Business & Investment

the questions for Asian business in 2021 –

TOKYO — A new year does not mean the end of some of the issues that grabbed the attention of Asia’s business leaders and entrepreneurs in 2020.

The coronavirus pandemic has not interrupted intense debates over deal making, corporate strategy, industry disruption or succession planning. Nor does it stop consideration of one of the most obvious questions for investors — what offers the best chance of making money over the next 12 months?

Asking our writers to consider some of these issues and give their verdicts might be a little unfair. After all, not many of us would have predicted what turned out to be the biggest global issue of 2020, the coronavirus pandemic.

But these are certainly some of the issues we do expect to be covering in detail in Nikkei Asia in 2021 — and perhaps some of the conclusions here may at least make interesting rereading come December.

Will there be an Ant Group IPO?

Ant Group’s initial public offering was eagerly awaited before being suspended at virtually the last minute in 2020 — and a revival in 2021 seems unlikely.
  © Reuters

The chance of Jack Ma’s Ant Group reviving its initial public offering in 2021, after Chinese authorities torpedoed it at the last minute in November, is at best slim.

The Alibaba Group Holding offshoot, which was aiming for a $39.6 billion IPO in Shanghai and Hong Kong, has been told by regulators to pull back from its higher margin credit, insurance and wealth management operations. They want Ant to set up a separate holding company to ensure capital adequacy and regulatory compliance and become a fully licensed financial institution.

Ant will have to formulate plans to comply and submit them for regulatory review. Bankers and investors said the IPO may even get pushed out to 2022.

Ant, which declined to comment, will likely have to restart the application process and seek Chinese regulatory approval again — where the outcome would be far from certain.

Some think it was Ma’s criticism of regulators, when he likened China’s financial system to a “pawnshop,” that set in motion the chain of events that led to the cancellation of what would have been the world’s largest IPO.

Ma has since kept his head down. But the change in China’s financial regulatory environment, and Beijing’s determination to rein in the power of internet giants, means an Ant IPO is not likely in the coming year — and even it if did happen, analysts have already cut Ant’s valuation to below $200 billion from the previous $320 billion IPO estimate.

Narayanan Somasundaram, Hong Kong

How smart will cars be?

For almost as long as there have been cars, self-driving vehicles have been part dream, part science fiction — but the era now seems at hand.

In 2021, we will see carmakers launching new models with more advanced autonomous driving functions, and companies such as Google and Baidu testing driverless “robotaxis” at much larger scale.

In commercializing autonomous driving technology, Japan is leading. Honda Motor is set to launch the world’s first “level 3” car by March, which allows the vehicle to drive itself in congested highways. The technology was approved by the country’s land ministry in November.

In China, front-runners like Baidu,, WeRide, AutoX and Didi Chuxing have all launched robotaxi services to the public — though a safety driver is still needed in the vehicle. However, as Beijing granted Baidu the first permit to test fully autonomous cars on open roads in December, the safety driver could be removed in more companies’ pilot schemes.

In the U.S., which has the most advanced autonomous driving technology, some restructuring will take place. Ride-hailing giant Uber Technologies will be selling its autonomous vehicle unit, which was set back after a deadly crash in Arizona in 2018.

Nikki Sun, Hong Kong, and Eri Sugiura, Tokyo

Will Grab and Gojek merge?

Grab and Gojek have been fierce rivals but talk of a merger is now heating up. (Photo by Ken Kobayashi) 

It is a favorite story of Korean TV dramas: The two meet, they fight, but after several dramatic twists, they realize that — just maybe — they are meant to be together. The relationship between Gojek and Grab, Southeast Asia’s two super app providers, seems to be hitting all the familiar beats. But is there a happily ever after in their future?

Their respective investors have been pushing for the two companies to merge, perhaps entertaining visions of a blockbuster IPO after seeing the demand this past year for shares in Singapore’s Sea, the other big name in regional digital commerce. Continued business disruption from COVID-19 — which has hit Grab and Gojek’s core ride hailing operations particularly hard — could provide further incentive for the two titans to join forces.

Should they decide to merge, they can expect pushback from antitrust regulators in their biggest market of Indonesia, where they dominate ride hailing, food delivery and digital payments. But even here they may have an ace up their sleeve — Gojek’s president commissioner is a prominent businessman whose brother serves as the nation’s minster for state-owned enterprises.

2021 could be the year Gojek and Grab, like so many K-drama couples before them, decide to tie the knot.

Shotaro Tani, Jakarta

Will Masayoshi Son take SoftBank private?

Masayoshi Son, the SoftBank Group founder, is renowned for placing big financial bets — but buying out his own company would be the biggest yet. Most analysts think the chances of its happening are slim, but Son has a track record of defying expectations.

