TSMC Surpasses Tencent as Highest Value Company in Asia, as Top Chinese Firms Drop From Global 500 Ranking

China has 32 companies on Hurun’s global 500 list while the United States has 260

A man walks past the Beijing Stock Exchange on its first day of trading in Beijing on November 15, 2021. (Photo by WANG Zhao / AFP) Photo by WANG ZHAO/AFP via Getty Images

Top Chinese companies have tumbled in market cap, with 12 firms dropping out of the 2022 Hurun Global 500, a list of the 500 most-valued, non-state-owned firms in the world.

According to the 2022 report released by the Shanghai-based Hurun Research Institute on Dec. 9, the United States leads the world with a total of 260 companies on the list, a 17 percent increase.

China ranks second with 32 companies on the list, 12 fewer than in 2021, the steepest fall since 2020.

Meanwhile, Taiwan’s three companies—Taiwan Semiconductor Manufacturing Co. (TSMC), Foxconn, and MediaTek—remain on the list, with TSMC surpassing China’s Tencent Holdings to become the highest-value company in Asia.

The logo of Taiwan Semiconductor Manufacturing Co. (TSMC) at its headquarters, in Hsinchu, Taiwan, on Jan. 19, 2021. Ann Wang/Reuters

The market caps of the listed companies are based on their closing price on Oct. 26. Valuations of non-listed companies are estimated based on listed companies in the same industry or on their latest round of financing.

The entry value threshold for the 2022 Hurun Global 500 is $28 billion, a decrease of 23.5 percent from $36.6 billion in 2021. The total market cap of companies on the list is $47 trillion, a decline of $11.1 trillion from 2021, or about 19 percent in value.

“This year’s [Hurun] top 500 list indicates hardships for private companies around the world. Only 160 companies have increased in value compared to last year, less than one-third of the total, meaning the value of more than two-thirds of enterprises experienced no growth or even regressed,” Li Songyun, a doctorate in economics and expert on the Chinese economy, told The Epoch Times on Dec. 12.

“From a global perspective, the United States has a clear advantage compared to other regions. The number of companies on the list for other countries declined, but the U.S. added 17 companies to the list. Although China remains second-ranked, there is a clear gap between it and the U.S.”

A total of 260 companies from the United States made it onto the list, 17 more than last year. The U.S. companies on the list make up 65 percent of the top 500 firms’ combined market cap.

Apple Inc. ranks first with a market capitalization of $2.4 trillion, a 3 percent decrease from last year. The rest of the top five companies on the list are Microsoft, Alphabet, Amazon, and Tesla.

False Claim by Chinese Media

Despite having only 32 firms making Hurun’s top 500 in 2022, Chinese media widely claimed that the country has 35 companies entering the list, with a total market capitalization of $2.6 trillion. The claim owes to China’s self-declared inclusion of the three Taiwanese firms—TSMC, Foxconn, and MediaTek.

According to the Hurun list, TSMC, the world’s largest semiconductor foundry, had a market cap of $317 billion at the time of compiling the report, ranking 17th, surpassing Tencent Holdings to become the company with the highest valuation in Asia.

Foxconn, which ranks 309th, and MediaTek, which ranks 495th, have market caps of $44 billion and $29 billion, respectively.

After deducting the market capitalization of the three Taiwanese companies, Chinese firms on the list have an approximate combined market capitalization of $1.95 trillion, about 4 percent of the top 500 firms’ combined market cap, which is far smaller than the United States’ 65 percent.

Japan ranks third, with 28 companies on the list, two fewer than last year. The United Kingdom and Canada ranked fourth and fifth, respectively.

“With 12 companies failing to make the list, China has the highest proportion (more than a quarter) of missing companies this year compared with other nations,” Li said.

Poor Performance of Chinese Stocks

Li said that many Chinese companies failed the list primarily because of their poor performance in the Chinese domestic and Hong Kong stock markets as well as the Chinese concept stocks listed in the United States.

She believes the reasons include China’s zero-COVID policy; the uncertainty of the regulation of private companies and its real estate policies; U.S. regulators’ enhanced auditing of Chinese concept stocks; and the inclusion of Chinese companies on its “delisting watchlist.”

“[These reasons] concern foreign investors about China’s overall economic prospects, accelerating their withdrawal from the Chinese market,” Li added.

Among the Chinese companies on the list, the top-ranked company is Tencent Holdings, with a market cap of $265 billion, a 62 percent plunge from last year’s $697 billion, dropping its ranking from 6th in 2021 to 26th this year.

A man walks outside the Tencent headquarters in Nanshan district of Shenzhen, Guangdong Province, China, on Sept. 2, 2022. David Kirton/Reuters

Tencent Holdings’ market cap dropped the third most among the top 500 companies, just after Meta, Facebook’s parent company, and Amazon, which lost $618 billion and $587 billion, respectively.

The fourth largest drop in market cap is Alibaba, plunging 71 percent from last year, dropping its ranking from 9th in 2021 to 48th this year.

In July of this year, Tencent Holdings and Alibaba were again severely fined by Chinese regulators in the name of violating the country’s antitrust law. Alibaba was fined 2.5 million yuan (about $350,000) for five business acquisitions, and Tencent Holdings was fined 6 million yuan (about $840,000) for 12 acquisitions.