(Yicai Global) Feb. 10 -- Shares in Andon Health soared by the exchange-imposed limit today after the Chinese medical device maker said that its US subsidiary has received a payment of USD108 million from the US army for delivery of the first batch of Covid-19 test kits in a deal worth USD1.8 billion.

Andon Health’s share price [SHE:002432] was trading up 7.79 percent at CNY66.40 (USD10) as of 1:30 p.m. China time. Earlier in the day it had hit CNY67.76. The stock has gained 10-fold since early November last year when the US Food and Drug Administration approved Andon’s home-use Covid-19 detection kit for emergency use.

The US army’s procurement agency the US Army Contracting Command made a payment of USD108 million for 21.6 million SARS-CoV-2 test kits on Feb. 7, the Tianjin-based parent firm said today. As of Feb. 8, its unit iHealthLabs, in which Andon holds a 70 percent stake, has delivered 105 million detection sets out of the 354 million ordered. Delivery is expected to be completed by March 14.

A joint study by the FDA and the US National Institutes of Health has shown that Andon’s Covid-19 test has a 100 percent detection rate of the Omicron variant, Andon said on Jan. 6.

The hot-selling product represents a great change in fortune for Andon. The company had reported an 86 percent drop in profit in the first three quarters of last year from the same period the year before to CNY50.1 million (USD7.9 million) and a 50 percent slump in revenue to CNY790 million (USD124 million). But its earnings in the fourth quarter equated to five times the firm’s entire earnings in the 14 years from 2007 to 2020.

It is now expecting profit to as much as quintuple in 2021 from the year before to CNY1.2 billion (USD190 million), the firm said in its earnings forecast on Jan. 19.

Editor: Kim Taylor