Covid vaccine means that Freezer Producers are now red hot

  • Pfizer and BioNTech vaccines require extreme low temperatures for storage
  • There is a dire shortage of freezing infrastructure in Emerging Asia
  • We identify the freezer producers
Covid vaccine means that Freezer Producers are now red hot

The prospect of a Covid-19 vaccine is a joyous occasion for the market. Pfizer, BioNTech and Moderna have reported positive results for their vaccine trials.

The Pfizer and BioNTech vaccines require very low temperatures of minus 70C. Temperatures of this magnitude and below are more commonly used to store sperm and corpses. This temperature is far far lower than a normal domestic freezer which operates at -10c at best.

This means that there will be an urgent need for freezing infrastructure. Pfizer says that it has its own freezers.

More than 80% of the cost of vaccination is for cold storage and transportation. The spread of vaccination will be arduous in emerging markets, where infrastructure is weaker.

Medical freezer suppliers are in demand. Many logistics companies such as Fedex operate cold chains. But they have nothing like the temperatures required to store the vaccines.

In Asia, there are a raft of companies that produce or are capable of producing freezers. These companies include those in developed markets such as Japan and EM markets including India.

Freezer Stocks - Price to Book ratio

Twinboard Corp, the Japanese consumer electronics maker, has risen more than 50% since the Pfizer announcement last week. It produces freezer boxes with helium-based technology. It is a clear beneficiary.

Snowman Logistics operates temperature-controlled logistics services in India. It is one of the country's largest blast freezing warehouse providers for the dairy and meat industry. It has the potential to prosper as freezer demand gathers momentum.

In South Korea, Daihan Scientific Co stands out as a good proxy for the deep-freeze boom. It specialises in the bioscience industry and has been preparing for the vaccine opportunity since the onset of Covid-19.

The other companies in our list include consumer electronics companies such Qingdao Haier, Singer Thailand and Hisense Kelon. These companies produce air conditioners and retail freezers. They may have the industrial capability to take on freezer production if the demand becomes acute.

Although the Asian Freezer stocks are up 17% in the past week, we may still be at an early stage. Most EM Asia countries are short of vaccine infrastructure. The freezer stocks may be the next segment to benefit from Covid-19.

reezer stocks - Price Performance (month to date) %

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