A lot is unknown about the current state of the covid emergency in China. After the end of its draconian zero-covid policywhich put entire cities into complete lockdown whenever a case was detected, the country has swung to the opposite direction: All quarantine measures are being abandoned despite limited vaccine coverage, and official daily reports on cases and deaths have been suspended.
The economy, already under strains due to the zero-covid policies, is being hit further by the new wave. An indicator of the size of the emergency can be found even in the stocks performing well, such as Fu Shou Yuan International Group.
A bet on medical and funeral stocks
Fu Shou Yuan is China’s largest provider of funeral and burial services. It’s been in operation since 1994, working in 16 cities in 10 provinces. It owns 14 cemeteries and manages three.
The company’s stock, which is traded in Hong Kong, has been surging for the past two months. It has risen 80%, from HK$3.89 (US $0.50) on Oct. 31—its low for the year—to HK$7.04 (US $0.90) on Dec. 27. The stock has gained significant traction especially in the past few days: It went up by 22% on Dec. 23, and then again by 10% on Dec. 27. The prices are still below the historic heights reached in 2020 and 2021 in connection with previous covid waves, when the stock was trading above HK$8.
The surge of Fu Shou Yuan stock is part of a broader trend of investment in medical stocks that started in anticipation of covid surges following the abrupt relaxing of government policies.
It is hard to say how many people have died of covid since the policy was suspended. Government sources say there have been 250 million covid cases, equal to 18% of the populationwith the number of new cases up to 37 million a day. But China reported only one covid death for Dec. 26, while estimates put the real toll around 5,000 per 1 million infections.
