Asia-Pacific Strategy_ CY4Q_2H24 earnings monitor

Summary of Asia-Pacific Strategy: CY4Q/2H24 Earnings Monitor Industry Overview - The report focuses on the Asia-Pacific region, specifically the MXAPJ index, which includes 510 companies representing 67% of the index's market capitalization [1][5]. Key Financial Metrics - Actual CY24 earnings are tracking at 97% of full-year estimates according to Bloomberg consensus [1]. - CY4Q24 profits grew by 11% year-over-year (YoY) but decreased by 17% quarter-over-quarter (QoQ) [1]. - For the full year CY2024, profits are expected to increase by 18% YoY [1]. Revenue and Margin Analysis - Excluding financials, CY4Q24 revenues increased by 16% YoY and 2% QoQ, with a net margin increase of 70 basis points (bps) compared to 4Q23, but a decrease of 210 bps compared to 3Q24 [2]. - For CY24, revenues are projected to grow by 9% YoY, with a net margin increase of 170 bps compared to CY23 [2]. Earnings Surprises and Market Performance - Among the companies that reported CY4Q24 results, 30% beat consensus estimates, 24% were in line, and 46% missed, with a median earnings surprise of -4% [2][8]. - Markets performing above historical averages include China and Singapore, while Thailand, Korea, and China A are tracking below historical averages [2]. Sector Performance - Sectors with results tracking below historical averages include Materials, Consumer Staples, Energy, and Industrials [2]. - Notable sector performance includes: - Communication Services and Industrials showing the most positive surprises [8]. - Energy, Consumer Discretionary, and Utilities showing the least positive surprises [8]. Earnings Revisions - Since the start of the quarter, MXAPJ 2025E earnings have been revised down by 1.8%, primarily due to underperformance in Korea and Indonesia, as well as the Materials, Info Tech, and Energy sectors [10]. - Conversely, earnings for Taiwan and Singapore markets have been revised upward [10]. Conclusion - The earnings monitor indicates a mixed performance across the Asia-Pacific region, with certain markets and sectors outperforming while others lag behind historical averages. Investors should consider these dynamics when making investment decisions in the region [4][29].