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Starmine Picks 10 Asian Companies To Either Beat Or Miss Estimates

As the Asian earnings season switches into high gear with companies reporting full year results, we highlight 10 companies that seem poised to deliver big disappointments or positive surprises.

There were some repeating themes when we looked at earnings in Asia. Japan benefited from the strong dollar and increased exports. In China, the story was all about the slowdown in the economy and the fall off in demand for commodities, which affected companies tied to the metals and mining industries.

As we do each year, we selected 10 companies that we expect to fall into the “outperform” or “underperform” camp, based on the SmartEstimate and Predicted Surprise data for each. We have summarized that data and the facts behind it for each of the 10 companies below. Historically, our selections have demonstrated an accuracy rate of about 90% in the region, giving investors an edge when it comes to positioning themselves ahead of these earnings announcements. To take a look at how we did last year click here.

When the Asian earnings season wraps up, we’ll report back on how the companies fared – and give you a look at what these companies said about their outlook for the next year.

Here is the list, along with some analyst views:

TOP POSITIVE SURPRISE FORECASTS:

1. China Southern Airlines (1055.HK) is benefiting from a strong traffic demand and lower oil.
2. Newcrest Mining Ltd. (NCM.AX) sees improved gold demand and is helped by the strong U.S. dollar.
3. Murata Manufacturing Co. (6981.T) experienced a surge in demand from China for its mobile products.
4. Shimizu Corp. (1803.T) is already beginning to see Tokyo Olympic benefits and strong margins.

TOP NEGATIVE SURPRISE FORECASTS:

1. China Coal Energy (18198.HK) is reeling from pollution control measures.
2. Nintendo Co. Ltd. (7974.T) saw poor Wii sales as hardware troubles may drive down earnings.
3. DRB-Hicom (DRBM.KL) sees disappointing sales from its Proton vehicle.
4. Mitsui O.S.K. Lines (9104.T) was hit by the port shutdown on the U.S. west coast.
5. Tata Steel (TISC.NS) is hit by falling steel prices and large debt on the balance sheet.
6. Fortescue Metals Group (FMG.AX) feels the pain of falling ore prices, and scrapped bond offering.

 
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