Fastest Growing Chinese Companies
When speaking of global growth, the buzzword in the markets is China. Although Chinese GDP has slowed in the past two quarters, the country has maintained an average growth rate of about 10.2% since 2006, far outstripping growth in most Western economies.
Although global markets have recovered a portion of their losses since the lows in the wake of the global financial crisis, growth in emerging markets - and especially China – stands out over this period. Despite worries of a growing real-estate bubble, a potential trade war with the west, uncertainty in relations with regional neighbors and a domestic currency that faces international pressure, many Chinese equities are continuing their upward trajectory at an astonishing rate.
Since Jan. 1, 2009, out of the 879 components on the Shanghai Composite Index, 24 have experienced share price growth of over 500 percent, while 553 companies have seen share price growth above 100 percent. Over this period, the Shanghai Index is up 55%, while the NYSE Composite is up 14 percent. Only one US stock, Ford Motor (+717 percent), can rival the share price appreciation of the fastest-growing Chinese companies. But even Ford would still only just crack Shanghai's top 10.
The fastest growing Chinese companies are listed here as the firms with the highest share price appreciation from market close on Dec. 31, 2008 through Jan. 12, 2011 on the Shanghai Composite Index. These companies must also have a current share price above $3 (USD). All prices and market caps are displayed in US dollars.
By Paul Toscano& Giovanny Moreano
Updated 14 Jan 2011
10. Shan Xi Guo Yang New Energy
Share growth: 625%
Sector: Energy
Share price: $4.27
Market cap: $10.3 billion
Shan Xi Guo Yang New Energy is primarily concerned with producing and processing coal , and using it to generate energy. During 2009, the company reports producing nearly 21 million metric tons of coal and selling nearly 40 million tons.
Throughout 2009 and 2010, the company has been acquiring smaller coal manufacturers, including aquisitions of over $20 million for multiple transactions. The company has also regularly paid dividends.
9. Tianjin Benefo Tejing Electric
Share growth: 634%
Sector: Materials
Share price: $5.19
Market cap: $1.97 billion
Established in 1999, the stock was first listed on the Shanghai Stock Exchange in 2001. The company manufactures power transmission and electrical equipment. They are the flagship firm owned by Tianjin Benefo Machinery and Electric Industrial Holding Group, and according to the company they currently have 1,400 employees and have been identified as the most competitive corporation in the Chinese electrical equipment industry.
Benefo has provided products and services to a series of major projects in China, including the Three Gorges Dam,the Beijing Capital International Airportand the Jiuquan & Taiyuan Satellite Launch Center, according to the company. Benefo also offers its services to the US and other countries outside China through networks such as Alibaba.com.
8. China Avic Avionics Equipment
Share growth: 676%
Sector: Consumer Discretionary
Share price: $4.92
Market cap: $2.4 billion
China Avic Avionics Equipment was formerly known as Jiangxi Changhe Automobile Ltd, and manufactures automobiles and aerospace electronics products. As for aerospace products, the company is focused on lightening systems, cockpit control panels and several types of warning and sensor systems for aircraft. China Avic Avionics distributes both in China and elsewhere.
The company reported on January 10 that its profit for fiscal 2010 is expected to grow by at least 400 percent, citing growing demand and increasing orders, according to Reuters. The company is located in Jingdezhen, in China’s southeast.
7. Ningxia Dayuan Chemical
Share growth: 732%
Sector: Materials
Share price: $4.36
Market cap: $871 million
Ningxia Dayuan Chemical manufactures and distributes plastic and biochemical products, providing plastic products for engineering, as well as raw materials, carbon fiber and reusable byproducts.
The company has seen its share price rise over 940% since the beginning of 2009. In early 2010, the company announced an acquisition of Alashan Left Banner Zhula Gold Development Co, a deal estimated at $245.35 million, according to the Financial Times. The deal has not yet closed, but since the announcement, Ningxia’s share price has increased by nearly 43%.
