Will Seegene recover its share prices with brisk Q1 performance?

Seegene released a report on its provisional performance for the first quarter on Wednesday, with its sales and profits jumping more than 300 percent from a year ago.

Investors pay keen attention to whether Seegene’s brisk performance in the first quarter will help to restore its share price that has fallen to half of the peak level marked in August last year.

Investors focus their attention on whether the brisk performance will help restore the company’s share prices, which have fallen to less than half of its peak in August last year, hit by the regulator’s discipline, and recently resumed short selling at the stock market.

Seegene said it recorded sales of 351.8 billion won ($283 million) in the first quarter, up 330 percent from a year ago. Its operating profit and net profit also soared 388 to 193.9 billion won and 164.2 billion won.

However, Seegene’s share price stood at 80,600 won as of 1:44 p.m. Wednesday, compared with the 156,100 won marked on Aug. 7 last year, capitalizing on the global sales of its Covid-19 test kits.

“We attained the operating profit rate of 55 percent in the first quarter, indicating this company showed robust performances despite sharp increases in investments and research and development spending,” the company said in a news release.

It also pointed to brisk export figures.

The company recently signed a 120 billion-won contract to export Covid-19 diagnostic kits with the Italian government and a 24.7 billion won deal with nine hospitals in Scotland in April. On Monday, Seegene also inked a 25-billion won export contract to support the “Back to School” project in Nordrhein-Westfalen, Germany.

“The demand for Covid-19 diagnostic kits is expected to rise as the virus continues to spread throughout the world with many countries promoting up mass-diagnosis using PCR tests to return to normal daily life,” Senior Managing Director Kim Myung-kun said.

The company expects to show a similarly solid performance in the second quarter, as it would take some time to see the effects of export contracts reflected on bottom lines, he added.

In March, the Financial Services Commission imposed a 2.5 billion won penalty on Seegene for reporting false business statements, overestimating its sales by selling an excessive number of products to its vendors and inflating them as sales between 2011 and 2019.

More recently, the company also became the target of short selling in the stock market, recording the largest number of 858,427 shares worth 72.7 billion won in short selling deals.