(Yicai Global) Dec. 7 -- Shares of Yiling Pharmaceutical soared by the daily limit after the traditional Chinese medicine manufacturer said it will increase the production of a popular influenza drug repurposed to treat Covid-19 infections.

Yiling's stock price [SHE: 002603] closed 10 percent higher at CNY49.12 (USD7), more than two times up this year.

Factory-gate prices of Lianhua Qingwen are stable and the producer is adopting various measures to expand its output to guarantee supply, the Shijiazhuang-based firm said in a statement on the Shenzhen Stock Exchange’s investor communication platform yesterday.

Prices of the herbal medicine have surged more than five times the usual in some retail channels after pharmacies in several regions ran out of the product that is recommended by the government to treat mild symptoms amid easing Covid-19 restrictions. Granules of Lianhua Qingwen are out of stock on many e-commerce platforms such as JD.Com, Meituan, and AliHealth but users can still find the product in capsule form online.

Regulators have sought to control price gouging. The municipal market regulator of Hangzhou recently warned merchants of hoarding and boosting prices of Covid-19 drugs as punishments can go up to CNY5 million (USD716,051).

The wild demand has attracted opportunists as merchants have started selling fake Lianhua Qingwen drugs at elevated prices exceeding CNY100 (USD14) and registering trademarks with nearly similar names.

Yiling is also seeing opportunities as the firm may be expanding its product portfolio. The company has applied to register a series of trademarks akin to the hit brand such as Lianhua Qingfei with business scopes ranging from beer to instant noodles, according to corporate information platform Qichacha.

Editor: Emmi Laine, Xiao Yi