Accounting firm Deloitte has just published a wide-ranging research report incorporating interviews with hundreds of Asia Pacific CEOs (including Japan, India and Australia). Deloitte global managing partner Igal Brightman says the findings indicate strong growth prospects in technology, media and telecommunications for the region.
"The TMT sector has been asleep for a few years, but there are signs that it's ready to take off again," he comments.
The Asia Pacific survey forms part of a yearly global report, including North America, Europe and the Middle East and Africa. The current report is the fourth in the series.
Parallel to the ranking report is the Fast 500 Asia Pacific CEO survey 2005. Business confidence over the next 12 months for the Asia-Pac region ranks as the highest world-wide. Indeed, the confidence figure is the highest ever recorded in the Deloitte survey for the region.
The biggest business challenge cited is recruitment and retention of staff. "This is a change from the last survey, which put sales figures at the top of the concern rankings," Brightman adds.
Another indication that growth prospects are strong is evidenced in the second major problem cited by regional managers - how to access enough capital. "You can only grow if you have enough capital," Brightman points out.
Concerns over the emergence of China and India are also a major worry, but the level is down on previous years. "Companies now understand how they can use China and India as manufacturing and software outsourcing platforms for their own good," Brightman says.
Some of the companies have shown extraordinary revenue growth from the past three years, and not necessarily from a low base. The winner is Power Digital Card Company, a memory device manufacturer, which has seen revenue growth of 31,980% over the past three years.
The company is about to be listed in Taiwan and was founded in 1998. It has 100 employees.
In second place is Kong Zhong, a Nasdaq-listed wireless interactive entertainment company, which has recorded revenue growth of 23,849%. Kong Zhong is more of a start up, incorporated in 2002 and listed in 2004.
The top five companies in the region have averaged growth of 14,210%, while the top 50 companies average 2,858%. For the top 500 companies, the figure drops to 518%.
In terms of companies ranked by country, Korea and Taiwan jointly take the crown. Together they comprise 20% of the companies ranked in the survey.
China, Japan and India come in third, fourth and fifth place respectively. Singapore sits at the bottom of the barrel, with just 1.6% of companies in the survey from the city state.
In terms of industry sector, semiconductors, components and electronics come top on 22.6%, followed by software, communications/networking and the internet on 20.2%, 18.6% and 15.8% respectively. An interesting division of labour is showing up across the region.
Japan takes the lead in internet and biotech/pharmaceuticals; Korea in communications/networking; Taiwan in semiconductor, components and electronics; and India in software. The historically unparalleled spread of the internet and wireless communications in China in India makes the region 'a laboratory for such technologies," says Brightman.
However, investors should be wary about regarding the listing as a reliable stock picking guide, say observers. In order to enable comparisons over different accounting regimes, revenue were figures were used, not profitability figures.
As one analyst points out, the lack of proven profitability, despite climbing revenues and other metrics specially invented for the internet, proved to be the undoing of the TMT sector in the great tech crash of 2002.