You can call it a baby boom, but not in the sense that the Chinese are having more babies; in fact, despite moving first from a one-child policy to a two-child policy to now, as of this week, a three-child policy, China is still, like many other advanced nations, stuggling to increase the birth rate. In China’s 2020 census, published three weeks ago, data showed that China's population was growing at its slowest pace in decades. An aging population with fewer kids means less workers and more state money to fund the elderly, a bad combination for a growing economy.
But while China's policy may not yield the baby boom results for which it was designed, China's baby and maternity stocks are indeed experiencing a boom. To wit, Dairy firm Beingmate Co. jumped 10% in Shenzhen, while share of Goodbaby, which makes children's products, jumped 31% in Hong Kong. Suzhou Basecare Medical Co., which offers genetic testing for couples looking to undergo IVF, rose 15%.
And then there was Jinxin Fertility Group, which provides assisted reproductive services, gwhich gained nearly 18%, while Aidigong Maternal & Child Health, which offers maternity health services, increased 22%. Beingmate, a major infant formula manufacturer, climbed 8% in Shenzhen. Goldlok Holdings, which makes electric trains and dolls, jumped 10% while clothing maker Lancy was up 7%.
Whether the new policy will be effective (the second child policy didn’t boost growth like Beijing had hoped) is ye to be determined. But investors in these baby and maternity stocks seem bullish on a new China baby boom.