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Asia: fastest-growing profits
08
Jun
Asia: fastest-growing profits


We continue reviewing companies which have shown most significant growth of profit for the last five years (from April 2011 through April 2016), and which, thus, are not bubbles. Today's review is dedicated to the Asian stocks. It includes companies with the highest five-year earnings growth, market capitalization of not less than $300M, and the P/E coefficient (capitalization to profits ratio) not higher than 30. The latter means that the shares are not overestimated, and they can be purchased without fear that this company, in fact, is a bubble.


Today’s review has one distinctive feature – almost all of the listed companies are chinese-based. The only exception here is Japanese Nippon Suisan Kaisha. Compared to other regions, all of these companies have a significant growth rate: over 200% (for the last 5 years). At the same time, all of them pay low dividends and have fairly high P/E (not less than 14). This makes them less attractive for investment than comparable companies from other countries. The capitalization and turnover of all the companies listed today are converted in dollars. Quotes are still given in the currencies of trade. Letter 'M' refers to millions, 'B' means billions. 

 

1. Dongxu Optoelectronic Technology 

  • Ticker: ​000413
  • Exchange: Shenzhen Stock Exchange
  • Country: China
  • Currency: Yuan
  • Capitalization: $4.6B
  • Annual turnover: $698M
  • P/E: 16
  • Annual dividends: 1.2%
  • Quotes change: –34%
  • 5-year profit growth: +287%
  • 5-year turnover growth: +126%


Waterfall with colourful lightning by Dongxu Optoelectronic Technology


Manufacturer of major appliances and electronic components. Focuses mainly on production of LED devices for public and personal use. Besides, the company is actively engaged in research studies in the sector of electronics. Among its accomplished projects there are lightnings of huge shopping malls, hotels, highways and squares. 


2000s were a tough period for the company: a deep negative trend and a record low of 2005 followed by a fragile recovery in 2007 and a slump in 2008. However, since 2008 the quotes came to the stable growth. As early as 2009 they beat the records of 2001 and 2007, and by 2015 grew by 14 times compared to the minimum of 2008. After the burst of the second Shanghai bubble they lost the ground and slipped to the rates of 2014, anyway, it is much higher than the level of the previous years. The dividends were paid only once: in 2015. 

Dongxu Optoelectronic Technology has a relatively high investment attractiveness. The advantages of the company are its deep history, an excellent growth of revenue and turnover. The drawbacks are extremely low dividends and uncertain schedule of payments. 

 

2. PetroChina Jinhong Energy Investment

  • Ticker: 000669
  • Exchange: Shenzhen Stock Exchange
  • Country: China
  • Currency: Yuan
  • Capitalization: $1.1B
  • Annual turnover: $407M
  • P/E: 24
  • Annual dividends: 1.3%
  • Quotes change: –55%
  • 5-year profit growth: +278%
  •  5-year turnover growth: +144%

Oil depots of PetroChina


Investment company engaged in the construction of natural gas long-distance pipelines and city gas pipeline networks. Operates its business mainly in the chinese market and partners extensively with the giant oil and gas company PetroChina.

The story of PetroChina Jinhong Energy Investment quotes resembles the one of Dongxu Optoelectronic Technology: a recession in 2000s, a stable recovery since 2009, a historical record in 2015 and a double collapse caused by the bubble burst. The company has also begun to pay dividends fairly recently (since 2014), which are, however, low. 

PetroChina Jinhong Energy Investment has an average investment attractiveness. Its advantages and disadvantages are the same as of Dongxu Optoelectronic Technology, while the P/E is high, which scales up the risk of the further dropdown.


3. Shandong Hi-Speed Road & Bridge

  • Ticker: 000498
  • Exchange: Shenzhen Stock Exchange
  • Country: China
  • Currency: Yuan
  • Capitalization: $1.1B
  • Annual turnover: $1.1B
  • P/E: 29
  • Annual dividends:  -
  • Quotes change: –16%
  • 5-year profit growth: +263%
  • 5-year turnover growth: -


Giant Jiaozhou Bay Bridge

The company is engaged in the management of roads and bridges in Shandong Province, the territory where Tsingtao city, famous for its huge bridge across the Jiaozhou Bay (42,5 km long), is located.

Like many other companies, Shandong Hi-Speed Road & Bridge was actively involved in the second Shanghai bubble. Its quotes are currently twice lower than the record prices of 2015, yet higher than the ones of the previous years.
Shandong Hi-Speed Road & Bridge has a fairly low investment attractiveness. Although its profit growth is significant, the absence of dividends and quite high P/E make its quotes likely to fall further.