The rumor mill is heating up because SoftBank has continued to offload assets even after hitting its goal of raising 4.5 trillion yen ($43.6 billion), a plan announced in March to revive investor confidence. The latest sale was Boston Dynamics, a U.S. robot maker that generated 12 million views for one of its YouTube videos but only $2 million in revenue for its last fiscal year.

Among the strategies being floated is letting SoftBank buy back its own shares until Son’s stake rises from its current 27% to more than two-thirds, after which Son will have more power to “squeeze out” remaining shareholders. That process could require more than 10 trillion yen, analysts estimate. Raising that capital is a daunting task. But Son’s willingness to take risk has created the world’s biggest venture capital fund, as well as one of the most indebted companies.

Wataru Suzuki, Tokyo

Will Lee Jae-yong finally become chairman of Samsung?

Lee Jae-yong’s legal problems are a possible barrier to the chairmanship of Samsung Electronics.
  © AP

An era ended for Samsung Electronics when its long-serving chairman Lee Kun-hee died this past October after more than six years in the hospital. Is it finally time, then, for his son Lee Jae-yong to be promoted to the top job at South Korea’s most famous company?

The answer is that the path for Lee — who retains the title of vice chairman — remains full of legal obstacles.

The first relates to his 2017 conviction for bribing ousted South Korean President Park Geun-hye. Lee served 12 months in jail, but the Supreme Court is reviewing whether that sentence was too lenient. Lee also faces charges of accounting fraud and stock manipulation at Samsung group companies, in a trial that began at a Seoul district court in October. In both cases, Lee faces the possibility of a lengthy prison sentence.

It would be a severe slight to Lee if he were not promoted, given the tradition of father-to-son succession among South Korea’s family-controlled chaebol business groups. Consider the case of Chung Euisun, who in October became chairman of Hyundai Motor Group, the country’s largest automaker — even though his father Chung Mong-koo is still alive.

Ultimately, though, the issue may do little to stop Lee from controlling South Korea’s largest conglomerate. He is the largest shareholder in Samsung C&T, through which he controls Samsung Life Insurance — the largest shareholder in Samsung Electronics.

Kim Jaewon, Seoul

Will Asia’s challenger airlines thrive?

The prospect for airlines in 2021 are dim after the coronavirus pandemic plunged them into an unprecedented crisis — but some audacious carriers are taking the chance to try to steal a march on their battered rivals.

Hong Kong startup Greater Bay Airlines, which was founded by a Chinese property tycoon and applied for an air operator’s certificate in July, is recruiting and searching for its first aircraft at a time when the larger incumbent Cathay Pacific Airways is cutting nearly a quarter of the group’s workforce.

In Australia, Regional Express, operator of a small fleet of turboprops, has expanded into Boeing 737s to start the Sydney-Melbourne route in March, trying to challenge Qantas Airways, Virgin Australia and Jetstar Airways.

Their path to expansion is filled with uncertainty. Some incumbent local flag carriers as well as large budget carriers may be wounded — but they remain a major force of each market. Still, the challengers may never get a better time to make their mark, as rivals cope with the biggest financial disaster in their history and the world slowly emerges from the coronavirus pandemic.

Eri Sugiura, Tokyo

Can Huawei survive in 2021?

Washington’s crackdown on Huawei Technologies has taken a heavy toll on the Chinese tech giant, but the company is far from beaten.

For one, it still has stockpiles of chips and other materials it built up over the course of 2020 to counter U.S. trade restrictions. Key suppliers including Qualcomm and Sony, moreover, have received licenses to resume some business with Huawei, promising some relief for 2021.

But the smartphone and telecom equipment maker has an even bigger ace in the hole: Beijing’s unwavering support.

The Chinese government is committed to fostering a full-fledged domestic tech industry, and Huawei is key to that dream. It is not only China’s biggest tech company but also its most important provider of 5G telecom base stations, the foundation for China’s deployment of the next-generation wireless technology.

This makes the company’s survival a matter of national importance — and Beijing will hardly stand by as Washington attempts to crush its champion.

Cheng Ting-fang, Taipei

Will gold or Bitcoin prove the better bet?


Gold and Bitcoin prices both hit record highs in 2020 amid uncertainties over the pandemic. But with widespread vaccine rollouts on the horizon, which one will best sustain that momentum in 2021?

Gold rose 23% in 2020, and though it is unlikely to repeat such a sizzling performance this year, the metal looks hard to beat as a safe-haven asset.

While vaccines might reduce pandemic-related uncertainties, they will do little to alleviate the yawning U.S. budget deficit, which ballooned as the government poured money into coronavirus countermeasures. This, many analysts say, means the dollar will remain weak, which will in turn support gold prices.

