Asia has two of the most populous countries of the world – China and India. They are also among the largest emerging markets in the so-called BRIC countries. Some of the countries in Asia are showing signs of recovery. For example, the Shanghai Composite Index has grown by 27% year-to-date until last Friday due to the Chinese government’s efforts to stimulate the economy. A Marketwatch news report on Feb 13 said “Loans extended by banks rose to a record 1.62 trillion yuan ($237 billion) in January, accelerating from 771.8 billion yuan issued in December, according to data released Thursday by the People’s Bank of China.”
In addition to China and India, the former “Asian Tigers” of Singapore, Taiwan, Hong Kong and South Korea are also in Asia. Singapore has become the new “Switzerland of Asia” due to its favorable status as a off-shore banking haven. Besides these countries, Japan – one of the top economies in the world, is also in Asia. The oil-rich Middle East countries hold some of the largest sovereign wealth funds in the world. On the political front, China is a community country but follows a unique type of economic system called “Market Socialism”(capitalist market with communist political system). India is the largest democratic country in the world. Except Israel, most of the Middle Eastern countries are monarchies. So overall Asia is an interesting continent to monitor with its different types of economies and political systems. From an investment perspective, my research to identify the top 10 companies led to the FinanceAsia.com site which publishes the top 100 companies in Asia.
The following is a brief overview of the Ten Most Profitable Companies in Asia:
1. PetroChina Co. Ltd. (PTR) is an integrated oil and natural gas company in China. All of of its production-related assets located in China. PetroChina had a total revenue of $159B last year. The P/E is 7.15 and the dividend yield is 4.65%. Annual EPS in the past 5 years increased by 23%. Currently S&P has a “Five-Star” rating on PetroChina.
2. HSBC Holdings PLC (HBC), one of the largest banks in the world, pays a dividend of 10.23%. HSBC is incorporated in the UK but FinanceAsia lists it in the top Asian companies since HSBC has huge operations in Hong Kong. HBC is currently not an investor’s favorite since its a bank stock.
3. Samsung Corp(OTC: SSDIF) is a top digital equipment and home appliance maker from South Korea. In the US, the stock is thinly traded on the OTC market. Samsung does not pay a regular dividend.
4. A provider of mobile telecom services in mainland China and Hong Kong, China Mobile Limited (CHL) has a subscriber base of 399.5 as of August, 2008. CHL has a profit margin of about 27% and the annual earnings growth is 17%. The market cap. is $178.9 B and the yield is 3.84%.
5. China Construction Bank Corp. trades on the OTC market with ticker CICHY.
6. Sinopec Shanghai Petrochemical Co Ltd (SHI) is another petrochemical company in China. The current yield is 5.39%.
7. Industrial and Commercial Bank of China is not listed in the US markets.
8. Bank of China (3988.hk) trades in the Hong Kong Stock Exchange.
9. One of the world’s largest integrated steel producer is POSCO (PKX) of South Korea.Due to the collapse in steel prices PKX has fallen 59% in in the past 52 weeks. PKX does not pay regular dividends.
10.India-based Oil & Natural Gas Corporation(ONGC.NS) trades on the New Delhi Stock Exchange.