Chinese companies on the Fortune Global 500 list contribute more revenue than US companies for the first time
chinese companies on the fortune global 500 list contribute more

Chinese companies on the Fortune Global 500 list contribute more revenue than US companies for the first time

Fortune Global 500

A hundred and forty-five Chinese companies made it to the 2022 Fortune Global 500 list released on Wednesday. The listed Chinese companies span a diverse set of industries, including energy, metals, technology, banking, and insurance. State Grid, China’s national energy provider, is the highest-ranked Chinese company on the list at number three, just behind Walmart and Amazon.

The revenue of these Chinese companies accounts for 31% of the 500 companies’ total revenue, surpassing the total revenue from US companies on the list (which is 30% of the total) for the first time.

However, Chinese companies’ profitability is still lacking compared to their counterparts. The average profit made by the Chinese companies on the list is $4.1 billion, much lower than the $6.2 billion average profit made by Fortune 500 companies.

Below, TechNode summarizes what you need to know about the five top-ranking Chinese tech firms from the list: Hon Hai Precision, JD.com, Alibaba, Huawei, and Tencent.

1. Hon Hai Precision

Ranking: #20

Founded in 1974, Hon Hai Precision is one of the world’s largest electronic assembling manufacturers and is best known for its Foxconn factories. Foxconn plays a vital part in Apple’s supply chains, assembling the brand’s Mac, iPhone, and iPad products. The company’s pivotal role was on show earlier this year, when China’s Covid lockdowns affected Foxconn factories and led to weeks of delays to some of Apple’s product shipments.

The firm started investing in mainland China in 1988 and has more than 40 plants in the region. The company’s imports and exports account for 3.5% and 4.1% of China’s total import and export volume respectively, according to its official website.

Hon Hai’s position on the Fortune list rose two places from 2021. It brought in $214.61 billion in revenue last year and saw 18% year-on-year growth.

2. JD.com

Ranking: #46

JD.com was founded in 1998 and has grown into an e-commerce giant focusing on consumer electronics in China. JD’s revenue hit $147.53 billion last year, but the firm’s losses continue to expand. In 2021, JD.com lost $551.8 million, up 107.7% from the previous year.

In recent years, the company has accelerated its expansion in logistics infrastructure and made an overseas push. JD Logistics bought delivery rival Deppon for $1.4 billion in early 2022 and logistics infrastructure provider China Logistics Property Holdings last month. In January, JD also teamed up with Shopify to help international merchants sell in China on its platform.

The company is up by 13 places on this year’s Fortune list to the 46th.

3. Alibaba

Ranking: #55

A major Chinese e-commerce company, Alibaba has faced significant regulatory headwinds in China since late 2020. The group has also seen slower growth, partly thanks to more conservative consumer sentiment amid an economic downturn and China’s strict Covid control measures.

The company’s revenue in 2021’s fiscal year grew 25.6% to $132.94 billion, but its net profit saw a 56.4% decrease to $9.7 billion in the same period. Analysts also expect the firm to record its first-ever decline in quarterly revenue in the coming month.

Alibaba ranked 55th on Fortune’s list, eight places higher than last year.

4. Huawei

Ranking: #96

Chinese telecom giant Huawei has fallen more than 50 places on Fortune’s international 500 list, dropping from 44th to 96th. The firm’s revenue also fell in 2021, with the figure down 23.6% on the previous year to $98.72 billion, but its profits grew 88.2% to $17.62 billion during the same period.

The US’s ban on Huawei’s access to 5G chips has stopped the firm’s rapid growth in smartphone sales and pushed it into pursuing a variety of a new projects including cloud services, IoT, and smartphone operation systems. It has also found a growth point in enterprise business, offering cloud and hardware solutions to companies. This sector accounted for 16.1% of its total revenue last year.

5. Tencent

Ranking: #121

Tencent, owner of the ubiquitous messaging app WeChat and a global gaming giant, is also entering a slower growth period, thanks to China’s tighter regulations on gaming and monopolistic behavior.

Nevertheless, in 2021 Tencent earned $86.84 billion in revenue, up 24.3% year-on-year. Its profits increased 50.5% from last year to $34.85 billion.

Affected by China’s pause of gaming licenses and the country’s pandemic controls, Tencent has also been cutting down its workforce to control overheads. The firm turned to setting up studios like TiMi F1 for AAA-level title development and sought new profit growth in overseas markets in 2021. The firm’s overseas gaming business saw an impressive 31% yearly growth in 2021, according to its financial results.

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