Asia's Champions

Our annual ranking of the continent's best-performing companies reflects the strength of tech and energy, Japan's revival, and more

by Brian Bremner

Think Big Oil, and the likes of Exxon Mobil (XOM), Chevron (CVX), and BP (BP) usually spring to mind. Yet Asian companies such as PetroChina (PTR), India's Oil & Natural Gas, and PTT of Thailand may well break into the global energy aristocracy in the future.

True, all three are enjoying windfall profits thanks to $60-to-$70-plus oil prices over the past year. Yet their real edge is that they operate in some of the fastest-growing economies on the planet—and in a region with a ravenous appetite for oil and natural gas.

These Asia energy champs have impressed global investors with their forward thinking. They are using their cash hoards to buy or explore for new oil and gas assets at home and in far-flung locales ranging from Oman to Venezuela.

PetroChina has delivered three-year shareholder returns of nearly 250% to investors who grasped this fact early on, including fabled stock-picker Warren Buffett. The billionaire investor started buying shares in the Chinese company back in 2003 and now holds a 3% stake valued at more than $5.8 billion.

PetroChina's shares traded in Hong Kong are up nearly 40% this year. The mainland's biggest energy exploration and production outfit saw net profits soar 29.4%, to more than $10 billion, in the first half of 2006, on $40.8 billion in revenues. It has oil and gas assets in Kazakhstan, Algeria, Oman, and Niger, but what really jazzed investors were PetroChina's gas discoveries at home last year in the Songliao Basin in the northeast and the Sichuan Basin in the western province of Sichuan.

These discoveries helped boost production by 30.8% over the same period in 2005. Oil production increased 6.8%—well above the company's 5% target. "Management said they would do something and they delivered," says David Hurd, managing director and head of Asian oil & gas research, Deutsche Bank.

TECH DOMINANCE.

That kind of execution, share performance, and laser focus on future growth landed PetroChina at the top of BusinessWeek's second annual ranking of Asia's best-performing publicly listed companies. An additional six of the region's oil, gas, and energy-related companies made it onto BW's Asia 50 for much the same reasons. India's Oil & Natural Gas (No. 33), which nailed a one-year total shareholder return of 28.6%, on Sept. 10 won permission to drill for crude in Cuba.

Meanwhile, CEO Prasert Bunsumpun has transformed Thailand's state-controlled oil, gas, and chemicals concern PTT (No. 20). Now an integrated global player with operations in Iran, Burma, and Vietnam, it is one of the region's biggest refiners.

Its $17 billion market capitalization makes it the biggest company on the Bangkok Stock Exchange. "High oil prices and strong economic growth are just one part of our story," says Prasert. "Over the past three years, we have been able to reengineer the company, make opportunistic acquisitions, and put new growth drivers in place." PTT now benchmarks itself against the global giants.

Asia high tech—consumer electronics makers, telcos, and information technology outsourcing players—dominates this year's list as an industry, occupying more than 10 of the 50 slots.

One standout, and No. 4 on our list, is Taiwan's High Tech Computer (HTCCY). The world's biggest maker of Windows-run smart phones for such operators as Cingular, Sprint Nextel (S), and Vodafone (VOD) earned mouth-watering shareholder returns of nearly 1,300% over the past three years. Under CEO Peter Chou, it is now promoting a brand of its own after buying Taiwan's Dopod, which sells smart phones and wireless personal digital assistants in Asia.