Severe winter effect on China economy and stock

Before the severe winter condition, China already experienced higher inflation and run away food price. Now, the winter that paralyzed certain part of the country should have impact on the economy. The direct impact of the winter are disruption of food, electricity and transport.

As the snow damaged road and structure, rebuilding would cost money and the construction stock should do well. Especially those have operation near the southern part of the country.

The disruption to the transport system would cause rising cost and food price hike. Agriculture and food stock might take a hit for the short term. Food consumption pattern would also be affected, since people is unwilling to pay higher price for food.

CIMB has cut the target price of Synear to 1.75 from 3.10 citing potential impact of hash winter and rising risk aversion. This highlight that the analyst target price is transient in nature, because it depends on many assumption which they would adjust from time to time. One should not follow blindly. Since my last purchase of the stock, the macro environment has changed some what, but I remained convinced on the long term potential of the stock. If the market is willing to sell me at 0.8 or 0.9, I would be happy to pick up some.

I think another notable stock for the winter impact would be Guangzhao IFB. I read in the news that one tenth of the forest was destroyed by the winter. This make us wonder what would happen to the company forest? Checked the company IR site, some of the forest is near the southen part of the country. Looks like the market didn't price this news in, as the share price still holds firm. This is the risk of agriculture business, as it is depending on the good weather.