Waste Management Stocks Surge Amid Soaring COVID-19 Cases

Medical Waste Disposal Increases 11.32 Times

[Asia Economy Reporter Park Jihwan] Waste disposal companies are gaining attention amid the spread of the novel coronavirus infection (COVID-19). This is because the amount of medical waste disposal is also rapidly increasing as the number of COVID-19 confirmed cases explodes.

According to the Ministry of Environment on the 2nd, a total of 86,355 kg of COVID-19 related medical waste has been processed from January 23, when the first confirmed patient was hospitalized and began generating waste, until the 26th of last month. This includes 28,101 kg of isolation medical waste from confirmed patients in hospitals, 2,484 kg of isolation medical waste generated from those who converted to confirmed cases during self-quarantine, and 55,770 kg of medical waste from temporary living facilities for Wuhan evacuees. Considering that the Ministry of Environment processed 7,630 kg of medical waste from January 23 to February 4, the processing volume has increased 11.32 times in just three weeks.

The rapid increase in medical waste is closely related to the recent surge in COVID-19 confirmed cases. As of 4 p.m. on the 1st of this month, the total number of COVID-19 confirmed cases was 3,736, with hundreds of new cases increasing daily. It is reported that one confirmed patient generates about 10 kg of medical waste per day.

The securities industry expects the demand for medical waste disposal to surge at least until the first half of the year. Currently, there are no publicly listed companies in Korea specializing solely in medical waste, but related stocks such as KG ETS, which operates designated waste incineration businesses, are expected to benefit.

These companies are importing and incinerating medical waste that can be generally incinerated. While the total amount of waste that can be processed by each incineration facility is fixed, the proportion of COVID-19 related medical waste is increasing. According to the companies, processing high-priced waste such as medical waste increases profitability when processing the same volume.

Besides the COVID-19 issue, the waste market size is growing 15-20% annually, and disposal fees are trending upward, which is also positive. According to IBK Investment & Securities, the disposal fee per ton of waste has increased every year: 171,804 KRW in 2017, 203,494 KRW in 2018, and 240,000 KRW last year.

Seo Hyewon, a researcher at Kiwoom Securities, explained, "The investment point for waste disposal companies can be seen as continuous fee increases," adding, "The first quarter is typically a period when waste disposal companies’ performance is expected, and the market size is also growing by more than 10%."

This content was produced with the assistance of AI translation services.