Since Hanhanryeong, Major Corporations' Chinese Subsidiaries' Sales Halved... Only Battery and Semiconductor Sectors Grow

CEO Score Investigates Sales of 113 Domestic Large Corporations' Chinese Subsidiaries
46 Chinese Subsidiaries of Domestic Large Corporations Sold or Liquidated
Hyundai Motor and Others in Auto and Parts Sector Show Largest Decline

Since 2016, when the Chinese government's pressure on Korean companies, including the Hanhanryeong restrictions, intensified, the sales of domestic conglomerates' Chinese subsidiaries have decreased by about 13% over six years. Excluding batteries and semiconductors, the sales decline reaches approximately 40%.

CEO Score, a corporate data research institute, announced on the 5th that it investigated the sales of 113 out of the top 500 domestic companies that disclosed the performance of their Chinese production subsidiaries over six years from 2016, when the Hanhanryeong restrictions in China began in earnest, to last year.

The combined sales of these companies last year totaled KRW 111.0424 trillion, a 13.1% decrease compared to KRW 127.7292 trillion in 2016. Excluding domestic battery and semiconductor companies whose sales in China have surged recently, the sales of domestic conglomerates' Chinese production subsidiaries shrank by 37.3%, from KRW 117.23 trillion in 2016 to KRW 73.4485 trillion last year.

Top 10 companies with the largest decrease in sales of Chinese production subsidiaries since 2016.
[Photo by CEO Score]

The company with the largest decrease in sales from its Chinese production subsidiary was Hyundai Motor Company. The sales of Hyundai Motor's Chinese subsidiary, 'Beijing Hyundai Motor Company,' plummeted by 75.7% (KRW 15.2284 trillion), from KRW 20.1287 trillion in 2016 to KRW 4.9003 trillion last year. Among domestic companies, Hyundai Motor's Chinese subsidiary is the only one with a sales decrease exceeding KRW 10 trillion.

During the same period, Kia's Chinese subsidiary, 'Jiangsu Yueda Kia Motors,' also saw its sales drop sharply by 80.8% (KRW 7.9161 trillion), from KRW 9.7996 trillion to KRW 1.8835 trillion. As a result, the combined sales of Hyundai Motor and Kia's Chinese production subsidiaries shrank to about one-fifth of their size over six years.

This also negatively affected the performance of domestic parts suppliers. Last year, Hyundai Mobis's Chinese production subsidiary sales dropped sharply by 80.8%, from KRW 8.8746 trillion in 2016 to KRW 1.7051 trillion. Hyundai Transys (-55.1%), Hyundai Wia (-62.7%), Sungwoo Hitech (-71.4%), and Hyundai Kefico (-74.3%) also experienced significant declines in sales from their Chinese production subsidiaries.

In the case of Samsung Electronics, due to the contraction of the Chinese smartphone and home appliance sectors, sales of its Chinese production subsidiaries decreased by 43.5%, from KRW 17.1236 trillion in 2016 to KRW 9.6798 trillion last year. The closure of the Huizhou factory in 2021 is considered to have directly impacted this sales decline. Samsung Display's Chinese subsidiary sales also plunged by 49.9%, from KRW 10.7831 trillion in 2016 to KRW 5.4035 trillion last year.

While leading domestic automobile and electronics companies that once showed strong performance in China are losing their foothold there, batteries and semiconductors are recording growth due to market expansion within China.

In particular, the three K-battery companies?LG Energy Solution, Samsung SDI, and SK On?achieved record-breaking performances in China. LG Energy Solution's Chinese subsidiary sales last year reached KRW 12.8458 trillion, a 431.6% increase compared to KRW 2.4167 trillion in 2016. During the same period, Samsung SDI's Chinese subsidiary sales expanded by 483.5%, from KRW 929.8 billion to KRW 5.425 trillion over six years. Samsung SDI's Tianjin production subsidiary, which manufactures secondary batteries, recorded a sales growth rate of 2558.7%. SK On, which established a new subsidiary in China in 2019, also posted sales of KRW 2.0979 trillion last year.

Semiconductor sales also grew. Samsung Electronics' Chinese semiconductor production subsidiary in Xi'an (SCS) saw its sales increase by 133.1%, from KRW 4.1521 trillion in 2016 to KRW 9.6798 trillion last year, and SK Hynix's Chinese production subsidiary sales rose by 151.5%, from KRW 3.006 trillion in 2016 to KRW 7.5454 trillion last year.

Additionally, Chinese subsidiary sales of LG Chem (179.4%), LG Display (38.7%), Hyosung TNC (182.3%), HD Hyundai Infracore (138.1%), and Samsung Electro-Mechanics (21.0%) also showed growth.

This content was produced with the assistance of AI translation services.