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5 Asian Companies to Ring in 2021

Stocks with high return on capital and performance in 2020

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James Li
Dec 31, 2020
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As people in Asia begin ringing in 2021, five Asian companies with high financial strength, profitability and 10-year median return on capital that have outperformed the Standard & Poor's 500 Index in 2020 are Baidu Inc. (

BIDU, Financial), NetEase Inc. (NTES, Financial)(HKSE:09999, Financial), Sogou Inc. (SOGO, Financial), Taiwan Semiconductor Manufacturing Co. Ltd. (TSM, Financial)(TPE:2330, Financial) and JOYY Inc. (YY, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.

Asian markets finish 2020 strong

The CSI 300 index, which tracks the performance of the top 300 stocks on the Shanghai and Shenzhen stock exchanges, soared approximately 27% during 2020, with the Shenzhen component gaining over 38% according to CNBC calculations. CNBC added that Jim McCaffrey, joint head of Asia-Pacific equity research at Nomura, said global investors "may favor stocks" in Asian countries like China and Taiwan.

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As such, investors may find opportunities in companies headquartered in China and Taiwan that have outperformed the S&P 500 over the past year. GuruFocus' All-in-One Screener identified five stocks with a financial strength rank of at least 6, a profitability rank of at least 7, a 10-year median return on capital of at least 18% and a outperformance of at least 20% over 2020.

The following video discusses how to access the Screener using GuruFocus' search bar and how to construct user-defined value screens.

Baidu

Shares of Baidu traded around $215.03 on Thursday, outperforming the S&P 500 benchmark over the past year by 58.16%.

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GuruFocus ranks the Beijing-based online media company's profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and a net margin that outperforms over 80% of global competitors.

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Gurus with large holdings in Baidu include

PRIMECAP Management (Trades, Portfolio), Jim Simons (Trades, Portfolio)' Renaissance Technologies, Dodge & Cox and Sarah Ketterer (Trades, Portfolio).

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NetEase

Shares of NetEase traded around $95.06, outperforming the S&P 500 benchmark over the past year by approximately 42.33%.

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GuruFocus ranks the Hangzhou, Zhejiang-based online service provider's profitability 10 out of 10 on several positive investing signs, which include a five-star business predictability rank and profit margins and returns outperforming over 78% of global competitors.

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NetEase's financial strength ranks 8 out of 10 on the heels of a strong Altman Z-score of 6 and a Beneish M-score that suggests little or no earnings manipulation: A safe Beneish M-score is any M-score less than -1.78.

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Sogou

Shares of Sogou traded around $8.20, outperforming the S&P 500 benchmark over the past year by approximately 63.74%.

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The Beijing-based company operates a Chinese language input software for both mobile and personal computers. GuruFocus ranks Sogou's financial strength 9 out of 10 on several positive investing signs, which include no long-term debt, a strong Altman Z-score of 5.53 and a safe Beneish M-score of -2.70.

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Taiwan Semiconductor

Shares of Taiwan Semiconductor traded around $109.07, outperforming the S&P 500 over the past year by approximately 74.79%.

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GuruFocus ranks the Taiwanese semiconductor company's profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8, consistent revenue growth and profit margins and returns that are outperforming over 96% of global competitors.

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JOYY

Shares of JOYY traded around $79.10, outperforming the S&P 500 benchmark over the past year by approximately 38%.

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GuruFocus ranks the Guangzhou, Guangdong-based social media company's profitability 8 out of 10 on the back of net margins and returns outperforming over 85% of global competitors.

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Disclosure: No positions.

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