Tuesday, October 18, 2016

Last year we took a peek at companies’ investments in China, measuring the reported value of their PPE (property, plant, and equipment) in that country from 2012 through 2014. Our sample size was only 30 companies, but it still showed a steady increase in PPE over time.

We decided to circle back to Chinese PPE again this week, to see how the numbers look for 2015. As you can see from the chart below, 27 companies reported a total of $21.1 billion in China PPE last year. Apple was in the lead with $8.7 billion, surprising nobody, given the company’s extensive manufacturing operations there.

Then we looked at companies disclosing revenue in China. That list is below. The grand total for 2015 was $118.1 billion, and again Apple topped the list—and again that was no surprise, given the huge size of the Chinese market and its appetite for Apple products.

You can see that not all companies are on both lists. Goodyear, Sandisk, and Seagate, for example, all have manufacturing operations in China large enough that they break out that country as its own PPE segment—but they do not have enough sales in China to offer the same breakout for revenue.

Conversely, numerous companies report sales revenue from China, but don’t disclose any PPE there: Analog Devices, Intel, KLA Tencor, National Oilwell.

Might a company have some operations in China (either sales or PPE), but not report them as a separate segment? Yes. But in those cases we can assume that whatever presence in China they have, it isn’t large enough or important enough to be material to investors.

You can do your own research along these lines using the Calcbench Segments, Rollforwards, and Breakouts database. We have written about using the Segments database before, and we will again. This is just one more example of how you can Calcbench your data research needs!

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