Covid Test and Vaccine Stocks Surge Across Asia Amid Rising Cases

Asia: Shares of Covid-19 test kit and vaccine manufacturers rallied across Asian markets on Monday as a fresh wave of infections triggered renewed demand for diagnostics and vaccinations.

In South Korea, Sugentech Inc., a diagnostic kit maker, surged by as much as 29%, making it one of the day’s top performers. Other test-kit manufacturers, including Humasis Co., LabGenomics Co., Seegene Inc., and SD Biosensor Inc., also recorded significant gains. Shares of SK Bioscience Co., a Covid vaccine producer, climbed 7.2%.

In Japan, pharmaceutical giant Daiichi Sankyo Co. saw its stock rise up to 7.4%, buoyed by an upward revision of its price target by UBS.

Meanwhile, in Hong Kong, shares of Shanghai Junshi Biosciences Co., which manufactures Covid vaccines, rose by 4.3% amid concerns over rising infections in the region.

Covid Wave Builds Across Asia

Health authorities in Hong Kong and Singapore have issued warnings about a resurgence of Covid-19, with cases rising steadily. In China, the current wave is expected to match last summer’s peak, according to the Chinese Center for Disease Control and Prevention.

“After the return to normalcy, Hong Kong has experienced Covid-19 spikes every six to nine months,” said Edwin Tsui, head of Hong Kong’s Centre for Health Protection. “We anticipate activity levels to remain elevated in the coming weeks.”

In response to the rise in infections, the Korea Disease Control and Prevention Agency (KDCA) has extended its seasonal vaccination campaign by two months, advising vulnerable populations—including seniors over 65 and immunocompromised individuals—to receive the JN.1 vaccine from Pfizer Inc. and BioNTech SE.

“Covid-19 has shown year-round activity in recent years,” KDCA stated. “Early vaccination is essential to ensure adequate immunity.”

Retail Investor Momentum

Analysts note that retail investors are playing a key role in driving the recent rally in small-cap pharma stocks in Korea.

“Retail-driven flows remain dominant in Korea’s pharmaceutical small-cap sector,” said Gary Tan, portfolio manager at Allspring Global Investments, Singapore. “Investors are positioning opportunistically in select names within the healthcare space amid rising Covid concerns.”