Inflation, rising cost of living, and geopolitical tensions have prompted Asia’s top executives to take a more cautious approach.
Take Auttapol Rerkpiboon, the top-rated executive in the oil and gas sector in Institutional Investor’s 2022 All-Asia Executive Team. His company PTT is based in Thailand, where the rise in energy and food prices has driven inflation up to 7.1 percent year-on-year as of May 2022, the highest level in nearly 14 years. Rerkpiboon said that while PTT, a national petroleum exploration and production company, is looking for new markets, the challenge of inflation means they are studying potential new projects more thoroughly before going ahead “to ensure that the investment will yield appropriate return at appropriate time and also fit to long-term strategy.” The firm is seeking “more opportunities in both domestic and overseas [markets] while the energy market is [in] an uptrend,” Rerkpiboon told II.
Likewise Hongbin Zhou, the top-rated chief executive in the property sector, said that his company is taking a more “intelligent” approach to investing, improving efficiency as they try to grow the company to ten times its current size in just five years. Zhou heads up property management company CIFI Ever Sunshine Services, which manages residential and non-residential properties, including sales assistance, housing repair, and pre-delivery inspection across China. Increasing labor costs are the main risk from inflation, Zhou said, as the business is in the service industry. “Regarding that, we think the increase of staff wages each period is fair and reasonable,” Zhou said. “Nevertheless, due to the weak macro-economic environment as well as Covid-19, the increasing unemployment rate increased supply in the labor market, relieving increases in wages in the short term.”
Zhou is more concerned by the Chinese government’s crackdown on speculation in the property market, which analysts say will benefit property management companies at the expense of developers. “The reshuffle in [the] real estate industry will indeed challenge the independence of [property management services],” Zhou said. “As for us, Cifi and Ever Sunshine [have always been] two independent listed companies with independent corporate governance and compliance.”
For Rerkpiboon, it’s the energy crisis that’s keeping him up at night. “PTT, as a national oil company, has played an important role to ensure supply for Thailand’s energy security, stabilize the volatility of energy prices, and drive national economic growth,” he said. PTT is prepared to increase both crude and refined oil supplies as needed, Rerkpiboon said, coordinating with international partners to secure more crude oil than normal.
Nonetheless, the company is rapidly diversifying, with investments in cleaner energy sources, infrastructure for electric cars, pharmaceuticals, and peer-to-peer energy trading using blockchain. “Energy crises in the past as well as a significant increase in energy prices are the key factors for businesses to reduce dependence on fossil fuels and accelerate the clean energy transition,” Rerkpiboon said. “Oil and gas companies worldwide, including PTT, have to adjust their strategies [to] adapt to changes.”
To determine the members of Institutional Investor’s 2022 Asia (ex-Japan) Executive Team, we surveyed buy-side analysts, money managers and sell-side researchers at securities firms and financial institutions that cover the region, including those who cast and received votes in this year’s 2022 All-Asia Research Team survey. Survey results reflect the opinions from 4,854 investment professionals at 1,612 financial services firms.
We asked the participants to rate the chief executive officers, chief financial officers and investor relations professionals at the companies in their coverage universes. CEOs were rated on their credibility, leadership and communication. CFOs were rated on their ability in capital allocation, financial stewardship and communication. For the Investor Relations programs, companies were rated on the following attributes: roadshows/conferences/meetings; IR team authority and credibility; accessibility of senior execs; responsiveness; earnings calls, business and market knowledge, timeliness of disclosure; and consistency and granularity of disclosure. Additionally, companies were rated on the following ESG attributes: corporate ESG strategy; ESG engagement; and ESG disclosure. All votes are weighted by rating (five being excellent; one being average) and attributes within each category were aggregated to create the CEO, CFO, IR Professional, IR Program and ESG rankings.
The Overall rankings in each of the categories — CEO, CFO, IR Professional, IR Company, ESG — are based on combined buy- and sell-side votes. Separate rosters (buy side, sell side) are also available for each award classification.
Derived from our 2022 Asia (ex-Japan) Executive Team, firms are recognized in the Mainland China and Rest of Asia rankings. Using the same method as above, companies are ranked within their respective region to create two separate rankings. The Small & Mid-Cap results include all companies with less than $10B in market capitalization.
Honored Companies are companies who achieved at least one published position. To earn the designation of Most Honored Company, a company must achieve a weighted score of 15 or more points across the five categories in the combined, buy-side and sell-side rankings, wherein each first-place position is worth three points; second place, two; and third place, one.
To be eligible for inclusion on the 2022 All-Asia (ex-Japan) Executive Team, a company must be headquartered in Asia. We keep confidential the identities of the survey respondents to ensure their continuing cooperation. Voters must meet eligibility requirements, and winners must achieve a minimum vote count. All ballots are subject to review by our Research Operations Group.