We have been tracking Southeast Asia’s conglomerates for 16 years, and what we long predicted has finally happened. After years of enjoying a competitive advantage over their pure-play counterparts, the tables have turned, and pure plays have overtaken conglomerates in multiyear shareholder performance.
Conglomerates underperformed pure plays in total shareholder return (TSR) by a substantial 6 percentage points from 2014 to 2018. (TSR is defined as stock price changes assuming the reinvestment of cash dividends.)
When the high-growth era slowed in 2015, many conglomerates failed to shift their focus to margin expansion and cost…
