Shares of Chinese frozen food firms jump as Covid derails Chinese New Year

[BEIJING] Frozen food is all the rage in China as home-cooked meals during the coming Lunar New Year holiday seems to be a safer bet than heading out to celebrate as Covid-19 cases increase.

Frozen seafood processor Zhanjiang Guolian Aquatic Products climbed by the 20 per cent limit in Shenzhen for a third-straight day Friday (Jan 14), while hot-pot ingredient and frozen meat suppliers Haixin Foods and Shandong Delisi Food each jumped 10 per cent for a third day.

Another maker of pre-prepared meals, Jinling Hotel, has surged 36 per cent this week. The group's performance is an outlier in an otherwise bearish market. The benchmark CSI 300 Index is set to close at its lowest level since November 2020, and all sub gauges except energy are in the red so far this year. This rare bright corner comes as China reported finding 143 new local Covid-19 cases across 5 provinces on Thursday, with local governments including Shanghai and Beijing advising against traveling outside the cities during the 7-day festival that starts on Jan 31.

Still, the appetite for the niche group of food firms hasn't been sufficient to lift sentiment for other consumer shares, like those making the liquor baijiu. The CSI consumer staples index is down 3.8 per cent this week, poised for its lowest close in 2 months, with Kweichow Moutai and Wuliangye Yibin each sliding by at least 3.5 per cent.

BLOOMBERG