BIOTECH firms and drugmakers listed on China’s two stock exchanges have warned of investment risk after their shares surged on feverish buying as a result of the Wuhan coronavirus, which has now infected more than 300 people. The outbreak has dampened sentiment on the broader market although it has driven some health-related companies to dizzying heights and economists have said it could eventually put more downward pressure on China’s economic growth. Jiangsu Bioperfectus Technologies urged investors yesterday to be rational and prudent after its shares surged more than 40 percent this week. The maker of in-vitro diagnostic products said in an exchange filing that its shares currently trade at roughly 100 times earnings, much higher than the sector average of 34.26. Beijing Hotgen Biotech, another in-vitro diagnostic instrument maker, said the epidemic will not have an impact on its revenues or profit this year, and also flagged investment risks. Investors have piled into biotech firms, drugmakers and facial mask producers this week, while dumping airlines, film producers and hotel operators, as the new coronavirus spreads. The outbreak, which began in the central Chinese city of Wuhan, has spread to Beijing, Shanghai and overseas. On Tuesday, China shares fell to two-week lows and the yuan had its worst day in five months on mounting worries about the new virus. Dozens of firms have publicly said this week that their products, ranging from diagnostic devices to flu drugs and facial masks, can be used to prevent or detect the new virus, leading to feverish buying in their stocks. (SD-Agencies) |