By Clarence Leong
Shares of Cowell e Holdings Inc. rose sharply in Wednesday morning Hong Kong trade, after the camera-module maker’s management indicated limited impact from the recent Covid-19 outbreak in southern China.
Cowell’s shares jumped 17% to 8.85 Hong Kong dollars, paring year-to-date losses to 33%. The stock is on track for its biggest one-day increase since March.
The Guangdong, China-based company said its operations aren’t in the areas most affected by the outbreak, and therefore expects the latest Covid-19 resurgence to have limited impact, according to analysts at Citigroup who hosted an investor call with Cowell’s management.
Citi kept a buy rating on the company, citing its “leading position in Apple’s front-end handset camera modules, product upgrades, entry into vehicle products” and potential exposure in metaverse products.
Cowell’s stock is bucking the downtrend in the wider market. The benchmark Hang Seng Index was recently 1.3% lower at 21272.73.
The company posted net profit of US$49.8 million for 2021, though it had warned in March that Covid-19 outbreaks could put pressure on the smartphone market in 2022.
In neighboring Macau, rising Covid-19 cases have forced authorities to impose lockdowns and order mass testing for residents in the gambling hub. Guangdong officials reported one new case in the province for Tuesday.
Write to Clarence Leong at clarence.leong@wsj.com
