General view of Central financial district during sunset, in Hong Kong.
According to Refinitiv data, Asian companies' forward 12 month earnings estimates were increased by 1.9% in July, which is the 13th consecutive profit increase by analysts.
Goldman Sachs, which expects 35% EPS growth for MSCI Asia Pacific ex-Japan this year, said continued robust sales growth and margin recovery will be the drivers of strong earnings.
We expect 8% macro index upside in the second half of this year, but the path may be bumpy given the large number of regional concerns, it said.
After a rally in the first half of this year, infectious shares faltered in July, hit by rising cases of the Asian Delta variant of COVID-19 in the region.
Australian companies led the region's improvements in July as analysts raised their projected 12-month profit estimates 11.5%.
Analysts also raised their earnings estimates for Japanese, Taiwanese and South Korean companies respectively by 2.4%, 2.3% and 0.8%.
The Japanese economics have piggybacked on the back of rising global trade. There are still potential upside surprises from inventory replenishing, an upswing in European capex and a very sharp turn-around in global growth, broker Jefferies said in a report.
South Korean exports jumped to a record high in July, boosted by overseas demand for chips and biohealth products.
According to a Reuters poll, Taiwan's exports have likely increased for a 13th month as the global economy traces its path back to recovery with sustained work-from-home trends.
The earnings upgrades also came after solid second-quarter results posted by Asian companies so far.
Refinitiv data showed that 64% of companies that released 2nd-quarter results have beaten the forecasts of analysts.
Meanwhile, China, Malaysian and China companies faced stock market meltdowns in the last month.