HIGHLIGHTS

China’s next 100 global giants 2016 edition

Two years on from the first global giants report, this report identifies the next generation of 100 fastest-emerging Chinese businesses that will be competing globally over the next three to five years. These businesses have established strong bases in China, are internationalising more rapidly and, perhaps most importantly, continue to grow at rates that are far faster than either global growth or growth in China. China’s next global giants 2016 are bucking the trend of a slowdown in economic activity worldwide.

© The Association of Chartered Certified AccountantsOctober 2016

About ACCA ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

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FOR FURTHER INFORMATION CONTACT:

Faye Chua Head of Business Insights, ACCA

+44 (0)20 7059 5975 faye.chua@accaglobal.com

Faye Chua is ACCA’s head of business insights, leading ACCA’s future research and its global research and insights programme with a focus on the future directions of business and the accountancy profession across a range of subjects and disciplines. Faye has over 10 years of experience in research across different sectors of the economy and has worked in North America, Asia-Pacific and Europe.

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China’s economic health and performance, whether tracked via the fortunes of the renminbi, GDP, export figures or, indeed, the host of other economic indicators, is one of the most eagerly anticipated and monitored of any country’s around the world.

This report is ACCA’s second ranking of emerging global businesses debuting from China that are expected to grow and contend with established global players; the first such ranking was in 2014. This ranking is unlike any other league tables, which rely on a small number of financial measures, mainly size, rather than on wider measures of performance and competitiveness. This approach of ranking of China’s emerging global giants provides a fuller, deeper and more wide-ranging analysis than other league tables of Chinese businesses.

So what has happened since 2014? Chinese businesses have been busy. Firstly, they have increasingly focused on expanding overseas, not only through exporting but increasingly through mergers and acquisitions, strategic partnerships, and establishing research and development and innovation centres around the globe. Secondly, Chinese businesses in 2016 are even more international than they were in 2014.

What is more impressive, however, is that the annual growth rate of the 100 companies identified in this report outstrips not only the nation’s GDP but also that of the global economy – and this trajectory is expected to continue in future.

Faye Chua Head of Business Insights, ACCA

Introduction

This report is ACCA’s second ranking of emerging global businesses debuting from China that are expected to grow and contend with established global players; the first such ranking was in 2014.

Two years on, the 2016 report looks again at China’s emerging global businesses, re-visiting companies that were in the first top 100 ranking and identifying new entrants in this league table. These companies follow in the footsteps of large and now well-known Chinese businesses such as Haier, Lenovo, and Alibaba, and less well-known, but still global, companies. These businesses have established strong bases in China, are internationalising more rapidly and, perhaps most importantly, continue to grow at rates that are far faster than both global growth and growth among Chinese companies in general. China’s next global giants 2016 are bucking the trend of a slowdown in economic activity worldwide.

THE APPROACH

In order to identify these businesses, companies listed on domestic Chinese and international stock exchanges were considered. The companies were filtered by size. Five-year growth rates were also considered, in order to ensure that businesses were growing sustainably over a longer period. Maintaining high levels of annual growth over time indicates that a business has a sound business model and the capacity to cope with growth. The ranking also considers the market positioning and performance of emerging Chinese businesses, in terms of: domestic market presence in China; extent of activity in international markets outside China; and business model and strategy.

The rationale for the approach can be summarised as follows.

1. Size provides an indication of a company’s scope to generate sufficient surpluses to invest in or to secure funding for continued growth, and of whether it has sufficient scale to be able to compete from a position of strength in domestic and international markets.

2. Growth over a considerable period, five-year, demonstrates the ability of the business to scale up and expand in a sustainable way.

3. Domestic presence. The identified companies are establishing a strong domestic market presence before building markets overseas. The Chinese market represents a platform for international expansion, following on from success in the home market.

4. International presence. In the 2014 ranking, this was largely defined by export markets, and export sales were used as a key measure. Since then, Chinese companies’ international presence has expanded to include international acquisitions, partnerships and presences, particularly logistics hubs, and design and R&D centres.

5. