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In the past year, COVID-19 decimated airlines, Beijing authorities halted Ant Group's expected $34.4 billion IPO, the Nikkei recovered its 1991 level, and China and the U.S. worked up their hostility toward Chinese tech companies.   © Nikkei Asia photo illustration
Business Spotlight

The numbers of 2020, from grounded flights to soaring stocks

Our reporters recall the data that have illuminated the year of the pandemic

GRACE LI, Nikkei staff writer | China

TOKYO -- In a week the world will finally say goodbye to a year of unprecedented disruption, in which the coronavirus pandemic has swept through every facet of Asian corporate life.

Hardly a company or business sector has been unaffected by COVID-19. For many, it has devastated sales, decimated customer numbers and almost overnight turned anticipated profits into steep losses.

Yet fortunes have also been made. For sectors such as technology, the virus has been an accelerant that has thrust some companies into greater positions of dominance. Entrepreneurs have seized their chances to steal a march on rivals. Most share markets have boomed, supported by a host of emergency measures wheeled out by governments.

Even without the pandemic, 2020 would have been remarkable to many businesses for its geopolitical dislocation -- a year in which tension between the U.S. and China grew and decoupling of supply chains became ever more apparent.

Correspondents at Nikkei Asia have peered into the daily blizzard of data and picked out some of the numbers that have meant most to them in 2020 -- helping to illuminate what happened to our region and hinting at some of the news that will be made in 2021.

Flying blind

Few industries were as hard hit during 2020's coronavirus pandemic as aviation -- and the scale of decline in traffic at Cathay Pacific is just one example. A global carrier whose business was to connect Asia through one of the world's busiest commercial hubs found itself all but shut down.

As Ronald Lam, chief customer and commercial officer, revealed in mid-April: "On a typical day we would normally expect to carry some 100,000 passengers; earlier this week, this had dropped to 302 only on one day."

The problems have persisted. Cathay Pacific carried fewer than 38,000 passengers last month, a decrease of 98.6% compared to November 2019. The airline, which made a record first-half loss of HK$9.87 billion (US$1.27 billion), expects to lose even more money in the second half of the year.

Cathay, which has required funds from the Hong Kong government as part of a restructuring, is far from alone. Thai Airways has been forced into court-backed rehabilitation proceedings, Philippine Airlines is seeking court protection for a debt restructuring and South Korea's two largest carriers are to merge to try to improve their parlous finances.

The IATA, the global body of the industry, forecasts global air travel demand will take until 2024 to recover its pre-COVID-19 levels.

Ant crushed

In a year of some big stock market listings, the biggest news came from one that did not happen: Ant Group's highly-anticipated initial public offering. The Chinese company's plans were derailed in early November after the Shanghai Stock Exchange abruptly suspended the listing two days before its planned debut, citing a shift in online banking regulations by Chinese authorities.

It could have been the world's largest IPO. The Chinese fintech group was set to raise at least $34.4 billion, or as much as $39.6 billion if a 15% overallotment option was exercised, across the two exchanges in Shanghai and Hong Kong.

The offering had created such a frenzy that retail investors put in bids worth $3 trillion, all of which had to be refunded eventually.

Beijing's push to halt the mega IPO followed a flurry of regulations imposed by the authorities to curtail risk in the digital lending sector after Ant filed its IPO prospectus in August.

Like many financial service providers to have emerged out of the tech world, Ant had been operating with far less regulatory oversight than its more traditional financial peers. The increased scrutiny on the sector is also going to affect other internet giants, including Tencent and, which operate online microlending business as well.

Back to the future

Investors in the Japanese stock market were in for a positive surprise during the latter half of this year, as the country's equity benchmark, the Nikkei Stock Average, or Nikkei 225, reached its highest level since 1991 -- when Japan was facing the collapse of its bubble economy.

The index, up 13% so far this year, recovered fully from the coronavirus-induced global market downturn in the summer and has continued to show strong momentum, supported by hopes for an economic boost from the rollout of COVID-19 vaccines.

The tech-led surge in the U.S. has also helped prop up Wall Street, with the Dow Jones Industrial Average reaching a historic milestone by hitting 30,000 for the first time. The benchmark has climbed 6% compared to the beginning of the year.

