Who is the beneficiary of endemic?
Indeed, the ‘endemic economy’ has begun. We have come at a time when COVID-19 is transitioning from a serious infectious disease to a manageable endemic disease like the flu. As the pattern of the pandemic has changed, the industry is changing as well. Travel, cosmetics, entertainment, etc. are stretching and the stock market is shaking.
▶ The sky road opens and expectations for the performance rise
Industries attracting attention as endemic include travel, aviation, and duty-free shops. As the sky road, which has been closed for a long time, opens in earnest. In March, the government decided to exempt self-quarantine for vaccinated persons arriving from abroad. The Ministry of Land, Infrastructure and Transport also announced that by the end of the year, international flights will recover to about 50% of the level in the fourth quarter of 2019.
The number of overseas travelers has also increased. According to the Korea Airports Corporation, the number of passengers at Incheon International Airport for one week from April 1 is 41,419. It more than tripled over the same period last year. Gmarket and Auction announced that overseas ticket sales increased by more than 800% for a month immediately after the announcement of exemption from self-isolation for overseas arrivals.
Korean Air and Jin Air, the major players in the aviation industry, are considered to be the first beneficiaries. It seems that expectations are already being reflected in the share price. Korean Air’s stock price rose from 27,000 won before the announcement of self-isolation exemption to 31,300 won on April 13. Asiana Airlines’ stock price rose from 17,000 to 18,000 won during the same period to 22,000 won.
The duty-free shop industry is also a beneficiary of the endemic. Hotel Shilla, Shinsegae, and Hyundai Department Store. Travel stocks were also classified as beneficiaries of the endemic, and share prices fluctuated. The share price of Hana Tour struggled between 60,000 and 70,000 won from the beginning of this year to the end of February, but it exceeded 80,000 won from the beginning of March. At one point in early April, it even crossed the 90,000 won mark.
Cosmetics should also be considered. Over the past two years, face-to-face activity has decreased and the demand for cosmetics itself has decreased due to the use of masks. To make matters worse, it is an industry that has struggled during the pandemic as entry and exit of Taigung, China, which was a major player in ‘K-beauty’, was blocked. However, cosmetics stocks are sluggish despite expectations for an endemic. Both Amorepacific and LG Household & Health Care, the major owners, are showing weakness. Amorepacific’s peak last year was 300,000 won, but the closing price on April 13 was 161,500 won. LG Household & Health Care also closed the market at 890,000 won on the same day, ‘halving’ of last year’s high of 1784,000 won. It was heavily influenced by bad news from China. Chinese authorities have recently expanded city lockdowns, both of which are largely due to their heavy reliance on Chinese duty-free and retail sales.
On the other hand, stocks related to cosmetic medical equipment are evaluated positively. Lutronic and Classis are examples. Lutronic develops and manufactures medical devices used in dermatology and plastic surgery, such as ‘Clarity’ and ‘Hollywood Spectra’. Classys is a company that makes ‘Shrink’, a facial lifting beauty device using high-intensity ultrasound. Lutronic’s overseas sales structure centered on North America and Europe is considered an investment point. Unlike China, they are mainly countries with no risk of quarantine regulations. It is evaluated that the launch of new products and expansion of overseas markets are expected to have a positive effect on Classys.
Let’s also pay attention to enter. Changes were predicted as domestic and overseas offline concerts such as BTS were held for the first time since the pandemic. New businesses in which entertainment companies such as NFTs are rushing into are also attracting attention. After all, the mastermind is a hive that embraces large-scale artists such as BTS and Seventeen. SM, YG, and JYP, which are preparing for major artist comebacks one after another, are also receiving expectations from investors. However, it should be noted that expectations are already reflected in the share price, and the share price volatility is high due to the nature of the industry.
[글 명순영 기자 사진 매경DB]
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