 

4. Greattown Holdings

  • Ticker: 600094
  • Exchange: Shenzhen Stock Exchange
  • Country: China
  • Currency: Yuan
  • Capitalization: $2.4B
  • Annual turnover: $807M
  • P/E: 26
  • Annual dividends: 0.3%
  • Quotes change: –47%
  • 5-year profit growth: +210%
  • 5-year turnover growth: -

One of the Greattown's buldings under construction

Real-estate and engineering company providing residential buildings, retail shops, office buildings and parking lots. The company operates its business mainly in Fuzhou city. 

Of all the companies listed in the review, Greattown has been most significantly affected by the Shanghai bubble: five-time rise and four-time drop of the prices throughout the year and a half. The company started to pay dividends only since 2015, yet they are very low. 
Greattown Holdings is not interesting as an investment opportunity. It has only one considerable advantage – a solid 5 years profit growth, however, it can be applied to all the companies of the review. The disadvantages are lack of dividends, utmost instability of stock prices and high P/E coefficient. Most probably, its quotes will continue losing in value. 

 

5. Nippon Suisan Kaisha

  • Ticker: 1332
  • Exchange: Tokyo Stock Exchange
  • Country: Japan
  • Currency: Yen
  • Capitalization: $1.6B
  • Annual turnover: $6.4B
  • P/E: 14
  • Annual dividends: 0.9%
  • Quotes change: +52%
  • 5-year profit growth: +198%
  • 5-year turnover growth: +6%


Unusually packed Nippon Suisan food

Food retailer company, focused mainly on manufacturing, processing and selling marine products. 
Initially founded in 1908 as a fishing company, it has a rather long history.

The 'golden years' of the company’s success on exchange were 2002-2007, when its stock prices rose by 4 times, setting an all-time record. However, they were brought down by the slowdown of 2008. The quotes managed to regain positions only in 2014, and eventually came closer to the primary record rates by the end of 2015. Since 2002, the dividends have been paid on the regular basis, except for the years of 2013-2014.

Nippon Suisan Kaisha has a quite high attractiveness for investments. Among the advantages are its large scale, excellent profit growth and the lowest in this review P/E. The drawback is its utterly low dividends.


6. Henan Pinggao Electric

  • Ticker: 600312
  • Exchange: Shanghai Stock Exchange
  • Country: China
  • Currency: Yuan
  • Capitalization: $2.9B
  • Annual turnover: $875M
  • P/E: 23
  • Annual dividends: 3.0%
  • Quotes change: -24%
  • 5-year profit growth: +197%
  • 5-year turnover growth: +23%


High voltage switсhes produced by Henan Pinggao Electric

Manufacturer of industrial electrical equipment. The major products are high voltage isolating switсhes, transformers and other electrical devices.


The most rapid growth of the company’s quotes was marked in 2006-2007, when the stocks had gone up dramatically within 2 years. Since then, the stock prices have stayed in the range of 6-15 yuan without rebounding to the previous values. 
The attractiveness of Henan Pinggao Electric for investors is rather average. Despite the solid profit growth and the highest dividends among the companies listed in the review, the latter are still too low and irregular in absolute amount, while its P/E is rather high.  

 

7. Han's Laser Technology

  • Ticker: 002008
  • Exchange: Shenzhen Stock Exchange
  • Country: China
  • Currency: Yuan
  • Capitalization: $3.5B
  • Annual turnover: $835M
  • P/E: 30
  • Annual dividends: 0.9%
  • Quotes change: –3%
  • 5-year profit growth: +196%
  • 5-year turnover growth:  +23%

Laser cutting machine 


Worldwide famous manufacturer of industrial laser processing equipment – laser welding, cutting and photovoltaic devices. Han’s Laser's  distribution chain covers the countries of all continents – Australia, India, the Republic of South Africa, Russia, Korea, Brazil, Turkey, Mexico, etc.


The quotes of Han’s Laser have shown an unstable, yet an obviously positive trend throughout it history. The company encountered three bubbles (2007-2008, 2010-2011 и 2015), while the third one has bust just recently. However, company’s papers have by now reached almost same price level as in their peak of 2007 and 2011 (and even higher, than before). The dividends are paid annually on the regular basis. 
Extremely low dividends and the highest P/E coefficient in the review make Han's Laser Technology moderately attractive for investments. However, it has a few advantages: its solid reputation in the world markets, relatively long history and revenues in a positive trend. 

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