🗞 8 US companies with Significant China Exposure

Happy Sunday!

Here’s what’s on the docket for this week’s newsletter:

• 🇨🇳 8 US companies with Significant Exposure to China

• 🔈️ Searching For Businesses with Unrecognized Earnings Potential

Let’s dive in!

8 US companies with Significant Exposure to China

Trade tensions intensified this week as US President Donald Trump and Chinese President Xi Jinping both ramped up retaliatory tariffs.

Whether or not these proposed tariffs get implemented or are simply bargaining tactics remains to be seen. Either way, as investors it’s worth taking inventory on which companies could potentially be impacted.

With that, here are 8 US companies that have significant exposure to the Chinese market:

1. Nike

Not only does Nike generate 15% of its overall sales from China, but the Chinese market is also the company’s 2nd largest production center behind Vietnam.

2. Apple

Not only does Apple derive 16% of their revenue directly from China, but analysts estimate that 90% the iPhones are assembled there as well.

In fact, the city of Zhengzhou is home to ~300k employees and has been dubbed "iPhone City".

3. Starbucks

Although China accounts for less than 10% of Starbucks' overall revenue, it has been a big area of investment for the coffee giant.

They've added ~7k stores in China over the last 10 years, now accounting for 19% of all Starbucks locations.

4. Intel

China is Intel's largest market by revenue accounting for more than 29% of all Intel sales.

5. Tesla

The Chinese market accounts for 21% of Tesla's revenue, but importantly the company's factory in Shanghai is critical for production.

According to estimates, more than 50% of Tesla's EVs are produced at its Giga Factory Shanghai.

6. Applied Materials

Applied Materials is a global supplier of advanced semiconductor equipment.

China is its largest market accounting for 34% of all sales.

7. Corning Incorporated

56% of Corning's revenue comes from APAC, with the vast majority of that made up by China.

The optical communications & display technologies provider generates 33% of its revenue from China specifically.

8. Mettler-Toledo

While China only accounts for 16% of Mettler-Toledo's sales, it's the company's most profitable geography, accounting for more than a quarter of overall operating profits.

A.U.M. Podcast

Jeremy Deal - Searching For Unrecognized Earnings Potential

This week the FinChat team interviewed Jeremy Deal. Jeremy is the founder and portfolio manager of JDP Capital, an investment firm focused on making durable investments in businesses with unrecognized earning potential.

In our discussion, Jeremy highlights how some of his best investments have come from companies that provide immense value to customers sometimes at the expense of short-term earnings.

Meme of the week

Over the last several months, the US Presidential Administration has flip-flopped on its proposed tariff policy several times. And every time, investors have felt the impact.

After falling more than 15% in just over a month, the S&P 500 jumped more than 10% on Wednesday marking the 3rd largest single day increase in recorded history.