Emerging markets 1Q24 earnings review
Bloomberg Intelligence
This analysis is by Bloomberg Intelligence Senior Industry Analyst Marvin Chen, with contributing analysis by Sufianti Sufianti. It appeared first on the Bloomberg Terminal.
Moderately positive earnings surprises may be enough to keep MSCI EM on track to deliver double-digit aggregate earnings growth this year after roughly 80% of members reported 1Q profit, with overall results topping consensus. Growth and earnings revisions have ticked up as the season closes, with South Korea leading revisions higher while China’s negative outlook appears to be easing.
China tech earnings stand out amid lackluster results
China’s tech and e-commerce earnings continue to stand out in terms of growth in 1Q24, in part due to cost-cutting, while the broader market is still showing earnings contractions compared with a year ago. Tencent profit rose 62% in 1Q, beating consensus expectations and driving estimates for full-year earnings higher by more than 5 percentage points. Baidu and JD.com also surpassed estimates, with the latter seeing moderately stronger upward revisions. Alibaba’s performance was mixed, with revenue topping 1Q consensus, but EPS falling short.
Overall MSCI China is tracking a 3.1% contraction in 1Q earnings from a year ago, with consensus estimates for full-year growth of around 12.3%, down from more than 15% at the beginning of 2024. That’s still higher than the 10% estimate in our model.
MSCI China 1Q24 Earnings Growth Estimates
Price reactions to earnings surprises
Price reactions to emerging-market 1Q earnings have been relatively balanced, with stocks rising and falling by 1.2% and 0.9% respectively on average to beats and misses, suggesting company fundamentals remain in focus. Shortfalls have prompted bigger reactions than business outperformance for Taiwan, India, EMEA and Latin America, while the opposite is true for the rest. Latin America saw the largest gap in performance, with stocks of companies beating expectations rising 1.4% on average while those missing falling 0.9%. A notable divergence was observed in Southeast Asia, with a net gain of 1.4% for companies surpassing expectations, while shortfalls were barely punished. Better-than-expected results have received a cool reception in India, with beats only rewarded by a 0.3% gain.
MSCI EM 1Q24 Earnings Season: Price Reaction
Growth expectation bottoming out as earnings season wraps up
MSCI EM: 2024 Earnings Growth Estimates
Tech the bright spot amid China’s mixed 1Q result
MSCI China 1Q24 Earnings Season
Korean tech earnings lead the way higher
MSCI Korea 1Q24 Earnings Season
63% of MSCI Taiwan Index members beat expectations
MSCI Taiwan 1Q24 Earnings Season
Financials, IT shine in India; Consumer staples struggle
MSCI India 1Q24 Earnings Season
Thailand sets performance pace in Southeast Asia
MSCI EFM Asean 1Q24 Earnings Season
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