Hong Kong, Sep 7 : China’s zero-Covid policy of constant tests and lockdowns have hurt its economy and slashed the profits of companies, however it’s brought a hefty profit to test makers, a news report stated.Twelve of China’s most prestigious Covid testing companies recently reported huge growth in both revenue and net profits in the first quarter of this year, CNN reported.
Andon Health, which supplies Covid test kits in the US and abroad, announced that its net profits soared by 27,728 percent in the first half of 2022, averaging 15.24 billion dollars ($2.2 billion).It was the largest increase reported by any listed business in the mainland of China, CNN reported.
In the meantime, its revenues soared 3,989 percent.
The company is not just benefiting from China’s ferocious testing program in the country as well as the huge demand in the United States, as its iHealth Lab had recently won US government contracts to supply quick antigen testing kits.
Assure Tech, a Hangzhou-based diagnostic company, also reported an increase of 1,324 percent in net earnings due to of an influx of customers in the world Covid testing market.
Other testing companies reported net profit growth of 55% to 376 per cent during the first six months of the year.
Incessant Covid testing, back-and forth government-imposed lockdowns as well as border controls have caused destruction for China’s economy.The country’s GDP only grew by 0.4 percent in the second quarter of 2018, which was the slowest rate in over two years, CNN reported.
The major investment banks have cut their growth forecasts for the full year for China to 3 percent or less, a significant drop than the 5.5 percent official goal set by the Chinese government earlier in the year.
Chinese companies also have suffered one of their most severe recessions in earnings in recent memory.
Nearly half of the 4,800 companies listed in Shanghai, Shenzhen and Beijing have reported a drop in net profits in the first quarter of the year.It was almost as bad as the beginning of 2020, when the majority of companies had their lowest earnings ever, CNN reported.
However, diagnostic companies are among of the biggest cash-makers during the pandemic.They profit from the massive demand for tests as Beijing continues with its zero-Covid rule, which includes forced quarantines, massive obligatory testing as well as snap lockdowns.
Since the beginning of the pandemic until April 20, 2022 11.5 billion tests have been carried out in China according to the Chinese government, CNN reported.
.
