Spring-Themed Stocks Are Nowhere to Be Seen

[Asia Economy Reporter Koh Hyung-kwang] In the stock market, traditional spring beneficiaries such as travel, leisure, and yellow dust-related stocks have attracted investors' attention every year before spring. However, this year, so-called 'spring theme stocks' have failed to gain any momentum due to the impact of the novel coronavirus (COVID-19) outbreak.

According to the Korea Exchange on the 9th, Coway closed at 71,200 KRW on the 6th in the KOSPI market, down 0.5% from the previous trading day. It has fallen 18.9% over the past month and declined 24.7% compared to the year-end price of 93,100 KRW.

This contrasts with last year when the stock price rose 27.1% in two months from 74,400 KRW in early January to 94,600 KRW at the end of February. Coway, a manufacturer and seller of air purifiers, typically sees its stock price rise ahead of spring when fine dust is severe, but this year shows a different pattern.

Another air purifier company, Winix, fell 12.7% from 26,050 KRW at the end of last year to 23,300 KRW on the 6th, and SPG, a manufacturer of air purifier motors, dropped 10.2% during the same period. Lotte Hi-Mart, the largest home appliance distributor in Korea, fell 31.7%. Market experts had expected the small home appliance market, led by air purifiers and clothes dryers, to expand as fine dust intensifies every spring, but this special demand has disappeared this year due to COVID-19.

Outdoor and bicycle-related stocks are also traditionally considered spring beneficiaries as outdoor activities pick up in the warm spring. However, this year, these stocks have not gained strength due to a sharp decline in outings and outdoor activities caused by COVID-19. Hiking and camping theme stocks such as Fila Holdings and LF have plunged 31.8% and 32.4%, respectively, this year, and LS Networks also fell 9.0%. Bicycle-related stocks are not much different. Samchully Bicycle (-7.6%) and Alton Sports (-6.8%) have both been on a downward trend this year.

Among this year's spring theme stocks, only mask-related companies such as Monalisa, Welcron, and Ogong have shown a sharp rise. Monalisa, which produces hygiene products, rose 68% in two months from 3,630 KRW at the end of last year to 6,100 KRW on the 6th. Ogong, which manufactures and sells industrial masks through its affiliate Ogong TS, surged 89.6% during the same period, and Welcron, a manufacturer of household goods using functional microfiber, soared 135.8%.

Seo Sang-young, a researcher at Kiwoom Securities, said, "Every spring, fine dust and ultrafine dust intensify, leading to increased sales of small home appliances such as air purifiers and clothes dryers, and stock prices of companies related to outdoor activities like hiking and camping are expected to rise. However, this year is different. Due to the spread of COVID-19, only stocks of companies producing and selling masks have temporarily risen, while other spring theme stocks have failed to gain strength."

Market experts advise caution against blind investment solely based on seasonal benefits, regardless of a stock's fundamentals, as the influence of seasonal theme stocks, which appear regularly with changes in seasons or weather, is gradually declining. Kim Yong-gu, a researcher at Hana Financial Investment, said, "Seasonal theme stocks related to seasons and weather are characterized by volatile fluctuations without special reasons. Since seasonal theme stocks have recently been moving regardless of the season, investors should keep in mind that they are no longer seasonal beneficiaries."

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