As China's economy slows, one industry is seeing record profits: COVID testing

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China's zero-COVID strategy of endless testing and lockdowns has hammered its economy and taken a toll on company profits, but it has delivered a windfall for test makers.

Twelve of China's top COVID testing firms have recently posted huge increases in both revenues and net profits for the first half of this year.

Assure Tech, a Hangzhou-based diagnostic firm, also posted a 1,324 per cent increase in net income because of strong demand in the global COVID testing market. Chinese companies have also suffered one of their worst earnings recessions on record. More than half of the 4,800 companies listed in Shanghai, Shenzhen, and Beijing posted a decline in net profit for the first half of the year — almost as bad as early 2020, when most companies posted their worst earnings season ever.

That figure may have significantly increased since then, as analysts from Soochow Securities recently estimated that 10.8 billion tests had been conducted in the three months from April to June.

 

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