xi's moments

Firms with links to fentanyl rebound

By Liu Zhihua | China Daily | Updated: 2018-12-04 09:45

China and the United States agree to enhance cooperation on law enforcement and to combat illicit drugs, including the synthetic drug fentanyl. [Photo/IC]

Shares in major Chinese fentanyl-related listed companies rebounded on the close of trading on Monday, after a slide earlier in the morning on news that China and the United States had agreed to enhance cooperation on law enforcement and to combat illicit drugs, including the synthetic drug fentanyl, a medical substance that helps ease pain, but is addictive if abused.

Xinhua News Agency reported on Sunday on the two sides' decision to cooperate on illicit drug control, and that China has decided to list all fentanyl-like substances and their precursors as controlled substances, citing Chinese State Councilor and Foreign Minister Wang Yi.

About four A-share companies operate in the fentanyl business, and more than 10 have business in the related pain relief and anesthesia sector. The total market value of these companies amounts to about 526 billion yuan ($76 billion).

The stock price of Shanghai-listed Humanwell Healthcare Group Co Ltd, whose subsidiary Yichang Humanwell Pharmaceutical Co Ltd leads in fentanyl production and sales in China, slumped about 4.5 percent shortly after the market opened.

However, its stock price increased by around 1.8 percent at noon compared to the opening price, and finally closed with an increase of about 0.53 percent.

The company had released a statement on Sunday emphasizing that it has been strictly following laws and regulations to manufacture and distribute fentanyl, and that it has never exported any fentanyl substances to the US, including intermediates, raw materials and preparations.

The company said the subsidiary's sales of fentanyl-related products exceeded 2 billion yuan in 2017, including 5 million yuan from exports.

Shenzhen-listed Jiangsu Nhwa Pharmaceutical Co Ltd, which produces fentanyl-related medicines, experienced a 1.4 percent decline in stock price shortly after the market opened, with an increase of about 1.62 percent at close.

The company said in a Monday morning statement that it operates under Chinese laws and regulations, and has never exported fentanyl-related substances abroad.

Statistics from the company showed that its sales revenue of fentanyl-related products in 2017 reached 40 million yuan, accounting for only 1.18 percent of its overall revenue.

Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, commented that the rebound in major fentanyl-related stock prices was mostly influenced by the good overall performance of the stock market on Monday.

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