Today I am championing three top-tier emerging market players.
Ring up a fortune
Much has been made of Vodafone’s (LSE: VOD) performance improvement in Europe, and with good reason — the company sources two-thirds of total revenues from this region. But investors should not overlook the increasing contribution the firm’s Africa, Middle East and Asia Pacific (or AMAP) territory is making.
Indeed, Vodafone saw organic service revenues in this marketplace surge 6.4% between April and September, and customer numbers swelled by 8.9 million to more than 330 million. In particular, Vodafone’s Project Spring investment scheme has worked wonders in addressing ‘rapid’ data demand growth in these regions — the number of 3G customers in India surged 75% in the first half, to 23.8 million, and Vodafone plans to roll out 4G in the country in the next few months.
As well as boosting its position in the core telecoms arena, Vodafone is also spreading its wings in the mobile money sector. The company announced today it was expanding its hugely-successful, Africa-focussed M-Pesa service into Ghana. This division saw transactions leap 26% in April-September, to more than 2 billion.
Vodafone clearly sees emerging markets as a key lever for future earnings growth. With the Newbury firm aggressively modernising and expanding its operations, I fully expect sales to head higher along with stampeding consumer spending power in these ‘new’ regions.
Scrubbing up a treat
I believe household goods giant PZ Cussons’ (LSE: PZC) focus on Asia, Africa and Australasia also makes it a terrific long-term stock selection. The problem of adverse exchange rates is likely to remain a problem for some time longer, but the company can rely on its stable of market-leading products — from Imperial Leather soap and shower gels to five:AM organic foods — to keep revenues edging higher.
Indeed, the exceptional pricing power of such labels is allowing the firm to traverse economic cooling in its far-flung territories, and a steady trend of product roll-outs should keep the top-line chugging higher.
Healthcare play Hutchison China Meditech (LSE: HCM), or ‘Chi-Med’ as it is better known, has grand ambitions to become the largest drugs manufacturer in the white-hot Chinese marketplace, making it worthy of more than a cursory glance from growth hunters in my opinion.
With patent protection having been secured for its sales-driving SXBXP cardiovascular drug up until 2029, Chi-Med is now hunkering down on bringing its bubbly product pipeline to fruition.
The Cayman Islands business announced last month that Phase I testing had commenced on its sulfatinib oncology drug in the US. And this followed news that its HMPL‑523 therapy — used to treat spleen tyrosine kinase — was about to enter Phase II trials.
As healthcare investment ratchets higher across China and South-East Asia, I reckon Chi-Med could be set to enjoy smashing revenues growth in the years ahead.