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China Shenghuo Pharmaceutical Holdings, Inc. (AMEX: KUN) is baffling industry watchers with its shares gaining more than 30% on an astonishing fifteen times average trading volume despite no news from the company.

SmallCapInvestor.com is reporting that message boards for the company are buzzing with speculation that the deadly earthquake in China will spur demand for medical products in the country – which may be true, but what isn’t clear is how China Shenghuo Pharmaceutical would possibly benefit from this increased demand.

A brief review of the company’s business description reveals that it has three divisions: pharmaceutical products; health and food products; and cosmetics. China Shenghuo Pharmaceutical’s flagship drug is designed to “invigorate circulation of the blood” for those with cardiovascular and cerebrovascular disease – not the kind of thing usually resulting from the trauma of an earthquake. Other products are used for insomnia, colds and ulcers.

The other two divisions don’t even warrant serious consideration as health foods and cosmetics probably aren’t a priority after an earthquake that may have claimed more than 60,000 lives.

If China Shenghuo Pharmaceuticals is benefiting from speculation about increased medical supply needs in the wake of the disaster in China, it is benefiting from investors that don’t have the slightest idea about what the company actually produces.

As of publication, China Shenghuo Pharmaceutical Holdings, Inc. is up 31.91% to $4.96.

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