Smartphone-, consumption-related stocks show well in Nikkei Asia300 Index
South Korean and Indian issues have also been hot since December
TOKYO -- Smartphone-related companies are hot. So too are South Korean and Indian companies. At least that is what the Nikkei Asia300 Index shows when we look at the price movements of its components as well as the moves by country or region.
That shares of companies putting together smartphones or making parts for them are popular comes as no surprise. The handsets have permeated everyday life in Asia and around the world.
Meanwhile, South Korea feeds much of the world's insatiable appetite for semiconductors. Indian companies are on a roll because the country's rapid economic ascent. Issues from these two countries have outpaced the index as a whole since the Asia300 publicly debuted in December.
As for the rate of increase in market capitalization, Taiwanese and South Korean smartphone-related issues have fared particularly well since December. TPK Holding, a major touch panel producer in Taiwan, has been the top issue in terms of market cap expansion rate. Expectations are mounting for TPK to provide more parts to Apple (it already supplies the U.S. company with panels).
TPK's stock price has climbed 49% since December. The issue has been heavily bought on anticipation that TPK will benefit from Apple's expected release, possibly this autumn, of new iPhone models.
TPK, which has struggled in a price war against Chinese rivals, in March announced that it had decided to enter into an equity tie-up with a Chinese counterpart. As its orders are now recovering, the company expects to post a net profit for 2017 -- its first in three years.
Among other Taiwanese companies, the stock price of Largan Precision, the world's largest maker of optical lenses for smartphones, has gone up 30%. Last year, more high-end smartphones began coming with two types of lenses. The resultant increase in demand for lenses is expected to boost the company's business results. The popularity of Largan Precision shares can also be attributed to the company's 50% or so net profit-to-sales ratio. This is the result of Largan Precision's technological prowess, which has kept the company out of price wars.
In South Korea, the stock price of Samsung SDI, a leading maker of lithium ion batteries, has risen 44%. The company supplied the fire-prone batteries for Samsung Electronics' Galaxy Note 7 smartphones. The hefty costs that it incurred as a result plunged the company into an operating loss for 2016.
However, after Samsung Electronics in January announced the results of a probe into the cause of the fires, concerns about the quality of Samsung SDI's batteries began to ease. The stock price has been recovering. Investors are also paying attention to the company's future prospects for electric vehicle-use batteries.
As millions of Asians move into the middle class, more of them are developing a hankering for overseas vacations. As a result, budget airlines have plump market caps.
In addition, with Asians doing a lot of internet shopping, the stock prices of companies that help people get products at home are ballooning.
Global Logistic Properties (GLP) -- a major Singaporean facilities operator with large warehouses in Japan, the U.S. and China -- has seen its share price gain ground. The company recorded its largest-ever profit in the year through March on the back of higher warehouse rents and the opening of new facilities in China.
Besides the thriving logistics business, speculation has been rife that Global Logistics Properties may be taken over. The rumors have been a boon to the company's stock price. And management is indeed examining acquisition proposals from a number of suitors, company sources said.