The Hurun Research Institute today unveiled the Hurun China 500 Most Valuable Private Companies 2024, showcasing the top 500 non-state-controlled enterprises ranked by their value. The report indicates significant shifts within the standings and highlights the dynamic nature of China's private sector.
For the fourth consecutive year, TSMC (Taiwan Semiconductor Manufacturing Company) holds the title of the most valuable private company in China, with its market capitalization rising to $965 billion, reflecting an increase of $452 billion over the past year. Following closely behind is Tencent, valued at $473 billion, with ByteDance making headlines by surpassing Alibaba to secure the third position with $225 billion.
A total of 291 companies on the list experienced valuation increases, driven by trends within the industrial products, semiconductors, and software services sectors. Rupert Hoogewerf, Chairman and Chief Researcher at Hurun, remarked, "This year, industries on the up were industrial products, semiconductors and software services, reflecting advances in smart manufacturing and the digital economy." The academic expected growth primarily fueled by technological advancements will define the next phase of private enterprise performance.
Notably, the Hurun 500 total value surged by 13% to reach $7.8 trillion, signaling healthy growth for the private sector. The average valuation of companies rose to $15.4 billion, up by $1.6 billion from the previous year. This growth trend aligns with the recent upticks seen across major stock indices, including Nasdaq and the Shanghai Composite Index.
Demonstratively, healthcare companies faced challenges during this year; the total count of healthcare-related enterprises on the list dropped by 12, and consumer goods firms also saw seven fewer representatives than last year. These changes pointed to the repercussions of intensified market competition and industry restructuring. Hoogewerf noted, "[That reflects] the challenges of intensified market competition, industry restructuring and changes in the external environment."
The criteria for inclusion required companies to demonstrate significant market valuation, with the cut-off set at $3.7 billion, which remained stable from last year.
Industry trends are reflected throughout the list, with semiconductor companies showing notable growth. For example, TSMC’s strong performance is complemented by other local chip manufacturers such as Beijing-based Cambricon and Shanghai’s Will Semiconductors, who also reported favorable results this year.
Beijing continues to host the most companies within the Hurun 500, with 65 enterprises located there, followed by Shanghai with 50 and Shenzhen with 49. Combined, these cities account for nearly half of the total companies ranked. Notably, Taipei has now surpassed Guangdong, underlining Taiwan's burgeoning economic influence.
The list documents the evolution of the Chinese economic ecosystem, where industries evolve rapidly. For example, the once-thriving real estate sector, which toppled previous years’ post, now claims just 19 representatives, down from 67 five years ago. This significant decline emphasizes shifting dynamics within investment, signaling real estate as less favorable compared to tech and industrial sectors.
Covid-19's impact has reshaped service and entertainment sectors, with financial services also retracting from the top rankings.
Aside from general trends, the report notes a definitive age differential; the average age of entities on the Hurun China 500 is just 29 years, markedly younger than the average of 67 for global counterparts. This reflects China's vibrant entrepreneurial spirit, particularly among its tech start-ups.
Interestingly, the revenue of these companies totaled $4.38 trillion, which is $166 billion, higher than last year. This performance showcases the potential of smaller companies as well, as 11 among them recorded less than $1 billion yearly sales yet commanded substantial valuations.
With over 13.5 million employees, the significance of the companies listed extends beyond market dynamics, playing pivotal roles within local economies—employing nearly 27,000 staff per company and demonstrating the major impact these enterprises wield over the livelihood of millions.
To provide insight, Hoogewerf stated, "The Hurun China 500 are the backbone of the China economy. Their combined annual sales of CNY30 trillion last year surpassed the GDPs of Guangdong, Shanghai, and Beijing combined," illustrating their foundational role within the economic structure.
Of the notable mentions, the top 10 account for 34% of the total value represented on the list, reflecting their market dominance and influence. For investors and economic analysts alike, the Hurun 500 often serves as both compass and indicator, marking the future trajectories of these industry-leading companies.
For those seeking complete details on company ranks and additional highlights from the report, the full lists are available at the Hurun website.