Covid-19 test kit makers’ stocks on roller-coaster in August

Shares of Covid-19 diagnostic kit manufacturers rose and fell wildly in August as the nation suffered a resurgence of the viral infections in greater Seoul.

Their stock prices were particularly sensitive to three news items — the manufacturers’ winning local approval for exports, obtaining the FDA’s nod, and the clinical trials’ results on local test kits.

Sugentech is one of the test kit makers that drew attention from investors in the biotech industry last month. The company’s stock price recorded about 20-29 percent rise and fall every two weeks since late July.

On July 30 and 31, Sugentech shares jumped 29.89 percent (by 9,400 won ($7.91)), and 27.29 percent (by 11,150 won). On Aug. 11 and 12, however, the price plummeted 23.54 percent (by 12,100 won) and 13.74 percent (by 5,400 won).

The stock price then resurged 22.61 percent (by 7,100 won) on Aug. 18 on the news that the company earned the regulatory nod to export its Covid-19 antibody test kit.

After winning the FDA’s approval for its Covid-19 antibody test kit for emergency use on Monday, Sugentech’s shares shot up 29.83 percent (by 12,500 won) to close the day’s trading at 54,400 won. However, the price plunged 13.79 percent (by 7,500 won) and 10.23 percent (by 4,800 won) on Tuesday and Wednesday.

Access Bio is another Korean biotech firm that benefited from the Covid-19 outbreak. Sugentech and Access Bio are the only two listed Korean companies that have obtained the FDA’s emergency use approval for test kits.

After the FDA granted Access Bio’s Covid-19 rapid diagnostic kit for emergency use on July 27, its stock price skyrocketed to 13,250 won on Aug. 6 from 3,875 won on July 24.

The Korea Exchange (KRX), the Seoul bourse operator, once designated the company as an investment risk item and temporarily suspended its stock trading.

On Aug. 21 and 24, shares of Access Bio nosedived 29.95 percent (by 14,900 won) and 16.36 percent (by 5,700 won), and closed at 30,200 won on Aug. 25.

The KRX lifted the stock trading suspension on Monday but warned investors that they had to take caution when investing in Access Bio.

Seegene, another test kit maker, did not achieve as much stock growth in August as it did in July. The company’s shares had spiked 115 percent in July.

The earnings report in August must have failed to meet the market’s expectation, observers said.

According to Seegene, the company recorded 24.2 billion won sales and 20.2 billion won operating profit in the second quarter. The company successfully turned to black from red, and the revenue expanded more than 20 folds, compared to the same period last year. However, the operating profit fell short of the market’s expectation of 100 billion won, leading to a plunge in the stock price, analysts said.

Some observers said the massive sell-off of the owner family’s holdings could have pulled the stock price down.

Just a day before the company released the half-year business report on Aug. 12, Chun Mi-young, a relative of CEO Chun Jong-yoon, sold 14,100 shares and made about a 4.3 billion won profit. As a result, the stakes owned by CEO Chun and his 22 relatives went down from 32.47 percent to 31.96 percent.

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