News Alert: Suspension of production in some Ningbo production sites due to delta variant confirmed cases (-ve)
- 10 positive cases involving Delta variant Beilun District, Ningbo have been confirmed
- Expect a short term suspension of production in some Ningbo production site due to lockdown measures
- Expect Shenzhou’s share price to be under pressure by the news
- As at 3:00 p.m. on 2 January 2022, ten positive cases involving the Delta variant in Beilun District, Ningbo have been confirmed.
- The local government has immediately adopted control measures to the Epidemic and announced a lockdown in Shenzhou’s production sites’ areas.
- The involved sites contributed <5% of the total production capacity, where the impact should be short-term.
- Shenzhou’s share price has been under pressure by the COVID-19 situation in Tay Minh and Ho Chi Minh City, where province lockdown was enforced to keep the pandemic in check.
- We expect Shenzhou’s share price to react negatively to the news.
- We currently recommend HOLD with a TP at HKD177.