6. Jiangsu Gaochun Ceramics
Share growth: 801%
Sector: Industrials
Share price: $6.03
Market cap: $507 million
Located in the Jiangsu Gaochun Economic Development Zone,Jiangsu Gaochun Ceramics is one of the beneficiaries of rapid industrialization in Nanjing, which is developing industrial parks and drawing large amounts of foreign investment. Jiangsu is less than 100km (62 miles) from Nanjing’s port and 50km (31 miles) from the Nanjing Lukou International Airport, giving it convenient access to global markets.
Products include industrial ceramics, such as honeycomb ceramics used in catalytic converters, as well as environmentally friendly and “daily use” ceramics such as dinner sets, tableware and coffee sets, according to the company. Their products have a high volume of sales in American department stores and are a large supplier to the Japanese market, according to the company.
5. Sichuan Western Resources
Share growth: 842%
Sector: Materials
Share price: $5.77
Market cap: $1.4 billion
Sichuan Western Resources is primarily engaged in copper mining operatings and the distribution of copper concentrate powder, operating in the Gansu Provence in Central China.
The company was established in 1995 and reports annual ore processing capacity of 350,000 tons. Sichuan has been expanding in 2010, including the purchase of 80% of Nanjing Yin Mai Lead-Zinc mine, which it expects to generate $21 million per year through 2012. Since January 2009, the company’s share price has grown an astounding 763.8%.
4. Sanan Optoelectronics Co.
Share growth: 855%
Sector: Information Technology
Share price: $6.09
Market cap: $4.5 billion
Sanan Optoelectronics is involved with the research, development and production of light emitting diode (LED) products in Central China and is one of the largest manufacturers of LEDs in the country.
Sanan’s products range from LED panel lights and LED bulbs to LED street lamps and tunnel lamps. The company holds 64 global patents and retains an R&D team composed of 190 engineers from the US, Japan and Taiwan.
They report production of 500,000 units per month, exporting 40% of their products to the US, Europe and Southeast Asia, according to the company. The company is also a bulk supplier, with a minimum order requirement of 300 units, offering a range of 53 products.
3. Inner Mongolia Baotou Steel
Share growth: 906%
Sector: Materials
Share price: $10.69
Market cap: $8.6 billion
The company with the fastest growing share price on the Shanghai Stock Exchange since January 2009 is Inner Mongolia Baotaou Steel, which has a market capitalization of approximately $8.6 billion.
The company is a state-owned enterprise in Boutou, in Northern China and part of the Baotou Iron & Steel group. Part of the Baogang group, which operates in the “largest rare earth industrial base in China and the biggest industrial enterprise in Inner Mongolia,” it produces a variety of steel products, including rods, beams, columns, tracks and seamless pipes, along with consulting services.
The Baogang group as a while produces 5 million tons of steel products annually, which comprises a significant percentage of the rails required for China’s high-speed train system. Inner Mongolia Baotou Steel showed explosive growth through 2009, but has seen its share price more than double over the past 6 months, trading at an average volume of 30.8 million shares per day.
2. Haitong Food Group Co.
Share growth: 948%
Sector: Consumer Staples
Share price: $5.76
Market cap: $1.3 billion
Haitong Food group is involved in the processing, production and distribution of frozen, dehydrated and canned food products, distributing in both domestic and overseas markets. It’s most notable brand is the “Kaiz” series, which has seven major categories and over 200 varieties, which are also sold in Japan and the US.
The company is also involved in promoting “modern agriculture” in China, developing safety and sanitary standards, but acknowledges that its progress and development depends on continuing support from the Chinese government.
1. Guangxi Wuzhou Zhongheng
Share growth: 1,358%
Sector: Healthcare
Share price: $5.50
Market cap: $3 billion
The Guangxi Wuzhou Zhongheng Group engages in the manufacture and sale of pharmaceutical products in China, producing medicines for cardiovascular and cerebrovascular diseases and respiratory diseases, among others.
As most fast-growing Chinese companies, Guangxi is involved in a number of disparate areas, including real estate development, beverages and entertainment businesses, according to the company. The pharmaceuticals industry in China has been helped via stimulus from the government’s reforms of the country’s medical system, which caused explosive growth in the second half of 2009, according to Research in China.