Is Spring Gone?... Rapid Decline in Diagnostic Kit Stocks After Social Distancing Lifted

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] As social distancing measures have been fully lifted, diagnostic kit stocks are showing a weak trend.

According to the Korea Exchange on the 19th, SuzenTech closed at 12,000 KRW, down 1.64% from the previous day. This represents a sharp drop of 47.48% compared to early February, when the stock price reached its highest point this year due to the increase in COVID-19 cases. However, as of 10:10 AM on the same day, SuzenTech was trading at 12,250 KRW, up 2.08%. Seegene also closed at 41,350 KRW, down 0.6% from the previous day, marking a 34.37% decline over the same period. Humasis and Access Bio also plunged by 59.71% and 29.69%, respectively.

Recently, diagnostic kit stocks have been declining due to the end of social distancing and the downward trend in confirmed cases. From the day before, restrictions on private gathering sizes and business hours were completely lifted. Additionally, the number of confirmed cases, which exceeded 600,000 last month, dropped to 118,504 on this day. From the 25th, the COVID-19 infectious disease classification will be adjusted from Level 1 to Level 2, which also appears to be one of the factors driving the decline in diagnostic kit stocks.

Until early February, diagnostic kit stocks had been rising sharply as COVID-19 cases surged due to the Omicron variant wave. The revised COVID-19 diagnosis and testing system, effective from February 3rd, also propelled stock prices upward. The PCR tests, which were previously available to anyone, were limited to high-risk groups such as seniors aged 60 and over and close contacts. In other cases, a positive rapid antigen test result was required to qualify for a PCR test. This led to a shortage of diagnostic kits at that time.

However, experts explain that it is necessary to view diagnostic kit stocks from a long-term perspective. Oh Seung-taek, a researcher at Cape Investment & Securities, said, "The first-quarter performance of diagnostic kit stocks this year is favorable, and since there is still demand for diagnostic kits, the results are expected to be good through the second quarter, contrary to market concerns." He added, "In the future, a key trigger will be how diagnostic kit companies use the cash they have earned."

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