ZNH - How Hard Will the Wuhan Coronavirus Hit Chinese Stocks?
The rapid spread of the Wuhan coronavirus, which has claimed over 170 lives and infected over 7,000 patients in China so far, is sparking serious concerns about Chinese stocks. Let's see how this outbreak could affect Chinese companies, many of which were already struggling with China's economic slowdown.
The Chinese government has already locked down over a dozen cities to contain the virus, and many cities have been suspending public transportation, taxis, and ride-hailing services. Air travel between Chinese cities is being tightly controlled, and overseas airlines are either canceling or changing their flights into China.
Therefore, investors should steer clear of Chinese online travel agencies like Trip.com (NASDAQ: TCOM), hotel chains like Huazhu Group, and airlines like China Southern Airlines (NYSE: ZNH). Analysts will likely revise their estimates for these companies once they gain a deeper understanding of the outbreak, and the revalued stocks could head significantly lower.