Chinese medical equipment makers criticised by netizens for profiteering from Covid crisis

Chinese medical equipment makers and suppliers are enjoying one of their better weeks as demand for their products has surged amid a wave of coronavirus cases. At the same time, they also took some brickbats for profiteering from the health crisis.

Reports of hospitals being inundated by Covid-19 cases and the medical system coming under tremendous strain have helped fuel demand for devices. From oximeters to oxygen machines and test kits, many residents are stocking up to protect their families, just in case they cannot access hospital facilities.

Industry-related stocks have prospered because of this. China’s healthcare index gained almost 5 per cent throughout November and December, when China started to dismantle its zero-Covid curbs in early November and stop publishing daily infection cases in an effort to reopen the economy.

Some of the companies, however, were roundly criticised on mainland social media platforms such as Weibo and Xiaohongshu for raising their prices to capitalise on the health crisis. One posting took Jiangsu Yuyue to task for increasing the prices of its oximeters, which measure oxygen saturation in blood.

“The device is now priced at triple what I paid earlier in December, can’t believe the company is making money from a national crisis,” said a Xiaohongshu user in Guangdong, who posted screenshots of receipts from those purchases.

Similar posts about price surges and supply shortages involving Contec Medical Systems and Shenzhen-listed Lepu Medical Technology have also been rampant. On December 28, a Weibo user tagged Yuyue for cancelling her order for an oxygen machine, allegedly for hoarding. The company has apologised, claiming it was cancelled because a wrong product model was shipped out. It did not immediately reply to the Post about price hikes and supply situations.

Everbright Securities said a shortage of medical supplies still needs to be resolved as more people will get infected, and advised to “pay attention to those in high demand.” Topsperity Securities expects a “structural bull market” for medical supplies and drugs in 2023.

Contec, whose stock jumped 17 per cent in December, told investors it would go all out to expand its capacity by adjusting production lines and boosting recruitment to ensure timely delivery of orders. It currently produces 100,000 oximeters a day.

Lepu Medical, which produces cardiovascular and diagnosis devices, also pledged to adjust production plans to meet market demand for Covid-19 testing.