Corona Capital: Vaccines, Toilet paper, Schneider

Vinda International Holdings

22/10/2020 10:29

(The authors are Reuters Breakingviews columnists.  The
opinions expressed are their own.)
    By Breakingviews columnists
    LONDON/HONG KONG, Oct 22 (Reuters Breakingviews) - Corona
Capital is a column updated throughout the day by Breakingviews
columnists around the world with short, sharp pandemic-related
insights.

    LATEST
    - AstraZeneca
    - Vinda
    - Schneider

    VACCINE JAM. AstraZeneca’s  AZN.L  vaccine woes could get
worse. On Wednesday, Brazilian health authorities said that a
28-year-old volunteer in the drugmaker’s vaccine trial had died.
And while testing will continue, it’s another setback to hit the
102 billion pound group. Last month, Chief Executive Pascal
Soriot halted testing after a participant fell ill  urn:newsml:reuters.com:*:nL8N2G61J9.
That trial has yet to fully resume.
    Illness and death could make testing harder. In Brazil, the
University of Oxford, which is helping to develop the vaccine,
only recruited 8,000 of its targeted 10,000 participants
 urn:newsml:reuters.com:*:nL1N2HC1O6. But it also must convince thousands of human
guinea pigs to try its vaccine in other markets. This could be
difficult when two-thirds of Americans https://www.ipsos.com/en-us/news-polls/axios-ipsos-coronavirus-index
 say they’re either not very likely or not at all likely to take
a first-generation inoculation. Developing a fast vaccine can be
a slow process. (By Aimee Donnellan)

    DOWN THE TOILET. As pandemic panic buying recedes, shares in
loo-paper maker Vinda  3331.HK  have lost their shine. The Hong
Kong-listed stock plunged some 16% as quarterly results showed
revenue was largely flat from a year earlier. Sales of toilet
paper were on a tear earlier in 2020, lifting the company’s
market value by two-thirds to $4 billion. But as Vinda’s biggest
market, China, contains Covid-19, consumers have lost their
sense of urgency to hoard tissues and other household staples.
    Investors may be panicking too soon. Although the top line
didn’t dazzle, further down Vinda was flushed with success.
EBITDA grew by nearly a third, helped by corporate customers
like hotel chain Shangri-La snapping up napkins and such, as
well as by shoppers buying higher-margin products like wet
wipes. Vinda’s sparkle can endure even after the pandemic
subsides. (By Katrina Hamlin)

    TURBOCHARGED. One of the pandemic’s happier unintended
consequences is greater energy efficiency. That’s the message
from Paris-listed Schneider Electric  SCHN.PA , whose shares
bounced on Thursday after it upgraded full-year targets due to
growing “energy management” sales in the third quarter
 urn:newsml:reuters.com:*:nNDL3vSdLL. The $71 billion French industrial group predicted
a 6% year-on-year group revenue decline for 2020 versus an
original 8.5% drop, implying sales of around 26 billion euros,
some 4% higher than analysts’ consensus. Meanwhile, operating
margins could grow by 10 basis points rather than contract as
previously envisaged.
    The doubling down on making buildings – accounting for
two-fifths of global carbon emissions, according to Schneider –
and thriving data centres more environmentally friendly
vindicates CEO Jean-Pascal Tricoire’s focus on energy, rather
than industrial automation  urn:newsml:reuters.com:*:nL8N2AD3X1. Schneider shares have
risen by a fifth this year, compared to a decline in France’s
benchmark CAC 40 index. A Covid-related spotlight on green
issues should help that outperformance continue. (By Christopher
Thompson)
    
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UPDATE-BREAKINGVIEWS-Corona Capital: U.S. tests, UK loans, Man U
groans     urn:newsml:reuters.com:*:nL8N2HC3CX
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 (Editing by Rob Cox and Oliver Taslic)