Indian families are champions of business as half of the family-owned companies feature in Asia Pacific top 30 of the best performing firms, excluding Japan, says a report.
Indian families are champions of business as half of the family-owned companies feature in Asia Pacific top 30 of the best performing firms, excluding Japan, says a report. According to the ‘Credit Suisse Family 1000 in 2018’ report, in the Non-Japan Asia, more than 50% of the top 30 best-performing companies are from India, followed by one-third from China while Malaysia occupies third place with three companies. The Credit Suisse Research Institute (CSRI) has analysed the database of over 1,000 family-owned, publicly-listed companies.
As much as 11 markets in the Non-Japan Asia region continue to dominate and represent a 53% share of the universe, with a total market capitalization of over $4 trillion. China continues to top the chart globally with a total of 159 companies and $1.38 trillion in total market capitalization, with the highest representation in terms of number of family-owned companies, followed closely by the US with 121 companies and India with 111 companies, the report said.
As far as the stock market performance is concerned, the Asian family-owned businesses achieved an impressive 31.5% over the 10-year period, compared to 16.6% achieved by European peers and 9.2% by North American peers. The above chart shows that Indian family-owned listed companies have the third-highest share price return since 2006 years in Asia Pacific excluding Japan.
Asia-based family-owned companies have generated much higher returns than their global peers, with annual average revenue growth of 19.5% over the past 10 years, compared to 6.3% in North America and 7.4% in Europe. The superior financial performance and more robust share price returns is largely due to their longer-term focus, the report added.
The financial performance of family-owned companies is superior to that of non-family-owned businesses as the revenue growth is stronger, earnings before interest, tax, depreciation and amortization (EBITDA) margins are higher, cash flow returns are better and gearing is lower, the report said.
The analysis was based on metrics such as size, sector, region, financial and share price performance over 10 years performance of a control group consisting of more than 7,000 non-family owned companies globally.