Having fun with the new Tikr screener - India vs Asia

To get an overview of the market of listed companies in India, China and Hong Kong (referred to as China hereafter), South Korea, and Taiwan. For this comparison I have taken only companies above USD 1 bn in market capitalisation. Though China for obvious reasons has the most listed companies above USD 1 bn , there seem to be fewer <USD 2.5 bn companies in India than in the other countries.   
















The profitability of Indian companies looks lower than companies in China, Korea and Taiwan compared to the market capitalisation. This would be due to higher valuation multiples for Indian companies. 











 



To understand the reasons for the higher valuation, I looked at 3 things, which will still not explain everything but gives a good idea. 

1. I pulled out the RoE of the companies and Indian companies fare much better than the others, which would explain the higher valuation to some extent. This also needs to be looked in the context of risk free rate, which is the highest in India at 6%, China at 3% and Korea at 2% at Taiwan at 0.4%.

2. The other thing I did was to look at the historical growth rate of the companies where again Indian companies had the higher median 5 year CAGR profit growth of ~9% whereas Chinese and Taiwanese companies grew at ~7% and Korea at ~6%. 

3. The last thing I did was to look at the median free float for Indian companies is the lowest at ~36%, whereas China is at 43%, Korea is at 55% and Taiwan is at 74%.   



























Another interesting thing that popped up for companies above USD 10 bn market capitalisation was that China had the most diverse industries represented with 55 different sectors, followed by India at 28, Korea at 24 and Taiwan at 16. 

In upcoming posts I will do a sector wise analysis of companies in India and China to get a better understanding.













Comments

Post a Comment

Popular posts from this blog

India vs China - Banks

Image
For this analysis, I will be looking at only the top 5 listed banks in each country.    China The total assets of the Chinese banking industry are ~ USD 49 tn and system wide non-performing loans (NPLs) are at ~1.8%. Classication of NPLs is done using the Expected Credit Loss (ECL) model in IFRS accounting. Loan loss allowance is stipulated at 150% of NPLs.  There are 23 banks greater than USD 10 bn market cap. For analysis, I will only be looking at the top 5 banks by market cap, which are Industrial and Commercial Bank of China (ICBC), China Merchants Bank (CMB), China Construction Bank (CCB), Agricultural Bank of China (ABC), and Bank of China (BOC). All but CMB are government owned. They constitute ~38% of total banking assets and ~ 54% of total banking profits. I have summarised the key financial and business metric in the table below (figures in USD bn except avg employee salary that is in USD).  India The total assets of the Indian banking industry are ~ USD 2.7 tn and system wi
Read more

India vs China - General Insurance

Image
Trying to compare general insurance companies across various emerging markets and see how the Indian insurance industry may progress. All numbers are approximate. Summary India in 2021 seems to be where China was in 2005 even though India's current GDP is slightly higher than China's 2005 GDP (USD 2.8 tn vs 2.3 tn). Health GWP seems to be a bigger probably due to no nationwide public health coverage (barring recent efforts by the government). Though it is well-known that premium growth outpaces GDP growth by a factor of 1.5-2.0x, what needs to be seen is the impact on traditional insurance players of online-only insurance companies and insurance aggregators.  Online insurance players entered China at a later stage of its market development than India so the impact of online players may possibly be higher in India given the lower development and penetration of entrenched forces. Another observation from the Chinese market is that Health insurance grew at a much faster rate compa
Read more