Although Japan's Nikkei index has experienced bigger gains in 2020, they pale in comparison to the Dow when looking at the last 30 years: The Dow has risen to levels 12 times its price in early 1991, while the Nikkei has just now recovered that level.

The country's "old-economy" market has made a comeback this year in the wake of more investors expecting a post-pandemic global economic recovery. However, its lack of fast-growing tech stocks, as well as economic stagnation over the past three decades, has kept Japan's stock market in a drawn-out recovery phase.

EV shares rev up

Nio, the first Chinese electric vehicle company listed in the U.S., has become an unexpected stock market winner in the COVID era.

Shares in the 6-year old company, listed on the New York exchange, soared 1,323% to an all-time high of $57.20 per share on Nov. 24, up from last year's close and making it China's second-most valuable car company, right behind Warren Buffett-backed EV maker BYD.

The strong run was boosted by an industrywide rally led by U.S. counterpart Tesla, whose share price has risen almost sevenfold so far this year. Fellow Chinese EV startups Xpeng and Li Auto, which made their stock debuts in the U.S. this year, also performed well, while Nio's improved sales and delivery figures also helped investor confidence. During the July-to-September quarter, Nio managed to narrow its loss to 1.05 billion yuan from 2.5 billion yuan a year before.

While Nio is now worth more than General Motors by market capitalization, it was on the brink of a cash crunch nine months ago. In March, it told investors it might not have enough capital to survive another 12 months. It had to sell 24.1% of its stake to a city government for 7 billion yuan in cash.

For the year ahead, Nio will face more challenges from Tesla, which plans to produce its Model Y SUV in China -- a direct challenge to Nio's offerings.

Nio is also running the risk of being forced to delist from the U.S. under a bill aimed at removing Chinese companies from American bourses for not following audit rules. The bill has been unanimously passed in the U.S. House of Representatives and is expected to be signed into law by President Donald Trump before he leaves office.

Shutting the door

This was meant to be Japan's year on the global stage, with tourism expected to be a key driver of growth by former Prime Minister Shinzo Abe. Instead, the country remained virtually shut during the summer, at huge cost to Japan's visitor economy and to the increasing frustration of international business partners. In July, when the Tokyo Olympics were supposed to have started, foreign visitor numbers were down 99.9% compared to a year earlier for the fourth consecutive month.

Japan received almost 32 million foreign visitors in 2019, becoming one of Asia's most popular destinations, fueled by an easing of visa requirements and the growth of budget airlines. Abe, who stepped down in September, and his successor, Yoshihide Suga, wanted 40 million in 2020 and 60 million in 2030. Bullish hotel companies expanded to meet surging demand even though nine major cities, including Osaka and Tokyo, were expected to face a risk of oversupply of hotel rooms in 2021, according to CBRE.

What of those targets without the Olympic showcase? Japan has restricted the entry of foreign visitors to contain the virus, and the borders still remain closed for most foreign nationals. Struggling Japanese tourist businesses have been plugging deals such as "workations" to try to drum up business from domestic visitors, with the help of a travel subsidy the government started to offer in July. But even that has been suspended as the country fights a rise in infections -- and it is still an open question whether the Olympics, and the visitors, will really come to Tokyo in July 2021.

Liquid assets

In contrast to the failure of the Ant IPO, bottled water brand Nongfu Spring's successful listing in September brought its low-key founder Zhong Shanshan into the spotlight. The stock soared as much as 85% on its first day of trading in Hong Kong, briefly pushing Zhong to the top of China's rich list. The 66-year-old entrepreneur eventually secured the No. 3 spot on a list published in mid-October by Hurun, a Shanghai-based research institute. Zhong is behind only Alibaba Group Holding founder Jack Ma and Tencent Holdings CEO Pony Ma.

Zhong also controls Beijing Wantai Biological Pharmacy Enterprise, which manufactures COVID-19 and HIV diagnostic test kits. Wantai's shares have gained more than 2,100% since the company made its stock market debut in Shanghai in April.

Rupert Hoogewerf, Hurun's chairman and chief researcher, said in a statement accompanying the list that the rapid rebound in Chinese stock prices and a slew of new listings contributed to the biggest wealth increase in the 22 years since the China list was first launched.

Bottom of the barrel

A combination of complex trading factors and speculation of a fall in oil demand lay behind the astonishing negative price at one point in April for West Texas Intermediate crude, a reference benchmark for U.S. oil trading.

