Thriving industries during Covid-19 lockdown
1 Jun, 2021
Category: Consumer Defensive
Learn how life on lockdown has transformed Malaysian's spending habits and what industries are thriving during this MCO period.
During this Covid-19 containment period, almost everyone has to work from home or relax at home. Despite we are seeing news on business closure every day, there are some industries that are thriving during this period. The obvious ones are easy to spot like food delivery (Food Panda & Grab Food), entertainment (Netflix), and productivity software that make working from home possible (Zoom, Slack).
Here is the list on industries that are making more money during this period. These industries could be a bright spot for investors during times where most of the companies generate zero revenue.
Gaming companies (Tencent, Nintendo, Microsoft) are seeing a soar in the sales of video games and game consoles as people find ways to entertain themselves at home. Demand for Flour (Malayan Flour) is on the rise as people are looking to bake to kill their time. (My Instagram is filled with cake and pastries and the baking ingredient corridors at groceries stores are full of people). As a result, sales for cooking appliances such as frying pans, baking ovens (Panasonic, Whirlpool) are skyrocketing. Although the sales of fresh chicken have been hit as a result of hotels and restaurants operating at minimal levels, consumers are going for food that can last longer, especially frozen food. Integrated poultry producers (CAB Cakaran Corp, QL Resources, Lay Hong) are seeing a spike in demand for nuggets and sausages. Not to mention that value-added products usually command 3-4 times the margin of broiler products. Despite the manufacturing plant of beer manufacturers are being halted during this period, alcohol delivery sites (SoTipsy, Wine2u, Drinkies (owned by Heineken Malaysia) are seeing their sales exploded until they could not cope with the demand by delivering their product chilled. Providing toys (Hasbro, ToysRus) to keep their kids entertained is one of the solutions to keep their kids entertained when parents have to work from home. One US company, Ravensburger has seen US puzzle sales soar 370% in the past 2 weeks, something the company has not seen before in its 136 years history.
Although the examination date has been postponed, parents working from home have more time at home to coach their children now. The online learning site, TAL education, has seen its share price surge by 25% during the lockdown period.
Lastly, research by Commerce.Asia shows that the sales of women's underwear had spiked 900% since the MCO began. Aside from ladies' underwear, gelatine powder and libido enhancers are among the products that had surged in online sales.
Grain Export Restriction
Consumer Defensive |
A bullish grain market is expected as nations are restricting their grain export in order to ensure domestic supplies.