.99 yuan for the day.
The wild movement illustrates intense investor interest in medical stocks in the wake of the coronavirus pandemic, and also reflects new relaxed rules on the ChiNext board which have triggered speculation concerns.
The background: Contec was one of 18 companies to debut on the ChiNext Monday, the first tranche to go public since China’s securities regulator launched a registration-based system that included scrapping daily caps on stocks’ movements for their first five trading days.
Unlike the many money-losing medical firms that have listed recently, Contec’s wild market gains have at least some basis in concrete reality after it booked a net profit attributable to its parent of 364 million yuan in the first half of 2020, up 1,820% year on year.
Most of that was due to spiking demand for its infrared thermometers and pulse oximeters, the company said in its IPO prospectus.
Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full Caixin article in Chinese, click here.
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