Chinese artificial-bone makers surge in stock markets amid corpse-stealing scandal
- Chinese producers of synthetic bone substitutes, used in grafting procedures, benefit from a scandal that amplifies strong demand in the medical industry
Allgens Medical Science and Technology surged by the 20 per cent daily limit to 15.44 yuan in Shanghai on Friday, while peer Shandong Weigao Orthopaedic Device rallied as much as 15 per cent before closing for a 1.2 per cent gain at 21.13 yuan. Yantai Zhenghai Bio-tech jumped 16 per cent to 24.46 yuan in Shenzhen. The benchmark CSI 300 Index fell 0.3 per cent.
Police in China’s northwestern city of Taiyuan busted a syndicate linked to Shanxi Osteorad Biomaterial for stealing 4,000 corpses from mortuaries to make bone-grafting products. A social-media post on the scandal by a lawyer went viral on Thursday, prompting traders to scoop up the stocks.
“Some people are taking advantage of the scandal to buy on the news, a popular trading pattern this year given the weak fundamentals in the economy,” said Wang Chen, a partner at Xufunds Investment Management in Shanghai. “The logic is that demand for substitute products will increase.”
Since the end of Covid-19 pandemic, China’s stock markets have struggled to deliver excess returns like their peers in the US or Japan. The economy is blowing hot and cold as deflation at home undermines corporate earnings and exports weaken amid heightened trade and geopolitical tensions.
Bone grafting is a surgical procedure that uses transplanted bone to repair and rebuild diseased or damaged human bones. While bone tissues can be obtained from patients, the risk of complications means they are usually harvested from donors under strict regulatory oversight.
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Shanxi Osteorad allegedly induced workers at crematoriums in Chongqing, Sichuan, Yunnan and Guizhou to dissect bodies and ship parts as raw materials for making bone-grafting products, according to a document posted on one social media platform. Authorities have seized 18 tons of materials, it showed.