Rising Trend in Cosmetics Stocks Including LG Household & Health Care
Duty-Free Casino Stocks Also Up 4-5%
Possibility of Zero-COVID Policy Lift in March
Related Stocks Expected to Continue Rising for a While
[Asia Economy Reporter Kwon Jae-hee] As China, which had adhered to the 'Zero COVID' policy, accelerates the easing of quarantine measures, expectations for reopening (resumption of economic activities) are growing. Experts predict that China will enter the 'With COVID' phase as early as the National People's Congress in March next year. Accordingly, reopening-related stocks are expected to show strength for the time being.
According to the Korea Exchange on the 6th, as of 9:21 a.m., Amorepacific was trading at 137,500 KRW, down 1.43% from the previous trading day. The previous day, it closed at 139,500 KRW, up 6.08%, marking the highest price in the past three months. LG Household & Health Care has also steadily risen since hitting a low of 499,500 KRW on October 28, closing up 7.46% the previous day. At the same time, it recorded 701,000 KRW, down 1.96%. Duty-free and casino-related stocks such as Paradise and Hotel Shilla also showed strong gains of 4-5% the previous day.
As blank protests, which began as collective resistance to the high-intensity quarantine regulations, spread, Chinese authorities are hastening to ease quarantine measures. This is because the authorities have recently failed to curb the rapid increase in confirmed cases despite the strong Zero COVID policy. Additionally, the prolonged Zero COVID policy has negatively impacted the Chinese economy, which is cited as a reason for the Chinese government’s shift toward easing quarantine policies. In fact, China’s retail sales in October turned negative compared to the previous month, highlighting the domestic demand slump.
Lee Jae-sun, a researcher at Hyundai Motor Securities, said, "Due to the domestic demand slump caused by China’s high-intensity quarantine policy, it is becoming increasingly difficult to defend growth," and analyzed, "Discussions on easing China’s quarantine measures will act as a positive factor for Korean companies, for which China accounts for 7.5% of overseas demand."
The securities industry expects reopening-related stocks in China to remain strong for the time being. In particular, it is highly likely that the Chinese government will abolish the 'Zero COVID' policy around March next year when the National People's Congress is held. It is expected that the easing of regulations will come in the order of PCR test regulation relaxation, regional lockdown easing, and relaxation of entry and movement restrictions.
Jeon Jong-gyu, a researcher at Samsung Securities, said, "It is clear that China’s quarantine policy has shifted to a 'gradual reopening,'" and analyzed, "The Lunar New Year in January and the National People's Congress in March next year will be important turning points."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
