The valuations of Chinese seafood companies are at all-time highs thanks to a surge in share prices.
The most valuable listed seafood company is Guolian Aquatic, with a current valuation of CNY 5.1 billion (USD 765 million, EUR 651 million), which puts it considerably ahead of what was hitherto the country’s most valuable firm in the sector, Zoneco Group.
Nonetheless, Zoneco shares rose 6.7 percent on 7 January as bullish investor sentiment lifted the entire sector. However, on 14 January, the company announced to investors that it had received a request from the Public Security Bureau for more information as part of an investigation into irregularities in disclosure practices at the company’s listed business. Major shareholders are prohibited from selling their stakes while the investigation continues.
Investors appear to have been lifted by growing demand for domestic seafood supply as the annual Chinese New Year rush approaches. Average seafood prices rose 1.7 percent year-on-year in December, according to a summary of the consumer price index released by China’s National Bureau of Statistics. At the same time, poultry prices rose by 0.6 percent and pork prices fell by 1.3 percent after a long period of upward pressure due to supply shortages.
The second-ranked Chinese seafood firm in value terms is Hao Dang Jia (Shandong Homey Aquatic Development), which produces sea cucumbers and also has processing and shellfish units. It was valued at CNY 4.5 billion (USD 675 million, EUR 585 million) as of 7 January, after a 6.2 percent daily rise in share price on that day.
Placed third in market value is distant-water player CNFC Overseas Fishery Co. at CNY 4.3 billion (USD 645 million, EUR 559 million). Hunan Dongting Aquaculture, more commonly known as Da Hu, is in fourth place at CNY 3.5 billion (USD 525 million, EUR 455 million). The firm's share price has gained as it has invested significantly in pharmaceuticals.
China’s stock market has been on a bull run this year while the government has increasingly sought to open the market up further to international investors. The country’s main CSI300 stock index rose over 20 percent year-on-year in the first 11 months of 2020 as investors sought to cash in on an economic recovery after the country brought COVID-19 under control. Morgan Stanley has predicted a 12 percent increase in the CSI300 in 2021 – in part driven by foreign investors hungry for yields in a low interest world.
Photo by Chris Chase/SeafoodSource
