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12.09.2011Asia's Fab 50

The story of Asia is increasingly the story of China and this year?s list of the 50 best publicly traded companies in Asia-Pacific certainly reflects that.


Forbes.com

The story of Asia is increasingly the story of China and this year’s list of the 50 best publicly traded companies in Asia-Pacific certainly reflects that. Virtually half of the companies–23, to be exact–hail from China. No country  has ever boasted close to that number–including China–since we started spotlighting the region’s most fabulous companies in 2005.

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Last year China claimed 16 places among the elite but as the country’s real estate, construction, auto-making, appliance manufacturing and gold-mining industries continue to boom, an additional company from each of those sectors barged itself into the top ranks. The most notable newcomer: Qingdao Haier, the world’s No. 1 white goods brand. A Chinese bank and, in a first, a chain of car dealerships–Zhongsheng Group Holdings–also won Fab 50 spots. In a mark of how quickly China’s companies have arrived on the world stage, the country had only five members in 2005 and two in 2006.

China’s gain was largely India’s loss. After tying the mainland for the most companies last year, India could muster only seven entries this year. Japan, which led the pack with 13 companies when we started analyzing corporate Asia six years ago, had no companies this year for the first time, partly a result of the Mar. 11 earthquake.

The strong South Korean economy produced eight Fab 50 companies, the most it’s had since 2005, when it also had eight. The chaebols are going like gangbusters and seven of the companies are chaebol affiliates; the eighth is hot Internet company NHN.

The changing lineup each year is a window on the region’s dynamism, and this year was no exception. Some 20 companies are new to the list; five others returned after falling off. That means many excellent outfits didn’t make the cut and none were more notable than Hong Kong’s Li & Fung and India’s Infosys. Both had graced the Fab 50 every year–until this year. It’s not that they had bad years, just that they weren’t good enough.  Now Hong Kong’s Noble Group sports the longest streak–it’s made the list the last six years.

In terms of industry, technology companies once again dominated our list this year with 8 representatives, down from 11 last year.  The consumer durables industry has the second most representatives with 7 companies followed by food companies with 6 members.  For the second year in a row on our Fab 50 list, we did not have any representative from the oil/gas industry.

How do we pick these companies? We started with 1,073 that had at least $3 billion in revenue or market capitalization. We looked at the five-year track records for revenue, operating earnings and return on capital, and then the recent results and share-price movements, and finally the outlook. If it had too much debt, or the government owned at least half the shares, it was out. The result is an honor roll of the region’s best.


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