Investors Should Know This About The Zika Virus And Haw Par Corporation Ltd

Senior Minister of State for Health Amy Kor had recently stepped forward to say that the Zika virus is here to stay for the long term. The Ministry of Health announced the first Zika case in Singapore on 27 August 2016 and as of Wednesday, there are a total of 341 cases.

Given Singapore’s dense population and warm topical climate, it is a good breeding ground for mosquitoes. The insect can’t be completely eradicated as well. Bites from infected Aedes species of mosquitoes are the primary means for transmission of the Zika virus

One big fear that surrounds the Zika virus is that pregnant mothers who are infected may give birth to babies with microcephaly, a condition where a baby’s head is much smaller than normal.

This has really boosted the sales of mosquito repellent products in Singapore. For instance, Channel News Asia reported last week that local supermarket operator NTUC FairPrice has seen demand for insect repellent and insecticide spike by over 10 times compared to a month ago.

One company in Singapore’s stock market that produces mosquito repellent products is Haw Par Corporation Ltd (SGX: H02). These products come under the company’s Tiger Balm brand.

Source: Haw Par’s 2015 annual report

What’s also interesting to note is that Tiger Balm products are exported all over the world as you can observe from the chart above. The Zika virus is also a worldwide issue; according to the World Health Organisation, there are more than 60 countries with outbreaks of the virus.

But it’s worth highlighting this about Haw Par. The company had generated operating profit of S$142 million in 2015, with its Healthcare segment accounting for 33% of that. Within the Healthcare segment, it’s unclear just how big the insect repellent business is.

So, even if Haw Par’s mosquito repellent products are able to sell like hot cakes in the future, it’s not easy to tell if it would be enough to move the needle for the company.

For more investing insights and to keep up to date on the latest financial and stock market news, you can sign up now for a FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock Singapore. It will teach you how you can grow your wealth in the years ahead.

Also, like us on Facebook to follow our latest hot articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Ong Kai Kiat does not own shares in any companies mentioned.