China Drugmaker’s 580% Surge Has Analysts Wanting More

(Bloomberg) -- Kintor Pharmaceutical Ltd., a Chinese drugmaker that develops cancer, acne and Covid-19 treatments, has more room to run after a more than 580% surge in its stock price this year, analysts predict.

Shares of the company, which had been up nearly 6% this week through Thursday, could add almost 30% over the next 12 months, according to analyst forecasts compiled by Bloomberg. Kintor is one of the biotech firms trying to develop an oral treatment for Covid cases that could have “huge commercial potential,” Jefferies analysts including Stephen Barker wrote in a note last week. 

On Friday, shares rallied by as much as 6.5%, putting it on track for the best weekly performance in a month. 

The Suzhou-based drug developer ranks the top performer in 2021 among the more than 150 health-care stocks traded in Hong Kong. On average, they returned about 20% this year. The firm will join the Hang Seng Composite Index effective Sept. 6. This will allow Kintor to qualify for Hong Kong exchange’s Stock Connect program, allowing inflows from mainland investors.

While joining the HSCI -- which accounts for about 95% of total market capitalization of all Hong Kong-listed companies -- will boost Kintor’s access to investors, shares of biotech firms are often seen as “high risk, high return,” said Dickie Wong, executive director of research at Kingston Securities (Hong Kong) Ltd.

“It’s more like speculating, especially when companies are under clinical trials,” Wong said. “If one patient has problems, it’ll move shares down or vice versa if it can enter the next stage. You never know, but that’s why investors love it since high returns can be offered.”

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