Market Cap 100: Top 10 most valuable companies by market capitalization

The latest "Asia Supply Chain Market Cap 100 Ranking" renders insights of the year 2021 share performance and valuation of listed companies engaging in the manufacturing supply chains in Asia. The results showed that despite the challenges such as COVID, extreme weather, geopolitical uncertainties, and chip crunch, the top 10 most valuable companies in Asia supply chains managed to survive, and some even excelled than ever before.

DIGITIMES conducted rankings on the market capitalization data of listed companies that engage in manufacturing activities in the Asia supply chains with the cut-off date set on December 31, 2021. The top 100 companies were categorized in sectors such as tech product/equipment, consumer electronics, semiconductor, electrical components, electronic components, automotive manufacturing, automotive components, and machinery industries.

Among the companies that made them to the list of top 100 market cap, 67 enjoyed growths in market value from the previous year, while 31 suffered a decrease.

Taiwan Semiconductor Manufacturing Corp. (TSMC) garnered the top place with a market cap of US$576.3 billion as of the last trading day of 2021, up 17.8% from 2020. This may make one wonder, why TSMC, a B2B wafer foundry service provider, can beat companies whose revenues or employee headcount are much larger than it with such a huge margin?

Samsung (in the tech products and equipment) came second with US$392.8 billion, but down 11.6% during the same period. Toyota Motor took third place, reporting US$298.6 billion, and somehow managed to grow by 17.9%, despite the chip crunch that seriously impacted the automotive industry worldwide.

TSMC taking the lead

"The top 3 companies are in the same order compared to last year. The reason why TSMC continuously got No. 1 in market capitalization is highly related to the market's recognition of its competitive advantage and the semiconductor industry's important role being recognized by the world after the US-china trade war and COVID-19 pandemic. TSMC is definitely the world leader in advanced technology R&D and production," said Eric Huang, vice president of DIGITIMES in charge of DIGITIMES Asia and lead the research team to conduct this survey.

However, TSMC's share price had consolidated in a very narrow range for the most part in 2021, with only a moderated increase of 16%. because TSMC's stock price had enjoyed a 60% surge in 2020, hence it is quite understandable for it to go through a period of consolidation. In addition, demands for foundry services from advanced to mature processing nodes remain robust and are still queuing to be served.

The structural change in the IC foundry demand side should also be noted. As more and more companies now design their own chips either in-house or by fabless design companies for best performance on their devices, TSMC and Samsung are the only two companies that can provide advanced processing nodes (7 nm and below) in the world.

"TSMC's customer portfolio includes all top players in the CPU/GPU domain, such as Intel, AMD, Nvidia, Qualcomm, and MediaTek, as well as ASIC customers such as Apple, its competitive edge is indisputable," said Huang.

Samsung Electronics, due to the fact that display, mobile devices, consumer electronics, and Harman (an American car infotainment system maker acquired by Samsung) along with semiconductor business under one business entity, told a different story.

Semiconductor business accounted for 35.7% of Samsung's total sales and 63.5% in operating profits in Q3 2021 (Q4 data not available yet). Though its semiconductor division enjoyed double-digit growth in sales and doubled profits from a year ago, its market cap performance was dampened by the slow growth of other end product divisions.

Toyota grows despite chip crunch

While most of the Asian automakers suffer the tremendous impact of the chip crunch, Toyota was a rare case among automakers to see market cap increase by double-digit. Its share price rose by 32% on the Tokyo Stock Exchange in 2021, but the market cap was up 18% denominated in US dollar, due to foreign currency conversion and a $2.3 billion stock buyback plan that is due in March 2022 to maintain its ROE above 10%.

Toyota was fast in straightening its supply chains and ramping up production to meet demands ahead of the other automakers during the recovery from the pandemic, according to Bloomberg. It forecasted in May 2021, a JPY 2.5 trillion (approximately US$22 billion) operating profit for the fiscal year ending in March 2022. During the first half in FY2022 (6 months ending in September 2021), Toyota's total sales surged 36% year-on-year, while operating profit had exceeded JPY1.7 trillion.

Besides its superior supply chain management capability, Toyota's announcement to commit $70 billion in pure electric vehicle cars by 2030 December was well-received by the market. Forbes senior contributor said although Toyota's plan to go 1/3 of its vehicle lineup to be all-electric by 2030 is more restrained, compared with Volkwagen's 50%, the market consensus seems to have recognized Toyota's plan as a sensible approach to the EV evolution.

Companies whose market value ranked the fourth to 10th-largest among Asian supply chain manufacturers were: CATL (electrical component), Sony (consumer electronics), Keyence (tech product and equipment), BYD (automotive manufacturing), Tokyo Electron (semiconductor), Midea (consumer electronics) and SK Hynix (semiconductor).

Semiconductor equipment manufacturers and EV/battery companies including battery and EV manufacturers apparently were the darlings of capital markets in Asia in 2021. CATL, BYD, saw their market cap grow by 72.1%, 44.2%, respectively. Tokyo Electron, one of the biggest semiconductor equipment makers, enjoyed a 55.1% increase.

Sony is a rare case among consumer electronics manufacturers, which was able to grow 26% in market capitalization in a sector where most of the companies saw market cap slip. "Sony's success may have owed to the popularity of PS5 game consoles, which were sold out soon after stocks were filled," said Tom Lo, DIGITIMES research manager.

Market capitalization or market value reflects the stock market's perception of a company's value, related to its value proposition, market position, and its competitiveness among peers. This ranking is an important indicator to reflect a company's value creation performance and competitiveness.

Editor note: DIGITIMES Asia released the "Asia Supply Chain Market Cap 100 Ranking," based on market capitalization data of listed companies that engage in manufacturing activities in the Asia supply chains with the cut-off date set on December 31, 2021.