This Stock Can Grow Further 15% In February Amid Coronavirus Fears

Coronavirus has thus far killed more than 2,000 people and has infected more than 75,000 people. As a result, South Asian countries continue to take extraordinary measures in response to the novel coronavirus.

Mongolia announced today it will keep all schools closed until the end of March after two persons living in China, and close to the border with Mongolia, were diagnosed with coronavirus.

Private jet companies are booming

In the businessworld, there are several industries that are expected to take the biggest hits, such as hotel chains, big airliners, car producers, and cruise line companies. On the other hand, it is apparent that pharma companies are to benefit the most as they are racing to develop treatments that have the potential to beat the coronavirus.

However, there is also one industry that is unexpectedly registering a notable uptick in business - private and charter jet companies.

It has been reported that operators of private jets have received a significant uptick in requests and orders to help those stuck in the country get out.

Many countries, including Hong Kong, have set a mandatory two-week quarantine for anyone arriving from mainland China in a bid to contain the virus from spreading further.

Similarly, MyJet Asia from Singapore said it registered an increase of “80%-90%” in requests in the last month. However, they face the same problems - travel restrictions and planes and crew shortages.

British companies are also seeing an increase in requests due to conventional travel disruptions. Air Charter Service said it has been operating at full capacity for the past few weeks. Besides passengers, private jet operators are also overloaded with requests for transportation of medical cargo to China.

Air Charter Service says it transported 100 metric tons of surgical masks, in addition to passenger transportation.

Air Partner: A chance at redemption

While many private jet operators do not want to disclose information about requests and orders relating to coronavirus, the UK-based Air Partner said it has flown 338 passengers out of Wuhan, in addition to the transportation of 608 boxes of medical supplies to the city.

Air Partner is also one of the very few private jet operators that is a publicly traded company. Shares of the company are trading 0.4% lower this month after registering a drop of around 20% in January on lower-than-expected full-year earnings.

The company reported a profit before tax of at least £4.3 million for the period ending January 31st, which is below the company’s previous expectations. Air Partner cited “slower than expected Q4 trading” and a soft UK private jet market as key factors behind the earnings miss.

Still, revenue rose 4.2% to £77.5 million from £74.3 million a year earlier.

Technical analysis: Plenty of room for a recovery

As seen in the chart below, the price action created a huge gap lower on the lower-than-expected earnings. As a result, Air Partner stock printed a 22-month low last week when it hit £0.68.

The bulls are now looking to push the price higher as investors may look to shift the funds from traditional airlines towards private jet operators. If this proves to be the case, and investors continue the trend from the previous few days of buying Air Partner stock, we may quickly see a test of the major resistance zone between £0.84 and £0.87.

Hence, the price stock has a clear potential to add a further 15% to its stock value in the coming days.

Summary

Private jet operators are surprisingly seeing an uptick in business orders as trapped tourists scramble for an exit out of mainland China. Travel restrictions and planes and crew shortages are the main obstacles to responding positively to a large number of requests, but these companies are still finding ways to transport passengers and cargo to and from China.

Air Partner is one of the very few private jet operators which is a publicly traded company. Its shares fell sharply in January on lower-than-expected earnings for the full 2019 year. However, the coronavirus outbreak may help the company recover in the first half of 2020, while its shares have plenty of room to stage a recovery.