Asia's 10 Most Profitable Companies

Asia has the two most populous countries in the world - China and India. They are also the two 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 an 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 communist country but follows a unique type of economic system called “Market Socialism”(a relatively 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 or dictatorships.

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 are located in China. PetroChina had total revenue of $159B last year. Its P/E is 7.15 and its 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 it's a bank stock.

3. Samsung Corp. (SSDIF.PK) 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 399.5M as of August, 2008. CHL has a profit margin of about 27% and the annual earnings growth is 17%. Its market cap is $178.9B and its yield is 3.84%.

5. China Construction Bank Corp. trades on the OTC market under the ticker CICHF.PK.

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 traded in US markets.

8. Bank of China (3988.hk) trades on the Hong Kong Stock Exchange.

9. One of the world’s largest integrated steel producers 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.

Comments

[HaavBline:]

The FA100 Index excludes Japan. So the title should be "Emerging Asia" or "Asia X Japan".

Size apparently matters in this index too.

Feb 20 11:42 AM

[Value:]

Dear Sirs:

FYI,

#7 Industrial Com. Bank of China trades OTC under IDCBF.PK

#8 Bank of China trades OTC under BACHF.PK

Feb 20 03:02 PM

[David Hunkar:]

Hi HaavBline
Thanks for the info. I stand corrected.

Value
Thanks for the info.When I searched for them, they did not come up with the data provider I use.

-David

Feb 20 07:59 PM

[Conan the B...:]

HBC: Apparently, your research was not really very deep.

Do you by any chance remember a very large Mortgage Lender which HBC took over while the going was really good? Household International.

I wouldn't touch HBC with the proverbial 10 ft. pole.

Feb 21 09:35 AM

[huangthomas:]

Most are Chinese state owned major monopolies (oil, petrochemical, telecommunication, and banks). These are components of FXI. It is nice to know that all major Chinese banks are doing well and are bright spots in Chinese economy.

Just as a reminder, the HS in HSBC stand for Hongkong and Shanghai.

Feb 21 01:25 PM

[Conan the B...:]

Huang: I did read the Article. So what does that have to do with the actual Makeup of the Company. Household International was the Primary Subprime mortgage lender in the USA before Hong took them over.

I've looked at their Chart, It sucks. Debt to asset ratio is 4.
Institutions don't think too much of it. What happens when RBS... the Royal Bank Of Scotland... Has to sell its shares.

The RBS holding represents 25% of HBC. HBC has assets in Hongkong but it is still a British Company whose origins trace back to the Now Expired 100 year lease.

With its "Investment" in RBS, the UK is HBC's largest single investor.

You buy it.

Feb 22 02:02 AM

[who:]

This is a very weak article. Latest no's of 20 million migrant workers loosing their jobs in China is real. China is giving money out to its people to keep them happy.

HSBC 10% dividend, should HSBC maintain this then the stock will shoot up to by at least 100% as the current $ dividend was around 5% before the crisis. I think HSBC will take this opportunity to reserve cash and payout a 5% dividend i.e. keep to its plan.

The PE and PEG for the Chinese banks are very high. The banks are essentially policy banks hence they run a high risks of bad loans in traditional banking.

Feb 23 03:39 PM

[who:]

Oh - India...very populous but also the majority is very poor. Even more so now with crisis. Extremely poor infrastructure, extremely poor and money pay for government service, poor rich divide is extreme, poor security, etc., etc. Micro business environment.

Feb 23 03:46 PM

[Conan the B...:]

HSBC: Hongkong Shanghai Bank.

Look out below, Loss of $18 billion, shuting down its financial unit in the USA, formerly known as Household International. The entire dividend may be in jeopardy.

When an institution has not written down what you know has to be Toxic, you know they will eventually do so.

Mar 02 08:13 AM