Breakingviews – Corona Capital: Airlines, Pets, Ozon, Gloves – Reuters

LONDON/HONG KONG (Reuters Breakingviews) – Corona Capital is a column updated throughout the day by Breakingviews columnists around the world with short, sharp pandemic-related insights.
Rehoming and Welfare Assistant Marina Elands takes Charlie, a Bichon Frise, for her daily exercise at Battersea Dogs and Cats Home, in London, Britain June 9, 2020.
– Qantas
– Pets at Home
– Ozon
– Top Glove
STICKING THE NEEDLE IN. Trust an Aussie to inject some plain speaking into the anti-vaxxer debate. Qantas Airways Chief Executive Alan Joyce said on Tuesday the Australian carrier would require international passengers to be vaccinated against Covid-19. Such simplicity will doubtless outrage vaccine sceptics as much as it appeals to airline bosses navigating a bewildering and expensive array of pre-flight testing regimes. Long-term it makes sense. Getting there, however, will take finesse.
Qantass stance has precedents people without yellow fever vaccinations are denied entry to countries like Kenya and Tanzania, limiting anti-vaxxers holiday options. But prolonged Covid-19 vaccine rollouts muddy the waters. Old and vulnerable people are rightly first in line but theyre hardly the main flying demographic. Poorer countries will also be down the queue. And PR nightmares loom if young Aussies cant fly home due to a family bereavement, say. Airline streamlining may carry hidden risks. (By Ed Cropley)
PET PEEVE. The pandemic pet craze may be running out of steam. At least thats what investors appear to be taking from Pets at Homes half-year results. Although the supplier of pet food and flea collars upgraded its full-year pre-tax profit guidance to say it would match 2019s takings, a warning that Covid-19 continues to create material uncertainties seemed to spook the market. The companys shares tumbled 7%.
Pets are a safe haven amid the pandemic. The United Kingdoms Dogs Trust said last month it received 1,000 requests for a single dog, and puppy prices have soared as high as 11,000 pounds. Pets at Homes valuation reflects the boom: at nearly 27 times expected earnings, its more than double that of high street mainstay Marks and Spencer. The bull run may lose pace, however, if the current rollout of vaccines sees life return to normal. People might then be out more, and less reliant on furry friends. (By Aimee Donnellan)
END ZONE. Russian online retailer Ozon on Tuesday priced each of its American depositary shares at $30 in its initial public offering in New York. The price overshot a range of between $22.50 and $27.50 announced last week and put the valuation above $6 billion. The IPOs popularity shows the Covid-19 boost in online shopping is here to stay particularly in Russia, where a major barrier to punters making the switch was a lack of trust in paying for something before getting it.
Busting the target also shows Chief Executive Alexander Shulgin managed to convince investors that by burning cash today, Ozon can bring down the cost of delivery and finally become EBITDA positive. With Russian e-commerce a crowded sector, competition will be fierce. Shulgin will need the share of Russians doing their shopping online, currently just 11%, to keep growing. (By Dasha Afanasieva)
NOT IMMUNE. After enjoying months of supernormal demand, Malaysias latex glove champion has itself caught Covid-19. Nearly 30 of Top Gloves factories will be closed for virus screening and quarantine, authorities said on Monday, after more than 2,000 of its employees tested positive. The companys shares slumped nearly 8% on Tuesday.
Its unclear how big of a business setback this will be. Spiking demand for personal protective equipment fuelled a nearly 335% surge in Top Gloves share price this year, despite allegations of forced labour. The $14 billion company has also been mulling a Hong Kong listing to add to its tickers trading in Malaysia and Singapore. Although Top Glove said in September that it expected glove demand would grow by a still robust 15% post-crisis, the latest disruption to production facilities, along with the possibility of a vaccine breakthrough, could combine to finally cap its rally. All bad things must come to an end. (By Sharon Lam)
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