(Yicai Global) Feb. 18 -- Junzheng Energy & Chemical Group will invest CNY1.1 billion (USD157 million) to become the second-largest shareholder of blood products company Daan Pharmaceutical.

Junzheng will pay cash for new shares issued by Daan that will account for 31.2 percent of the total after the deal is closed, the Inner Mongolia-based buyer said in a statement yesterday. That values Daan at CNY2.1 billion (USD300 million), up from CNY1.9 billion.

The capital markets are paying close attention to blood product makers and related companies because the plasma taken from patients who have recovered from the novel coronavirus has been found to be an effective treatment for sufferers. Plasma from such patients is very effective in treating severe cases, an official at the National Health Commission said yesterday.

Set up in 2004, Daan mainly researches, develops, produces and sells blood products. It had a net profit of CNY13.9 million on revenue of CNY94.7 million in the first three quarters of last year, the statement said. Junzheng's main business is significantly different from that of Hebei province-based Daan, leading to certain investment risks.

Daan's top shareholder, Beijing Bohui Innovation Biotechnology, currently has a 70.33 percent stake.

Shares of Junzheng [SHA:601216] closed a little over 1.7 percent higher today at CNY2.92 (42 US cents), giving it a market value of CNY24.6 billion (USD3.5 billion).

The plasma of patients recovering from the virus contains a large amount of antibodies, which have a preliminary therapeutic effect after being transfused into a sufferer, Zhang Dingyu, director of Wuhan Jinyintan Hospital at the center of the epidemic, said on Feb. 13.