(Yicai Global) Aug. 26 -- Shanghai Labway Clinical Laboratory and three other Chinese Covid-19 nucleic acid testing firms have reported at least a 50 percent surge in net profit in the first half from the same period last year as a string of recent Covid-19 outbreaks drives up demand for testing. But as income surges, so does monies owed.

Labway had the best performance with a a four-fold jump in net profit in the first six months from a year ago, while Pony Testing International Group logged a nearly three-and-a-half time leap, Guangdong Hybriobio Biotech two-and-a-half-fold and Guangzhou KingMed Diagnostics Group 55.1 percent, according to their latest financial reports. Only one out of the five Covid-19 testing firms to release their first-half earnings so far, BGI Genomics, did not do so well.

But despite soaring profit, Labway still has CNY2 billion (USD291.7 million) of unpaid accounts, nearly triple from a year ago.

Some of Labway’s clients have a long period of payment, the Shanghai-based company said. Most of its customers are medical institutions and Covid-19 prevention agencies that are unlikely to default on payment.

Testing labs’ gross margins and profitability are likely to be squeezed as the pandemic wanes due to better control measures and the release of new treatments, many of the firms said. Covid-19 testing will become routine and prices will drop.

Labway’s stock price [SHE:301060] dipped 0.2 percent today to close at CNY30.74 (USD4.50). The stock has lost 42 percent in value since mid-March. KingMed's share price [SHE:603882] closed up 0.7 percent at CNY66.62. The stock has tumbled 20 percent in the last six months.

Editor: Kim Taylor