China is currently experiencing a peak period of confirmed novel coronavirus cases. This unexpected and unfortunate epidemic has already caused massive losses across multiple sectors, which translated to a considerable slump in China's stock market, which reopened on February 3.
Overall situation
By the end of February 3, China's A-rated share market was severely hit with the Shanghai composite index, Shenzhen component index, and Chinext index down 7.72%, 8.45%, and 6.85% respectively. More than 3000 enterprises experienced maximum losses, marking the most significant drop in the history of the A-share market. Unaffected companies were mostly pharmaceutical and medical-related ones.
Daily Chemicals Enterprises slump
Of the 15 listed companies on the A-share market, 14 have seen their share prices fall.
| Enterprises | Current Share Prices | Up/Down | Current Market Value(billion yuan) |
| Guangzhou Lonkey | 6.77 | 2.11% | 4.248 |
| Fujian Green Pine | 11.67 | -7.82% | 6.028 |
| Bloomage Biotech | 77.04 | -9.36% | 36.979 |
| One Chance | 179.1 | -10.00% | 14.328 |
| Yujiahui | 7.63 | -10.02% | 3.137 |
| Eternal Asia | 3.64 | -9.90% | 7.727 |
| Qingdao Kingking | 4.26 | -9.94% | 2.943 |
| Shanghai Jahwa | 25.61 | -9.98% | 17.191 |
| Marubi | 60.75 | -10.00% | 24.361 |
| Proya | 94.5 | -10.00% | 19.020 |
| Laf | 12.65 | -9.96% | 2.868 |
| Mingchen | 13.28 | -9.97% | 1.622 |
| Pien Tze Huang | 119.41 | -7.28% | 72.042 |
| Yunnan Baiyao | 78.96 | -8.82% | 100.864 |
| Liangmianzhen | 3.71 | -9.95% | 2.041 |
Source: CBO
Guangzhou Lonkey bucked the trend likely due to its strongly performing portfolio of disinfectant products. As the epidemic continues to disrupt regular business across the nation, household cleaning (disinfectant, air sterilizing spray, alcohol pads, etc.), personal care (liquid hand wash, hand sanitizer spray, etc.) and face masks and other clean care and medical care products have seen massive spikes in demand.
Long-term influence on daily chemicals enterprises
The novel coronavirus outbreak has exerted a particularly unfavorable effect on bricks and mortar businesses, with e-commerce enterprises fairing slightly better. However, at ChemLinked, we expect the overall growth of the daily chemicals and cosmetics sector will rebound and continue to grow once the situation is resolved.
Cosmetics and daily chemical products belong to the FMCG (fast-moving consumer goods) category. People will always need these products even when they stay at home under quarantine or lockdown. In fact, we see spikes in demand for specific types of personal care and cleaning products during the epidemic.
According to the Monthly Operation Monitoring Report of China's Cosmetics Industry in December 2019 released by iiMedia Research, social e-commerce platforms, which account for a large amount of online traffic, will become the primary sales channel for the cosmetics industry. Online retail channels are better equipped to buffer the impact of short term drop off in consumption, mostly down to decreased overheads.
Enterprise responses
Guangzhou Lonkey has arranged the resumption of production of protective, disinfection and sterilizing products.
Nox Bellcow, an OEM/ODM enterprise specialized in non-woven fabrics and cosmetics, has resumed work after it was admitted by the government as the enterprise producing essential materials for epidemic prevention and control.
In addition, considering the offline consumption is unable to recover in short time, many daily chemicals and cosmetics enterprises such as Huanya Group and Forest Cabin, etc. have plans to focus more on online channels like WeChat Mini Program, live-streaming, and WeChat Group to increase sales[1].
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