American business magazine Forbes has named its top-200 publicly traded companies in the Asia-Pacific region, with revenues less than $1 billion. The list has 84 nominees from mainland China and the investment hub of Hong Kong, while Australia has just 9 nominees.
Forbes says it screened 17,000 companies to compile the list and that the winners produced the highest sales and earnings per share growth for the most recent financial one and three-year periods. The winners also posted the strongest five-year average return on equity, while other key metrics like debt, profitability, management and liquidity were taken into account.
The most popular sector was information technology, with hardware and software companies shining, while consumer and household goods also performed strongly.
In alphabetical order, let's take a look at Forbes' nine ASX nominees as among the top 200 best junior companies in Asia.
Ainsworth Game Technology Limited (ASX: AGI) is the founder-driven gaming machine business that is using its technological expertise to sell its high-tech gaming machines into large markets like the US. In this business having the best technology to consistently lure and then fleece the "VIP gamers" is a competitive advantage that drives sales. As long as Ainsworth maintains this advantage over the competition it looks to remain a long-term grower.
Capitol Health Limited (ASX: CAJ) also has one of its acquisition's founder's leading the company and is a healthcare business that has employed an acquisitive growth strategy mainly in Victoria. The ageing population and ever-increasing healthcare spends are two powerful tailwinds for common diagnostic imaging and radiology services like X-rays and ultrasound, which the business provides. Capitol Health is well managed, with geographic expansion plans and at 61 cents is trading around a level it has found buyer support at recently.
Corporate Travel Management Ltd (ASX: CTD) is a founder-led corporate travel business that specialises in helping corporate clients save money by efficient travel management administration. The group is forecasting earnings growth of 25%-30% this financial year and its geographic expansion makes it another growth business to watch. Selling for $10.45 it looks good value given the forecast growth and its habit of surprising on the upside.
G8 Education Ltd (ASX: GEM) is a childcare centre aggregator that has grown rapidly by buying hundreds of childcare centres to operate in a fragmented national market. The business also currently pays a cracking 7.5% annualised dividend after some recent market and business-related wobbles.
Magellan Financial Group Ltd (ASX: MFG) is another founder-led business in the international funds management space. It has a healthy balance sheet, an excellent investment track record and strong distribution and institutional business development channels. The company also enjoys the tailwind of increased demand for international equities and has a bright future in my opinion. Selling for $17.72 it looks excellent value.
My Net Fone Limited (ASX: MNF) is also a founder-led business that primarily operates in the voice over internet space providing wholesale voice networks to public and private sector organisations. The group has also been expanding by acquisition and appears to be carving out a niche for itself in Australia's competitive telco sector. As it gains scale it will likely de-risk and remains one for the future on a reasonable valuation at $3.09.
REA Group Limited (ASX: REA) operates the realestate.com.au website for property renters, buyers and sellers. It enjoys high margins and a network effect as its popularity attracts the most buyers and sellers meaning it can charge premium prices for its services. It's also investing in overseas websites to try and replicate its domestic success in potentially lucrative international markets. Selling for $40 it looks good value.
Sirtex Medical Limited (ASX: SRX) is a healthcare business that sells a radioactive therapy to treat liver cancer. It has posted strong sales growth thanks to increased global awareness among oncologists of the effectiveness of the therapy. Selling for $33.50 it's probably around fair value, although as a largely one-trick pony it's high up the risk curve.
Webjet Limited (ASX: WEB) is the online travel booking business that operates multiple hotel and flight booking websites like Zuji and Lots of Hotels along with its eponymous Australian website. The group has a healthy balance sheet, strong cash flows, high margins and a decent outlook – no surprise Forbes has identified it as one of Australia's best small companies.
No surprise either that The Motley Fool has also identified many of the above businesses as worth owning, but The Motley Fool identified most of them many moons ago and the big gains have probably already been made.
The key to eye-watering capital gains is finding the Forbes list nominees of tomorrow not today!
