Yoon Ja-young is in charge of articles translated by a generative AI system and edited by The Korea Times. She is interested in improving the newspaper through AI.
Pelosi's Taiwan visit pushes Korean confectionery shares to soar
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By Yoon Ja-young
By Yoon Ja-young
U.S. House Speaker Nancy Pelosi's visit to Taiwan is having an unexpected positive effect on Korean confectionary companies. Their stock prices rose steeply on Wednesday on reports that China banned importation of Taiwanese food items on the eve of the contentious visit.
Crownhaitai Holdings, a major player in the country's confectionery industry, closed at 8,470 won on Wednesday, rising 18 percent from the previous day. Crown Confectionery closed at 11,150 won, soaring as much as the daily limit of 30 percent. Haitai Confectionery and Foods rose 14 percent to 8,000 won. Orion, whose Choco Pie products are popular in the global market, rose 2.7 percent to 102,000 won.
The surge comes amid expectations among some investors that Korean confectionery products, especially those of Crownhaitai Group subsidiaries, may replace Taiwanese products in the Chinese market. In the case of Orion, exports to China already account for over 40 percent of its total sales, while they account for less than 10 percent for Crownhaitai.
According to Taipei Times, China's customs agency announced bans on more than 100 Taiwanese food brands, claiming that they failed to renew export registration.
However, Park Sang-jun, an analyst at Kiwoom Securities, said it isn't clear yet whether Korean confectionery will see increased sales in China.
“Multinational companies can benefit if (Taiwanese) companies with high market shares are banned in China. However, it remains to be seen whether it will actually lead to an increase in sales,” he commented.
Investors are advised to remain cautious as Crownhaitai Group shares have previously fluctuated over various issues. Most recently, their shares surged steeply on expectations by some retail investors that the company would benefit from President Yoon Suk-yeol's presidency, for reasons such as the Crownhaitai's chairman coming from the same Papyeong Yoon clan as President Yoon, the company having a production facility in South Chungcheong Province, which is where President Yoon's father is from, and one of its external board members having gone to the same school as the president. The share prices, however, soon fell back to their previous levels.