Qihan Cong
ABSTRACT
In early 2020, the outbreak of the COVID-19 severely hits the global economy. With the closure of many manufacturing industries, a large number of employees have lost their jobs, residential consumption fells rapidly and many firms go bankrupt. Under such background, this paper investigates the impact of the epidemic on the Boxes industry and analyzes the changes of each factor in the Boxes industry before and after the epidemic using the Fama-French five-factor model. The results show that the coefficient of market factor decreases due to the epidemic. It indicates that the industry is less sensitive to market volatility and the size factor becomes redundant. The BM ration factor changes from redundant to significant and the coefficient is positive, which indicates that investors prefer value stocks in the Boxes industry after the epidemic. The profitability factor is always redundant and the investment style factor changes from significant to redundant, showing that the COVID-19 pandemic brings opportunities and challenges to the whole industry. It also indicates that companies with a high book-to-market ratio and stable development in the Boxes industry are more valuable for investment recommendation during the epidemic.
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