Shares of traditional Chinese medicine company Guangzhou Baiyunshan Pharmaceutical Holdings soared by as much as 13 percent in Hong Kong and 10 percent in Shanghai on Friday after Zhong Nanshan said that one of its products was found to be effective in fighting off coronavirus symptoms.
In Shanghai, Guangzhou Baiyunshan Pharmaceutical's share prices closed at 34.18 yuan per share on Friday from 31.08 yuan per share at Thursday's closing. The stock opened slightly higher at 34.98 yuan per share on Monday. The stock eventually closed lower at 33.06 yuan per share at the end of the trading day.
In Hong Kong, the company's stock prices jumped from HK$19.30 per share as of Thursday's closing to HK$21.65 after trading ended on Friday. The stock eventually corrected and dropped to HK$20.20 per share after trading ended on Monday.
Zhong, who is China's equivalent to the United States' Anthony Fauci, said last week that researchers have found that Banlangen granules were proven to be effective against the coronavirus in several in-vitro studies. The herbal medicine is typically used in China to treat cold and flu symptoms. The particular traditional medicine also saw widespread use in China to treat patients suffering from severe acute respiratory syndrome (Sars) in 2003.
Analysts said that the surge in Guangzhou Baiyunshan Pharmaceutical's stock was the result of investors latching onto the hype surrounding the particular herbal medicine. Share prices of other companies that distribute the particular medicine also climbed after Zhong's statement was made public.
Some experts have warned that Zhong's statements were pertaining to studies that were still at their early stages. There are currently still no research papers and preclinical data available for the efficacy of Banlangen granules.
Asset management firm Shanghai Leader Capital said in a post online that in-vitro studies are typically weaker when compared to clinical or human-trial data but investors likely speculated on the particular medicine's increased use following the Zhong's announcement.
"If a Nasdaq-listed company said their drug was found to inhibit the virus in in-vitro studies, the company would be despised by the market," Shanghai Leader Capital said in its post.
