Yahoo Finance 5 Stocks Most Exposed To China As Its Economy Slows And President Xi Makes Latest Taiwan Threat: 'China Will Surely Be Reunified'
China's economy continues to see turmoil amid a perfect storm of issues coming together. An aging population is contributing to a decrease in productivity. At the same time, several real estate companies have gone under as rising interest rates and an overall slowdown have caused a meltdown in the Chinese real estate market.
It's not just China's economic slowdown that investors must contend with.
Over the weekend, Taiwan Vice President Lai Ching-te clinched the third consecutive presidential election win for his Democratic Progressive Party despite heavy election interference from China.
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Even before the election, China President Xi Jinping stated in his New Year's address that the reunification of China is a historical inevitability. "China will surely be reunified," he said. Shortly after, if the initial threat wasn't enough, China's spokesperson for the Taiwan Affairs Office of the State Council said, "Taiwan is China's Taiwan."
Whether the drums of war grow louder or not following these words, investors may be more heavily exposed to China than they might think. Here are five U.S. companies whose revenue is the most heavily exposed to China.
Qualcomm Inc.
Qualcomm Inc. (NASDAQ:QCOM) doesn't just lead the list of companies in the S&P 500, it's doubling down on the market. Roughly 64% of Qualcomm's revenue comes from China. China is the largest semiconductor market in the world, and the demand from Chinese smartphone manufacturers is surging. Qualcomm CEO Cristiano Amon said in the company's most recent earnings call that it saw a 35% jump in sales in the Chinese smartphone segment. This success extends to automobile companies BYD Auto Co. Ltd., Nio Inc. and Li Auto Inc., which have all integrated chips into their vehicles.
"If you have a leading technology, you’re going to have a big business in China," Amon said. And as it stands, no one is doing more big business in China than Qualcomm.
Monolithic Power Systems
With China being the largest semiconductor market, it's no surprise to see another semiconductor company at No. 2. Monolithic Power Systems Inc. (NASDAQ:MPWR) maintains about 51% of revenue exposure to China. It's worth noting that all of the revenue is from the mainland.
Texas Instruments
While you might know it for its graphing calculators, Texas Instrument Inc. (NASDAQ:TXN) does much more in the semiconductor space. The company designs, manufactures, tests and sells analog and embedded semiconductors in the industrial, automotive, personal electronics, communications equipment and enterprise systems. About 48% of its revenue comes from China, also from the mainland.
Western Digital
With about 44% of its revenue from China, Western Digital Corp.'s (NASDAQ:WDC) data technology products have continued to be a hit in the Asian market.
Las Vegas Sands
Las Vegas Sands Corp. (NYSE:LVS) gets about 39% of its revenue from China, albeit all is from its gambling hub of Macau. For context, Macau is referred to as the "Las Vegas of Asia."
Investors fearful of increased tensions with China should be mindful of how much exposure they might have to China even if they don't own any Chinese companies outright. War isn't the only thing that could crush corporate profits for the most exposed companies — contentious trade wars have been started over less.
Even if China undergoes increased military drills or decides to blockade the island without directly invading, increased tariffs or sanctions could limit the ability of American companies to operate in the Chinese market. Investors can only hope cooler heads prevail — if a war breaks out, the ripple effects will be felt far beyond these companies.
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This article 5 Stocks Most Exposed To China As Its Economy Slows And President Xi Makes Latest Taiwan Threat: 'China Will Surely Be Reunified' originally appeared on Benzinga.com
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