The coronavirus outbreak is barely a month old but its already leaving its mark on the ASX. Those who doubted our dependence on China will only need to look at the profit announcements by several high profile ASX stocks.
Market darling and hearing implant developer Cochlear Limited (ASX: COH) is the latest to warn about the impact of the epidemic.
Health experts aren't officially labelling the coronavirus an epidemic (the WHO is "only" calling this a global emergency), but more people have died from the latest viral strain than SARS back in 2003. The latest reports put the death toll from the 2020 epidemic at over 1,000.
China disrupted
But Cochlear is only but one that is impacted by the outbreak. Vitamin supplier Blackmores Limited (ASX: BKL) went into a trading halt to work out how badly it will be hit given that China is its key market.
Electronics chain JB Hi-Fi Limited (ASX: JBH) may have delivered a better than expected result but it also flagged the risk that it will run out of products given that just about all electronics are made in China.
If this poses a risk to JB Hi-Fi, it will also be a threat to other retailers like Harvey Norman Holdings Limited (ASX: HVN), Wesfarmers Ltd (ASX: WES) and Reject Shop Ltd (ASX: TRS).
Cut off from supply chain
Meanwhile, rail operator Aurizon Holdings Ltd (ASX: AZJ) warned that the delivery of the 66 Wuhan manufactured rail wagons that it ordered will be delayed, according to the Australian Financial Review.
The Chinese city of Wuhan is the epicentre of the coronavirus and factories there have gone into a lockdown.
Another that depends on China for supplies is perennial underperformer Boral Limited (ASX: BLD). The building products group thinks its too early to say how its inventory levels could be impacted, although this is only one of its many problems.
Boral's chief executive Mike King is unceremoniously shown the door after presiding over a string of profit downgrades. The accounting scandal shrouding its US windows business is a bigger threat to shareholders than the coronavirus, in my view.
Possible winners
If you are wondering if there are possible ASX winners from the health scare, there possibly are a few. I am thinking any manufacturer that produces products in Australia could be smiling as their Chinese-made rivals could struggle to supply the market should the mass quarantine last longer than a few weeks.
One example could be steel maker BlueScope Steel Limited (ASX: BSL). The company had complained bitterly about its Chinese competitors dumping product in the local market.
