The left chart compares the earnings between export-oriented companies within Asia Pacific ex-Japan, against those which derive a majority of their revenue domestically.
The green line illustrates that domestic-oriented companies have delivered more consistent earnings growth and, subsequently, return to long-term investors, especially in the past few years, as market volatility remains quite elevated. Meanwhile, the right chart shows that Asian exports have a close, positive relationship with corporate profits. As Asian exports slowed in the recent months, we expect some downside risks to corporate profits going forward. However, Asia's export downturn may be offset by China's reopening and growth rebound, thereby providing some support to Asian corporate profits.