South Korean conglomerates increased spending on research and development despite falling sales last year, according to a report Tuesday.

The combined R&D spending of 208 conglomerates last year came in at 53.5 trillion won ($44 billion), up 7.8 percent from a year earlier, according to a report on the nation’s large businesses released by corporate tracker CEOScore.

The companies’ combined annual revenue, on the other hand, dropped 0.8 percent to 1,709.7 trillion won during the same period with their combined operating profit standing at 86.6 trillion won, down 40.7 percent on-year.

“The increased R&D spending despite sluggish sales last year reflects companies’ efforts to find new growth engines,” said a CEOScore official.

The collective R&D spending of 208 companies accounted for 3.13 percent of their combined revenue in 2019, up 0.25 percent from a year earlier. The proportion is higher than the 3 percent average for global companies, according to the research firm.

Of the 208 companies surveyed, biosimilar producer Celltrion, which spent 303.1 billion won on R&D, had the highest R&D-to-sales ratio, 26.9 percent. Naver and Netmarble were next with 26 percent and 21.1 percent, respectively.

Among the companies that spent more than 10 percent of their sales revenue were Hanmi Pharmaceutical, NCSoft, Hanwha Systems, Kakao, Daewoong Pharmaceutical, Chong Kun Dang Pharmaceutical and SK hynix.

Tech giant Samsung Electronics came in at No. 15, spending 8.8 percent of its 2019 sales. It also spent the highest amount, 20.3 trillion won, up 8.3 percent on-year.

Other top R&D spenders included LG Electronics, SK hynix, Hyundai Motor and LG Display. They spent 4.3 trillion won, 3.2 trillion won, 3.4 trillion won and 1.8 trillion won, respectively.

By Kim Young-won (wone0102@heraldcorp.com)