Welcron, Winix, and Other Mask and Air Purifier Companies Rise...Winter-Related Firms Highlighted
[Asia Economy Reporter Park Jihwan] As the autumn yellow dust season, when fine dust concentration in the atmosphere increases, has fully begun, interest in beneficiary stocks is rising. Fine dust-related stocks are broadly classified into mask, air purifier, and dust collector manufacturers.
According to the Korea Exchange as of 9:05 a.m. on the 2nd, Wellcron, the leading mask manufacturer, traded at 7,070 KRW, up 3.06% from the previous trading day. Ogong, a manufacturer of fine dust masks, rose 2.32%. KM and Monalisa also increased by 1.48% and 1.33%, respectively. Air purifier-related companies Winix (0.26%) and Coway (0.86%) also saw slight gains. Dust collector manufacturers KC Cottrell and Hats, which produce devices that collect and filter airborne dust, showed strong performance, rising 4.05% and 2.36%, respectively.
The rise in these fine dust-related stocks is attributed to the first yellow dust occurrence this fall on the 20th of last month, with fine dust concentrations fluctuating at 'bad' levels mainly in the metropolitan and Chungcheong areas. In particular, fine dust, which had been quiet since the beginning of the year due to the novel coronavirus disease (COVID-19), is showing signs of re-entering the country ahead of winter. At the end of last month, the concentration of ultrafine dust (PM2.5) in Seoul reached 38㎍/㎥, rising to a 'bad' level for the first time in 110 days since July.
There is also analysis that the reactivation of factories in China, the world's factory, has a significant impact. Although China experienced an unusual temporary shutdown earlier this year due to the spread of COVID-19, the acceleration of economic recovery and increased heating demand in winter in the second half of the year are expected to cause an increase in the inflow of air pollutants.
Most fine dust-related stocks are small and mid-cap stocks with a market capitalization below 200 billion KRW, so stock price volatility is high, but they commonly tend to rise between November and February, the winter season. From 2017 to last year, the average stock prices of companies related to masks, air purifiers, and dust collectors during the winter months of January and February rose by up to 60%, 25%, and 18%, respectively, compared to early November.
Kim Dami, a researcher at Shinhan Financial Investment, explained, "If the influence of fine dust expands in winter, companies related to home appliances such as air purifiers and clothing stylers, as well as mask and filter companies, may be highlighted again. In the past, fine dust-related stocks generally showed a favorable trend from November, when winter begins, to March, when fine dust peaks."
However, there are also voices urging caution in investing in fine dust-related stocks, which are classified as a kind of theme stock. In the case of mask manufacturing companies, stock price volatility has increased since the sharp rise in February and March this year due to the COVID-19 outbreak, so a cautious approach is necessary.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
