Large Asian companies are expected to see double-digit profits and sales growth in FY2010 and FY2011, according to the latest Asian Corporate Earnings Survey from Daiwa Capital Markets.
The survey said Asia’s top 100 firms are expected to see a combined net income increase of 35 percent year-on-year in FY2010 to US$264 billion. The sales of these companies, which are located in Singapore, Taiwan, South Korea, India, Hong Kong and China, are likely to jump 21 percent to US$2.1 trillion.
The estimated net profit increase assumes growth across the six economies and all sectors surveyed. Substantial advances are expected to be seen in companies from South Korea, Taiwan and Hong Kong, as well as in several sectors including industrials, materials, consumer discretionary and information technology, said Daiwa.
Daiwa’s latest growth numbers are revised from its June report, which said that sales and earnings were likely to climb 19.5 percent and 36.2 percent, respectively for FY2010.
Expectations of expanded impairment losses at Singaporean banks prompted the decrease in net income growth prospects, said Daiwa.
While Daiwa had cut back its earnings growth forecasts for the 100 firms for FY2010, it had lifted its sales growth estimate, given that the top lines of Chinese energy companies are expected to receive a boost from price increases for resource and petroleum related products.
The nine Singapore firms surveyed, which include CapitaLand, Keppel Corp and UOB, are likely to see a 19.4 percent year-on-year increase in net profit to US$11.2 billion and 12.7 percent growth in sales to US$73.9 billion in FY2010.
For FY2011, the nine companies are expected to see year-on-year sales and net profit growth of 15.8 percent and 19.5 percent respectively, said Daiwa.
Overall, the 100 companies surveyed are likely to post a 19.4 percent year-on-year growth in earnings to US$315 billion and 18.2 percent growth in sales to US$2.5 trillion.