Date
26 July 2017
Demand for baby products has seen a dramatic surge since China ended its one-child policy. Photo: HKEJ
Demand for baby products has seen a dramatic surge since China ended its one-child policy. Photo: HKEJ

New population policy to bolster infant-related stocks

Infant-related counters are expected to rise following an end to China’s one-child policy despite a general downtrend in the stock market.

About 3 million to 6 million more babies will be born each year under the new policy that allows couples to have two children, benefiting shares of companies engaged in the production of baby formula, diapers and other baby-care products, the Hong Kong Economic Journal reported on Monday, citing estimates by Credit Suisse.

The National Health and Family Planning Commission forecasted that there will be 17 million people added to the population by 2020 as the new policy is expected to boost the country’s birth rate.

Demand for baby products has already seen a dramatic surge, with baby formula becoming one of the top three imports consumed by Chinese people during the week-long Lunar New Year festivities, according to data from Alibaba Group Holding Ltd.

CCB International Securities Ltd. projected an additional 2 million babies will be born each year following the new policy that was unveiled in October last year and took effect on Jan. 1.

China Mengniu Dairy Co. Ltd. (02319.HK), Hengan International Group Co. Ltd. (01044.HK) and Livzon Pharmaceutical Group Inc. (01513.HK) are among the companies whose shares are expected to surge in view of the new policy, CCB International said.

[Chinese version中文版]

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