As the major holidays of Chuseok (September 24-27) and the Mid-Autumn Festival (September 25-27) approach in South Korea and China, reopening-related stocks are struggling to gain momentum. Typically, Chuseok marks the beginning of a shopping surge that lasts through the second half of the year, but both countries are experiencing ongoing consumer polarization, leading to difficulties across various sectors including cosmetics, fashion, hotels, and retail. However, significant consumer events such as China's National Day in October and South Korea's 'K-Sale Festa' are on the horizon, raising hopes for a revival in domestic stocks.
According to the Korea Exchange on September 22, Amorepacific, a leading reopening stock, saw a 3.8% decline in its closing price compared to August 31. LG Household & Health Care, which is linked to the Chinese cosmetics market, dropped 5.4%, while Cosmax and Korea Kolmar fell by 9.6% and 9.4%, respectively. This decline contrasts with a 3% increase in the KOSPI index during the same period.
Hotel and duty-free stocks also faced challenges, with Hotel Shilla's closing price at 40,500 won, down 9.1% since late August, and Shinsegae falling 13.8% in the same timeframe. Casino-related stocks, including Lotte Tour Development, Paradise, and GKL, experienced declines of 14.2%, 6.6%, and 8%, respectively. Entertainment stocks are also lagging, with HYBE dropping 13.9% to reach a 52-week low, while JYP Entertainment fell 5.8%.
The struggles of reopening stocks are attributed to the prolonged domestic recession and employment instability in both South Korea and China. According to the Hyundai Economic Research Institute, the retail sales index and durable goods consumption growth rate in South Korea fell by 2.4% and 4.1%, respectively, in July, while the youth unemployment rate rose to 6.8%, an increase of 1.3% from the previous month, indicating a deteriorating economic climate. In China, severe domestic demand issues have diminished the holiday shopping boom typically associated with the Mid-Autumn Festival and National Day.
Despite these challenges, the upcoming National Day in China (October 1), South Korea's K-Sale Festa (October 29-November 15), and China's Singles' Day (November 11) present potential opportunities for reopening stocks. A securities industry analyst noted, 'With consumer policy events lined up after Chuseok, including China's National Day and November's Singles' Day, the Korean economy and stock market may enter a phase where they can expect demand momentum from China.'
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.