In the new year's stock market, shares related to diagnostic kits are gaining attention as they rise. The news of a surge in respiratory illness patients in China has made domestic diagnostic kits and other medical device-related stocks beneficiaries.
However, every time news of the spread of respiratory diseases and other infectious diseases emerged, the related themes repeatedly experienced sharp fluctuations before returning to their original levels. Due to the high volatility of these themes, there is a need for caution when investing.
According to the Korea Exchange on the 3rd, Sugentech, a specialist in in vitro diagnostics, surged 20.5% on the first trading day of this month, which was the 2nd. The trading volume and transaction amount also increased significantly. On the previous trading day, December 30, 2024, the trading volume and transaction amount were merely 138,975 shares and 700 million won, respectively, but on the previous day, they skyrocketed to 5,192,809 shares and 34 billion won, representing increases of 37 times and 49 times, respectively.
Shares of diagnostic kit companies, including Mac-I-C-S (17%), Seegen (6%), and Lab Genomics (5.6%), also saw their prices increase. The trading volume and transaction amount grew by approximately 8 to 20 times in just one trading day. Individual investors sold these stocks in net sales at the end of last year, but showed a net buying trend the previous day. For Lab Genomics, individuals sold 400 million won worth of shares on the 30th of last month and then bought 4 billion won worth the previous day.
In particular, after the market closed the previous day, in after-hours trading, Mac-I-C-S recorded a 9.96% increase, the highest rate of increase combined from the KOSDAQ and KOSPI markets, while Seegen (9.50%) placed first in after-hours transaction volume (5.5 billion won). On that day, at 10:06 a.m., Mac-I-C-S and Sugentech also rose by more than 10%, indicating strong stock performance.
The surge in the stock prices of domestic corporations related to diagnostic kits and other medical devices is attributed to growing concerns about the spread of infectious diseases in China and the news that Chinese authorities are conducting monitoring on the infection. On the 27th of last month, the Chinese Global Times reported that the Chinese Centers for Disease Control and Prevention is implementing a pilot program for monitoring unexplained pneumonia and plans to conduct it nationwide. While there was no significant impact on stock prices at the end of last year, these issues have begun to gain attention as theme stocks in the new year.
The continuing strength of thematic stocks since the beginning of the year is thought to be due to the influx of speculative funds into related thematic stocks as the stock market remains sluggish. In the absence of clear leading stocks in the domestic stock market, the short-term interest in thematic stocks has stimulated investor sentiment. Han Ji-young, a researcher at Korea Investment & Securities, noted, "This year, greater volatility in the stock market is expected around the inauguration of U.S. President Trump at the end of January and the Federal Open Market Committee (FOMC); thus, individual stocks and thematic markets are likely to persist."
The problem is that, as all related theme stocks, such as diagnostic kits, are mid- to small-cap stocks, there is a high likelihood that stock prices could quickly return to their original levels after surging. Cellid, a vaccine development specialist, recorded daily upper limits for several consecutive days from the 9th to the 14th of August last year due to news of increasing domestic COVID-19 cases. At the time, its stock price soared from the 6,000 won range to the 14,000 won range. However, it fell back to the 6,000 won range after just 13 trading days. Other related stocks, such as Shinpoong Pharmaceutical and Qratise, showed similar trends.
Experts advise that investments in thematic stocks should be made after confirming specific performance. Research Institute Han Ji-young pointed out, "Thematic stocks lacking performance momentum may experience sharp declines again after a short-term surge in January, so caution is warranted."