(Yicai Global) Feb. 1 -- Shares in Andon Health surged as much as 8.5 percent today after the Chinese medical device maker, flush with cash after the US government ordered huge quantities of its Covid-19 test kits, said it is more than tripling its investment budget to CNY20 billion (USD3 billion) and will broaden the investment scope to get more bang for its buck.

Andon Health’s share price [SHE:002432] was trading up 6.8 percent at CNY53.86 (USD8) as of 1.30 p.m. China time today. Earlier in the day it hit CNY54.74.

Andon is increasing its financial management quota to a maximum of CNY20 billion from the previous CNY5.9 billion, announced in September last year, as revenue soars, the Tianjin-based company said yesterday. The firm will make rational and efficient use of its own funds and raise the rate of return on its investments by widening the scope to include not only fixed income products, but also wealth management products and securities.

Andon Health will carefully choose its investment targets and make investment decisions based on its own needs, the company said recently on an interactive investor platform. It will also develop its diabetes medical care business in China and the US.

Andon Health is predicting net profit to jump between 18 and 19 times in 2022 from the year before to between CNY16.5 billion (USD2.4 billion) and CNY17.5 billion, as orders from the US government alone topped USD1.8 billion that year, according to its latest earnings forecast.

Andon Health has seen its fortunes change since the US Food and Drug Administration authorized the emergency use of its Covid-19 detection sets in November 2021. This brought in USD1.6 billion worth of orders from the US government in January last year, driving its share price to a record high of CNY90.11 (USD12.60) in April. It since secured another USD190 million order from the US Defense Logistics Agency in November.

Although sales slowed in the fourth quarter last year, Andon Health is estimating net profit for the period to fall between CNY450 million (USD66.7 million) and CNY1.5 billion. It raked in CNY16.1 billion (USD2.3 billion) in net profit in the first three quarters.

Editor: Kim Taylor