Something happened recently in the forex markets that many didn't think would happen ever again. In early August, China's RMB currency depreciated past the psychological and symbolic 7-level to the US dollar for the first time since 2008.

China's government allowed its currency to depreciate due to the trade tensions with the US and the new Trump tariffs expected on potentially hundreds-of-billions-of-dollars worth of Chinese imports beginning in September. Some analysts think the RMB could potentially depreciate to as low as 7.20 RMB to the dollar, or a 5% drop versus the exchange rate before the beginning of the trade tensions.

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Although the lower currency will provide relief to exporters and make them more competitive, the currency devaluation will also affect many Chinese mainland companies listed in Hong Kong, with its local currency (the Hong Kong dollar) maintaining a peg to the US dollar.

If China's RMB falls, mainland companies that earn most of their money in RMB will make less in Hong Kong dollar terms. Given those conditions, here are four companies that will be affected negatively by the RMB's continued depreciation.

1.) Chinca Unicom

China Unicom (Hong Kong) Limited (CHU) is one of China's largest telecommunications companies with around 324 million mobile subscribers as of June 2019. For 2018, China Unicom reported net profit of RMB 10.2 billion, or RMB 0.333 per share.

If the RMB depreciates around 5% from 2018, China Unicom's earnings in Hong Kong dollars could also shrink by 5%. China Unicom's expenses could also increase in RMB terms for the import components for the 5G network that China Unicom will build over the next few years. Furthermore, it would impact the Hong Kong dollar amount that it pays out for its dividend.

2.) Ping An Insurance

Ping An Insurance Group Co (2318) is China's largest insurance company and a leading fintech player with RMB 120.4 billion in net profit for 2018. In the long run, Ping An hopes to earn as much as half of its profit from technology-related operations.

Given that it currently earns most of its net income from insurance and most of Ping An's insurance is underwritten is in China, however, the RMB depreciation could lower Ping An's earnings in Hong Kong dollar terms. Again, given Ping An pays a dividend, and has been growing it recently, the rate of this dividend growth could slow in Hong Kong dollar terms.

3.) Geely Automotive 

Geely Automobile Holdings Ltd (GELYF -1.50%) is negatively impacted in two ways. First Geely Auto's earnings are lower since it gets most of its earnings from the Chinese mainland market. For the first seven months of 2019, over 94% of Geely's 743,055 vehicles that were sold were domestic sales, for example.

Although Geely Auto benefits from the lower currency by being more competitive in terms of exports to many countries, the company doesn't export that much to the West. Second, the depreciation could make oil more expensive in RMB terms. If oil is more expensive, consumers will be more likely to buy more fuel-efficient vehicles that offer potentially lower profit margins for Geely.

4.) Want Want

Want Want China Holdings Ltd (151 -0.87%) is a maker of rice crackers and various snacks – one of a number of large consumer staples firms in China. In 2018, over 90% of Want Want's activities were conducted inside mainland China and the company did not hedge against foreign exchange risks for that year.

In terms of its foreign exchange exposure, Want Want's expenses could rise due to the potential increase in import costs of raw material and equipment from overseas.

Foolish Conclusion

Whenever a significant macro development such as currency depreciation in China occurs, many companies both inside and outside the country are affected. For Geely Auto, Want Want, Ping An and China Unicom, the depreciation is a definite negative for their earnings.

The good news, however, for all four companies is that China's RMB could strengthen again if the US and China resolve their trade war or if the Chinese economy recovers on its own. However, this is something investors should monitor closely and keep in mind before making an investment decision.

A version of this article originally appeared on our Fool Asia site. For more coverage like this head over to