SINGAPORE – Singapore Sea internet services group, Chinese electric vehicle maker BYD and e-commerce platform Pinduoduo were the top three Asian winners in the stock market this year when investors came to -into companies growing across the COVID-19 pandemic.
Thanks to worldwide currency rebates and fiscal incentives that have generated money for investment, global stock markets have recovered faster than real economies. Such a development created some high-flying Asian companies that investors hoped to become the next Tencent Holdings or Alibaba Group Holding – the two most valuable companies in Asia, each now worth around $ 700 billion .
Sea was the best example, famous for the Shopee e-commerce platform in Southeast Asia. Market capitalization more than quadrupled this year to $ 102 billion, making it the most valuable listed company in the region. That growth rate is No. 1 among about 500 major Asian companies with a market potential of more than $ 10 billion at the end of 2019, according to QUICK-FactSet data as of December 22nd.
Sea’s three pillars – e-commerce, online game and e-payment – all benefited from the pandemic, and continued with aggressive marketing to capture market share. Being a rare Southeast Asian tech startup listed on the New York stock exchange, it attracted U.S. investors who see high growth potential in the region.
In addition, Sea won a digital banking license in Singapore earlier this month, which opened up more fintech opportunities for the company, giving further impetus to its shares.
Similarly, Pinduoduo has listed Nasdaq, known for its generous group purchase discounts, among a few Chinese e-commerce companies that have benefited from growing demand during the pandemic, with its its market cap almost squared to $ 170 billion.
Online sales for the company remained strong even after the pandemic was largely in China. In the July-September quarter, Pinduoduo’s revenue rose 89% to 14.2 billion Yuan ($ 2.1 billion) from a year earlier, and its net loss was down to 784.7 million Yuan from 2.34 billion Yuan in the same quarter last year.
“Information technology was undoubtedly the best sector to play in 2020, and this move could usher in next year as consumer behavior is reshaped by a travel ban related to COVID and locking measures, “said Margaret Yang, a strategist with DailyFX in Singapore. . “This could have a lasting impact on consumer behavior and preferences.”
Asia’s second-largest winner, BYD, increased market capitalization by 333%. The Shenzhen-based automaker, which has received support from Warren Buffett since 2008, has significantly improved deliveries as China recovers strongly from the pandemic. In November, it more than doubled electric vehicle sales from a year ago, and now has its largest share in China ‘s EV market.
BYD electric sedan is on display at a shopping mall in Hangzhou, China. The market capacity of the Shenzhen-based automaker has exceeded 300% by 2020. © AP
Investor confidence was also boosted by progress in the BYD battery industry. The Battery Blade which it had been developing for years was launched in 2020. The battery can increase energy density by at least 30% and reduce raw material costs by 30%, according to the company.
Other car battery manufacturers also made the list of the top winners. China’s Contemporary Amperex Technology had more than tripled to $ 111 billion, and South Korea’s LG Chem saw its value rise 2.5 times. LG Chem’s market share in EV batteries jumped to 25% this year, from 12% a year ago, as it targeted Europe.
Expectations are clear next year for LG Chem as incoming management Joe Biden is expected to focus on the environment, which should boost demand for electric cars in the US
Globally, Tesla’s stock performance showed that investors had high expectations of EVs, with its market value rising eightfold to more than $ 600 billion, far higher than Toyota Motor, Japan’s most valuable company .
The industry gathering has also included EV. The start-up market share of Nio’s Chinese EV Nio, which is not among the top 500 Asian companies as its market value was less than $ 10 billion at the end of 2019, increased 17 times to $ 74 billion – higher than General Motors – as well. better sales and delivery figures have helped investor confidence.
A few healthcare-related IT companies gained significantly this year, with Alibaba’s Health Information Technology shares listed in Hong Kong rising 219% and Japan’s M3 medical information platform up 179%.
After a collapse in March when the pandemic spread worldwide and governments halted economic activity, stock prices have been on an upward path since April after diseases peaked in many countries.
The Nasdaq index climbed 43% this year, while the average Kospi stock from South Korea and Japan’s Nikkei rose 24% and 12%. The Shanghai Composite Index also rose, 10%. The Nikkei Asia300 index, which covers major Asian stocks outside of Japan, gained 17%.
However, Southeast Asian markets, which do not hold many high-tech technical inventories, are usually underperforming, with SET Thailand down 10%.
Five Asian companies made the list of the 20 most valuable companies in the world: Tencent (No. 7), Alibaba (8), Taiwan Semiconductor Manufacturing Co. (12), Samsung Electronics (13) and Chinese beverage manufacturer Kweichow Moutai (17). There were only four Asian companies in the top 20 at the end of 2019. TSMC and Kweichow Moutai are new entrants; The Industrial and Commercial Bank of China fell off the list.
Some Asian companies would ride on the stock market rise to be public this year, making initial public donations. KE Holdings in China, which listed the NYSE in August – the largest IPO by a Chinese company in the U.S. this year – is now valued at nearly $ 80 billion, nearly eight times its value when Tencent and SoftBank Group invested in the company last year.
The company, also known as Beike Zhaofang, is the mainland’s largest online real estate trading platform, earning revenue mostly from commission fees. Investors are attracted to the company’s business model, as it costs as much as a 3% commission on home sales while keeping upside down costs lower than those for traditional property groups. The company’s adjusted net profit more than tripled to 1.86 billion Yuan in the quarter ended September.
At the same time, Asian companies in traditional sectors such as energy and transportation lost significant market value this year as their core industries were hit hard by travel loops and other diffuse restrictions. The market value of Japanese oil giant INPEX and CNOOC state-of-the-art crude oil fell 52% and 44% respectively, while the value of Western Railway fell 47%.
Some analysts believe the bull run is not over. “The overall uptrend is still for the global stock market, although some technical pullbacks into the first quarter of 2021 are possible,” Yang said.
She pointed out that stock market valuations appear to be “overstretched” but the appropriate monetary environment and expectations of vaccines may support a bull market in the medium term.
She said U.S. President Biden could bring major changes to American foreign policy in the wake of tax reforms. “Furthermore, the visual impact of the pandemic of COVID-19, the uneven distribution of COVID vaccines around the world and the continued spat of the US-China are among the main event threats.”
Additional statement by Nikki Sun and Narayanan Somasundaram in Hong Kong and Kim Jaewon in Seoul.
