Little-known China Pharma Holdings (NYSEMKT:CPHI) is looking to shine on Wednesday, and investors are probably wondering why. As CPHI stock trends higher, here is what you need to know.
It is important to start with a look at what exactly China Pharma Holdings is all about. As its name implies, the tiny company is a pharmaceutical play within China. That identity — and its face mask business — is likely what has CPHI stock trending on Wednesday.
Although there has been no official company press release or U.S. Securities and Exchange Commission filing to confirm the upside move, here is what you should know:
- Starting with the basics, the company calls Haikou its home within China. The company has been in business since 1993.
- China Pharma Holdings has an expansive pharmaceutical and biotech business within China. Some of its products include injections to treat memory impairments, vitamin boosters and tablet treatments for common infections in the respiratory and urinary tracts.
- Importantly, China Pharma has a subsidiary it calls Hainan Helpson Medicine & Biotechniqe Company. Part of this business focuses on making face masks.
- Back in September, the Hainan Helpson subsidiary received several certifications for its masks. As a result, it now can register and distribute these masks in other countries.
- This press release is likely behind the trend higher in CPHI stock.
There is no denying that face masks are now a key part of our everyday life. However, you may wondering why a September announcement is still boosting this under-the-radar equity.
CPHI Stock and the Face Mask Economy
Importantly, one big catalyst investors should be watching is the rise of the second virus wave. As we watch nations resume lockdowns, we could see a similar boom in safety plays. Just think about how fast Alpha Pro Tech (NYSEMKT:APT) shot up in March!
China Pharma Holdings seems to recognize exactly what is at stake. At the time of the company announcement, it highlighted how China is relatively successful in its Covid-19 prevention plan. In fact, it suggested that this national success is further reason to trust its masks, which come in different varieties and protection levels. It has even made them accessible on Alibaba (NYSE:BABA) sister site 1688.com.
The face mask economy is not going anywhere. For innovative companies like China Pharma, this could provide a big boost. As with any tiny equity, risks are high. However, investors should do their due diligence and keep CPHI stock on their watchlists here.
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On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.