Traditional lion dance during Chinese New Year Pic:Getty
These China-focused stocks are enjoying good fortune ahead of the Chinese New Year
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As Australia prepares for the upcoming Australia Day celebrations on January 26, China is shutting down ahead of the week-long Chinese New Year, or Lunar New Year, national holiday, which starts on January 25.
This is the Year of the Rat, which fittingly for the start of a new decade, is the first of the 12 animals that feature on the Chinese zodiac.
Rats are seen as a sign of wealth and surplus in Chinese culture, while people born in this year are considered clever and quick thinkers — traits that will no doubt be welcome in the currently challenging market environment.
In China, the long holiday will see millions of Chinese leave the country’s major cities to visit family domestically and abroad or go on holidays.
Indeed, Bloomberg estimates that even with the complications resulting from the coronavirus outbreak, some 3 billion trips will be made this year.
China’s growing affluence also means that Chinese tourists tend to be big spenders.
While there is little doubt that the recent bushfires have impacted tourism numbers, China was the largest source for tourists to Australia with an estimated 120,200 Chinese visiting Down Under.
Stockhead has identified 30 non-resource companies with exposure to China across a broad range of industries.
Here is a list of non-resources China-focused stocks:
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| Ticker | Name | Price | % Change | Market Cap |
|---|---|---|---|---|
| BUB | BUBS AUSTRALIA LTD | 0.935 | 117 | $529.5M |
| CLV | CLOVER CORP LTD | 2.74 | 89 | $445.7M |
| DEM | DE.MEM LTD | 0.255 | 79 | $43.8M |
| HCT | HOLISTA COLLTECH LTD | 0.08 | 38 | $18.8M |
| DW8 | DIGITAL WINE VENTURES LTD | 0.0075 | 34 | $9.5M |
| A2M | A2 MILK CO LTD | 15.19 | 25 | $10.9B |
| WLD | WELLARD LTD | 0.058 | 16 | $30.8M |
| FLC | FLUENCE CORP LTD | 0.41 | 15 | $268.7M |
| AVG | AUSTRALIAN VINTAGE LTD | 0.5 | 8 | $140.4M |
| HUO | HUON AQUACULTURE GROUP LTD | 4.52 | -6 | $389.5M |
| OGA | OCEAN GROWN ABALONE LTD | 0.13 | -9 | $27.1M |
| BUG | BUDERIM GROUP LTD | 0.235 | -10 | $20.2M |
| AWY | AUSTRALIAN WHISKY HOLDINGS L | 0.037 | -10 | $60.3M |
| SM1 | SYNLAIT MILK LTD | 8.38 | -12 | $1.5B |
| S66 | STAR COMBO PHARMA LTD | 0.46 | -17 | $39.8M |
| MCA | MURRAY COD AUSTRALIA LTD | 0.16 | -18 | $89.6M |
| NAM | NAMOI COTTON LTD | 0.32 | -24 | $42.8M |
| AHF | AUSTRALIAN DAIRY NUTRITIONAL | 0.098 | -25 | $36.4M |
| BXN | BIOXYNE LTD | 0.017 | -26 | $12.8M |
| SKN | SKIN ELEMENTS LTD | 0.015 | -27 | $2.6M |
| BEE | BROO LTD | 0.016 | -32 | $11.8M |
| CSS | CLEAN SEAS SEAFOOD LTD | 0.725 | -33 | $64.8M |
| JAT | JATENERGY LTD | 0.055 | -37 | $51.1M |
| AU8 | AUMAKE INTERNATIONAL LTD | 0.135 | -39 | $44.9M |
| EHH | EAGLE HEALTH HOLDINGS LTD | 0.11 | -48 | $38.4M |
| LON | LONGTABLE GROUP LTD | 0.155 | -49 | $33.1M |
| FOD | FOOD REVOLUTION GROUP LTD/TH | 0.072 | -53 | $51.4M |
| ABT | ABUNDANT PRODUCE LTD | 0.067 | -67 | $5.7M |
| MPH | MEDILAND PHARM LTD | 0.25 | 25 | $78.2M |
| NUC | NUCHEV LTD | 3.69 | 42 | $166.1M |
Most of these companies have seen their share price slide over the past year, but companies involved in the milk and health products segments have enjoyed considerable success.
Given the popularity of Australian baby formula in China, where it is seen as a premium product, it is unsurprising that Bubs Australia (ASX:BUB) tops the list with its shares up 117 per cent over the past year.
Bubs is a major global producer of goat’s milk powder and also offers organic cow’s milk powder and organic baby food.
It reported a 154 per cent increase in gross revenue to $46.8m in the 2019 financial year.
Fellow goats milk producer Nuchev Limited (ASX:NUC), which listed in December 2019, has seen its shares jump 42 per cent from its IPO price of $2.60.
Food supplement manufacturer Clover Corporation (ASX:CLV) has also benefited from its exposure to the Chinese market, with shares rising 89 per cent over the year.
Its products include a range of foods, drinks and nutraceuticals that contain Omega 3 fatty acids with no negative impacts on smell and taste, as well as infant formula.
Holista Colltech’s (ASX:HCT) health products and low glycemic index noodles have also found a ready market in China, a fact that has sent its shares up 38 per cent.
A2 Milk (ASX:A2M) is another milk products producer that has found favour with investors.
The major manufacturer, which only makes its products from milk containing just the A2 protein that is both easier to digest and healthier, has seen its shares rise 25 per cent over the year.
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