Why Did the TDL Share Price Jump 438% Yesterday? (ASX:TDL)

Melbourne-based biotech firm TBG Diagnostics Ltd [ASX:TDL] (formerly Progen Pharmaceuticals Ltd) saw a massive jump in its share price during trade yesterday.

The maker of molecular diagnostic kits jumped a whopping 438% or 11.5 cents, to finish trading at 14 cents per share.

Interestingly, there had been no movement in the TDL share price since 26 February this year, nor were any TDL stock traded during that time.

Can COVID-19 be good for business?

TDL makes molecular diagnostics kits in the US, Taiwan, and China. TDL manufactures its products in its certified facilities in Xiamen, China, serving the clinical labs of both hospitals and independent reference labs.

The company saw some particularly unusual price action on rather low volumes (136k) yesterday.

News about the company last broke when it released an announcement on 27 February that one of its subsidiaries had been selected by authorities in China’s Hunan province as a designated COVID-19 testing lab.

There has been no news since then other than the release of TDL’s preliminary final report on 28 February.

The diagnostic kits manufacturer often goes through some sessions without any trades at all on the ASX.

Even this morning there has been no clear development that appears to have been the catalyst for a high bid order yesterday.

Perhaps it is a case of what’s bad for business is good for TDL.

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With the company tacking on a further 57% in the opening hour of trade this morning, it could be a case of some crisis-minded investors looking for companies set to profit off the ongoing pandemic.

Interest in the firm has clearly been piqued since yesterday’s meteoric in share price. There has already been ~one million units traded in the first hour of trade this morning.

TDL’s profit up

The company has certainly found itself in fortuitous circumstances.

With the markets in panic mode and investors out to protect themselves from the storm, does TDL present itself as an attractive option?

Its latest results paint a compelling argument.

In the 12 months to 31 December 2019, the company made an operating profit of ~$620,000, a significant improvement on the previous year’s loss of ~$4.4 million.

There was a little growth in total revenue (6.1%), but the fact they are turning around their business could be a positive sign.

With the fear surrounding COVID-19, it will be interesting to see what revenues are derived from their testing lab.

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Regards,

Lachlann Tierney,
For Money Morning


Lachlann Tierney is a writer for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. Recently he has been working with Ryan Dinse. Ryan is involved in three publications:


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