Healthcare ETFs Also 'Weak' Amid Concerns Over Bio Stocks' Earnings

Bio Stocks Weakness Leads to 7 Out of 10 Lowest Performing Stocks in Returns

[Asia Economy Reporter Song Hwajeong] As biotech stocks continue to weaken, healthcare exchange-traded funds (ETFs) are also showing sluggish performance. Concerns over poor third-quarter earnings are suppressing biotech stock prices.

According to the Korea Exchange on the 18th, since the beginning of this month, TIGER KRX Bio K-New Deal has fallen 9.68%, marking the second-largest decline among all ETFs. KODEX Healthcare (-8.20%), TIGER Healthcare (-8.09%), ARIRANG KRX300 Healthcare (-7.63%), KBSTAR Healthcare (-7.05%), TIGER KOSDAQ150 Biotech (-7.02%), and KODEX Bio (-6.75%) also dropped significantly. Among the 10 worst-performing ETFs, seven were healthcare ETFs.

This poor performance of ETFs is due to the weakness in biotech stocks. Large-cap biotech stocks have recently shown a sluggish trend. Celltrion fell 20.15% over the past month, dropping its market capitalization ranking to 10th place. Celltrion Healthcare declined 23.87%, with its stock price falling from the 110,000 KRW range to the 80,000 KRW range. Celltrion Pharm also dropped 19.34%. Samsung Biologics fell 6.86% during the same period, while Seegene and Alteogen declined 18.27% and 4.75%, respectively. The weakening momentum in vaccine and treatment development due to the development of oral COVID-19 treatments, combined with concerns over poor third-quarter earnings, had a significant impact.

Shinhan Investment Corp. forecasted that Celltrion's third-quarter earnings would fall short of market consensus by 23% in sales and 32% in operating profit, and Celltrion Healthcare's operating profit is expected to be about 19% below consensus. Diagnostic kit companies, which had recorded high growth after COVID-19, are also expected to see sales and operating profit decrease by 16.9% and 23.2%, respectively, compared to the previous quarter. Researcher Lee Donggeon of Shinhan Investment said, "With the emergence of oral treatments, the momentum for domestic COVID-19 treatments and vaccine development has weakened, and the earnings momentum for pharmaceutical and biotech companies in the third quarter will also be limited. Among large-cap biotech stocks, Celltrion Group's earnings decline is expected to continue, and the earnings momentum of aesthetic companies will also be limited."

This content was produced with the assistance of AI translation services.