Cold-storage stocks are hot as Chinese traders chase a new round of winners in the coronavirus vaccine race
- A gauge tracking Chinese companies that make low-temperature storage and shipping equipment surged 9.8 per cent this week
- Investors expect increased demand for cold-storage logistics to transport vaccines globally for the coronavirus pandemic
With the progress made on developing multiple vaccines for Covid-19, punters are betting that demand for low-temperature shipping of the treatment for the global pandemic will spike in the future. This is the latest bet of local investors after they had earlier ramped up shares of makers of vaccines and masks and even mobile-gaming companies.
A gauge tracking mainland-traded companies that make such transport equipment surged 9.8 per cent this week, beating a 3.5 per cent gain on the Shanghai Composite Index. Among them, Zhejiang International Group, which makes medical instruments, surged by the 10 daily limit for a sixth straight day on Friday. Aucma, which also makes freezers and fridges, jumped by 10 per cent for three days in a row and Square Technology Group, added 7.4 per cent, taking its weekly gain to 29 per cent.
Some progress has been made on producing a vaccine for the coronavirus, which has infected more than 17 million people worldwide. Almost 10,000 people in the UK have received an experimental vaccine from AstraZeneca and the University of Oxford.
Shares of CanSino and Chongqing Zhifei have at least tripled this year in Hong Kong and Shenzhen.
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While chasing shares linked to low-temperature storage and shipping seems to be speculative and involves risk-taking, some companies have been forthcoming with information regarding their scope of business for investors through online communication platforms.
Aucma said the cold-storage business accounted for a pretty small proportion of the company’s revenue. Songz Automobile Air Condition and Fujian Snowman both said that their equipment can be used to store and ship pharmaceutical products.
The industry will probably undergo consolidation going forward, as the government is expected to strengthen regulation of the sector amid the pandemic outbreak, according to CSC Financial. The brokerage expects an annual growth rate of 4 per cent for the industry that will be worth US$207 million through 2025 in China.
