Guolian Aquatic’s share price has surged as investors see an upside for heat-and-eat seafood meals with the onset of more COVID-19-related lockdowns in China.
With the Chinese government reacting to the omicron variant of COVID-19 with a series of measures designed to limit its spread by limiting people’s movement in the country. The country has maintained its restrictive zero-COVID policy even as many other countries have shifted their approach to the virus to a more accommodating strategy designed to cause fewer disruptions to their economies.
Since China began imposing lockdowns in early 2020, demand for convenience meals has surged across the country. Guolian has also increased their food deliveries, synching with earlier Guolian investments in what it terms “central kitchens” for preparing seafood for domestic consumption rather than export.
Guolian’s share price has surged 19 percent in January, also on the back of a newly announced strategic partnership with leading online and offline retailer Hema Fresh, which is controlled by the Alibaba conglomerate. The deal with Hema will see Guolian supply Hema with processed foods made from crayfish, shrimp, and tilapia. The framework agreement also foresees Guolian producing own branded products for Hema.
The deal also commits the two firms to jointly building a “rural revitalization industrial park” combining aquaculture with product development and logistics. Chinese tech giants like Alibaba have increased their support of Communist Party policy priorities like rural poverty alleviation after a recent increase in regulatory attention.
Guohai Securities - one of several Chinese brokerages to issue upbeat guidance on the Guolian-Hema deal – pointed to the “huge scope for growth” in what it termed “prefabricated meals.”
Photo courtesy of StreetVJ/Shutterstock