On top of speculation of falling oil demand due to the pandemic and subsequent lockdowns, a technical reason underpinned the negative price. In the futures market, many investors rushed to sell their oil to close trades as a key contract of WTI crude expired.

The phenomenon of the negative price was shortlived -- but the coronavirus pandemic has nevertheless left the sector facing more lasting problems.

For the region's national oil companies such as Indonesia's Pertamina and Malaysia's Petroliam Nasional (Petronas) that means more projects that are marginal and a reduced willingness to invest in exploration. National budgets may come under strain in countries more dependent upon oil income.

The arrival of COVID-19 vaccines and optimism for the economy next year have sent oil prices up 20% to $48 over the past six months as of late-December. But they are still 20% lower compared to a year ago. A persistently low oil price might also call into question the speed of the region's transition away from fossil fuels toward renewable energy power supplies or electric vehicles.

India, the tech hot spot

Mukesh Ambani's timing could not have been more propitious when he sought investment for Jio, his Indian telecoms business. As Ambani's Reliance Industries, Jio's parent, was coming under pressure because of its high debt load and defying any doubts about the coronavirus pandemic, Ambani struck a string of deals with some of the biggest names in global tech, from Facebook to Google.

The $20.2 billion invested in minority stakes in Jio has eased Reliance's balance sheet problems and probably paved the way for a successful initial public offering of Jio. It also highlighted how much the tech sector has emerged from the crisis with much of its firepower intact -- and underscores how important India is as an industry battleground. As the U.S. and India develop hostility toward Chinese tech companies, the Reliance plea for investors was the right message at the right time.

Last month Ambani secured another $6.4 billion for Reliance Retail Ventures from investors based in the U.S. and the Middle East. Reliance is a Goliath in India's retail sector but lags and Walmart-owned Flipkart in the e-commerce space. With leading investment companies on board, Reliance Retail now has the funds to compete off and online in India's estimated $700 billion retail markets.

PPE becomes the go-to item

It took a global medical emergency to make a Malaysian producer of latex gloves one of the hottest companies in the world. By June, the company -- the world's largest maker of latex and nitrile gloves -- was making a quarterly net profit that was 365% higher than in the same period of 2019, and monthly sales orders were up by some 180%. Lead times for orders "went up from 40 days to around 400 days," the company said.

In an interview with Nikkei Asia, published in April, founder and Chairman Lim Wee Chai reflected on the demands on the company and its workers as it fought its own problems with lockdowns and working through the pandemic.

Late in the year, Top Glove had to shut most of its factories after a big coronavirus outbreak centered on its accommodation complex for migrant employees. The company faced heavy government criticism.

At one point Top Glove's shares had gone up more than 500% during 2020, but its later problem, with a consequent impact on sales, has led to a 30% drop in the share price from its peak.

Blue sky thinking

China's significant drop in pollution in the early days of the coronavirus outbreak, when much industrial activity and transportation was curtailed, offered a tantalizing -- but perhaps all too brief -- harbinger of better times.

The level of fine inhalable particulate air pollution -- so-called PM2.5s -- fell significantly in the 30 days after the Chinese New Year holidays were originally scheduled to end, on Feb. 3, compared to the equivalent post-holiday period in 2019, according to the Centre for Research on Energy and Clean Air, a Finnish research organization.

Levels of harmful pollutants, including nitrogen dioxide and sulfur dioxide, also fell, highlighting the scale of contamination caused by economic activity.

China got to enjoy unusually blue skies because of COVID-19, but the good air quality did not remain for long. As soon as power generation, manufacturing and transportation resumed, pollution went back to precrisis levels by May, before falling under 2019 levels again.

A recent CREA report suggests that "industrial output and state-driven investment spending have led the recovery while measures to support consumption have been modest compared with other major economies." It goes on to warn that "pollution has rebounded faster than the economy."

Despite the huge problems for the economy, there was anecdotal evidence from around the region that many people welcomed the improved air quality. If Asia can rebuild after the pandemic while continuing to shift toward fewer pollutants, it might be a positive outcome of the COVID crisis for almost everyone.

Reporting by Eri Sugiura, Jada Nagumo, Rurika Imahashi and Akane Okutsu in Tokyo and Nikki Sun in Hong Kong.

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