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Chinese coronavirus vaccines
BusinessChina Business

China’s vaccine makers get stock market jolt as rivalry, price cuts undermine earnings outlook

  • Competition among vaccine makers and state-driven price cuts are prodding analysts to trim their earnings forecasts
  • Stocks have languished since a bright 55 per cent rally during the first phase of national vaccination programme early last year

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A medical worker administers a dose of the COVID-19 vaccine to a boy at a vaccination site in Xuhui District of Shanghai on Sept. 3, 2021. Photo: Xinhua
Ann Cao

Chinese vaccine makers have gone flat in the stock market this year, a far cry from the euphoria that greeted them when their shots began to power national vaccination drive last year.

Since a 55 per cent stock breakout in the first half of 2021, China’s four key players – Sinopharm Group, Shanghai Fosun Pharmaceutical, CanSino Biologics and Chongqing Zhifei Biological Products – have limped. This year’s retreat has made investors 85.7 billion yuan (US$13.1 billion) poorer on paper.

The sell-off isn’t based on market emotions. At least 15 analysts have trimmed their earnings or price targets for the four over the past six months, according to Bloomberg data. Their best growth may be behind them as new Covid-19 variants and lockdowns open the door for new vaccines to rival two dominant providers in mainland China.

“Competition is getting more intense and prices are expected to decline,” said Kay Mai, an analyst at Guotai Junan Securities in Shanghai. “There are uncertain factors as to whether other new vaccines can catch up, but their market share is definitely increasing.”

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Original Wuhan ‘ground zero’ hospital workers aid Shanghai in battle against Covid-19

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China has approved five vaccines, with inactivated ones by Sinopharm and Sinovac dominating the options over the past year. As the Omicron requires more effective shots, CanSino’s viral vector vaccine and Zhifei’s recombinant protein vaccine have gained wider attention.

Fosun and BioNTech’s mRNA type of vaccine is seen as a potent rival, though its approval process has not progressed for months. Third-phase clinical trials from other producers are also in the mix.
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