(Yicai Global) Sept. 7 -- Chinese medical device maker Andon Health, flush with cash after the US government placed USD1.3 billion worth of orders for its Covid-19 test kits earlier this year, has quadrupled the scale of its original investment plan in wealth management products.

The previous financial management quota can no longer meet Andon’s existing capital management needs as revenue has soared since last year, the Tianjin-based company said yesterday. The firm will now invest CNY5.9 billion (USD846.1 million) in wealth management products, up from CNY1.4 billion.

Andon logged a 278-fold surge in net profit in the first half from the same period last year to CNY15.2 billion (USD2.1 billion), according to its latest earnings report released last week. Revenue skyrocketed 41 times to CNY23.3 billion after the Covid-19 test kits developed by its US unit iHealth Labs were given emergency use authorization by the US Food and Drug Administration in November last year.

However, earnings decreased significantly in the second quarter from the first quarter, with profit plunging 90 percent to CNY932 million (USD133.6 million).

Such revenue growth is unsustainable, Tianjin-based Andon said in its financial report. The pandemic poses uncertainties for future development and there is rising competition as more and more companies get the greenlight to sell their test kits in the US.

Apart from accepting orders from the US government and businesses, Andon sells its detection sets online through on e-commerce platform Amazon and the iHealth website.

Andon’s share price [SHE:002432] closed down 1.2 percent at CNY50.92 (USD7) today, giving it a market capitalization of CNY24.4 billion (USD3.5 billion). The stock has almost halved in value since mid-April.

Editor: Kim Taylor