Asian consumers are also expected to pour back into the gold market after demand slumped in 2020, further supporting prices.

While gold has stability and liquidity on its side, Bitcoin — little more than a decade old — has growth potential on its side. The cryptocurrency trebled in value in 2020 and could rise further, despite lingering questions over its suitability as a store of value.

In a win for the digital asset, PayPal began offering Bitcoin trading services in October to help increase its liquidity.

“Although gold has more stability as a safe-haven asset, Bitcoin has the possibility of expanding its market in the long run,” said Miyoko Nakashima, a strategist at Mizuho Securities.

Rurika Imahashi, Tokyo

Will supply chain decoupling continue?

The election of Joe Biden as U.S. president is unlikely to end the drive to decouple global supply chains.
  © Reuters

The U.S. and China have spent the past two years attempting to untangle their tech supply chains, and 2021 will only make the decoupling deeper.

One reason is that tech suppliers have already started to diversify production away from China, a major undertaking given the razor-thin margins in the industry. Their biggest clients — the likes of Apple, Google, Microsoft and Sony — have endorsed these plans, and asking them to drop them midstream would not be realistic.

On top of political headwinds, the coronavirus pandemic has also driven home the dangers of overconcentrating production in one country. Some suppliers are expanding into Southeast Asia and India, while others are repatriating production to Taiwan or Japan.

A complete break is unlikely: China is still a key production base and has one of the world’s biggest consumer markets, while the U.S. maintains a grip on the most advanced chipmaking technologies. The election of Joe Biden as U.S. president has also raised hopes that the geopolitical climate may change for the better.

Nevertheless, for suppliers relocating production — or planning to do so — there is no going back now.

Cheng Ting-fang, Taipei

Which exchange will get the most IPOs/listings — and will it beat 2020?

The New York Stock Exchange and Nasdaq are together set to make sure that the U.S. remains the biggest new-listing destination. However, their greater China counterparts — Hong Kong, Shanghai and Shenzhen — are narrowing the gap, in part driven by Washington’s moves to banish some Chinese companies from U.S. capital markets.

In 2020, $150 billion was raised via new listings on the two U.S. exchanges, while the number exceeded $100 billion across the greater China bourses. If not for the last-minute cancellation of Ant Group’s anticipated $39.6 billion initial public offering — which was scuttled by Chinese regulators — the exchanges would together have run the American exchanges close.

Hong Kong had secondary listings from 12 U.S. listed companies, including online retailer and game developer NetEase, in 2020 and another 50 are eligible to take the same route. Furthermore, Chinese biotechnology and other tech companies that listed in Hong Kong have subsequently performed well, indicating investor appetite. KPMG expects new listings in 2021 in Hong Kong to be worth as much as $51.6 billion, matching the past year’s performance.

On mainland exchanges, a continuing economic recovery and accelerated capital markets reforms over the past year, along with a pipeline of more than 800 companies seeking approval, mean that 2021 promises to be a strong year.

Narayanan Somasundaram, Hong Kong

Will the Tokyo Olympics go ahead?

Could 2021 be the year for Tokyo 2020? (Photo by Ken Kobayashi) 

On Dec. 15, the Tokyo Skytree tower was lit up in cherry-blossom pink and gold to mark 100 days until the start of the Olympic torch relay after it was postponed in 2020 due to the pandemic.

Skytree’s owner, Tobu Railway, was not originally an Olympic sponsor. But the yearlong postponement of the Games led the Tokyo 2020 organizing committee and ad agency Dentsu, its chief whip, to sign on more sponsors to cover the budget shortfall.

Even before postponement costs started piling up, 62 Japanese companies had paid more than $3 billion for Olympic marketing rights — nearly three times the previous record. Now, sponsors have pledged an additional $192 million to tide organizers over through the next eight months. This is on top of the estimated $12 billion spent by the Japanese government for infrastructure, and a further $2.8 billion in postponement costs and COVID countermeasures.

For now, the question is not whether these expensive Olympic Games will go ahead — the Japanese government and the IOC are adamant that they will — but in what form? How will organizers keep athletes, spectators and an increasingly skeptical Japanese public safe from infection? And if foreign attendance disappoints, how will Japan’s tourism industry rebound from the losses of 2020?

One thing is certain: The event, like most Olympics, will not be profitable. (Pyeongchang 2018, which ended $887 million in the black, was a rare exception.)

For Japan’s business and political elite, the best hope now may be that the event will generate goodwill — and not a massive wave of COVID-19 infections.

Francesca Regalado, Tokyo

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the questions for Asian business in 2021 – the questions for Asian business in 2021 –

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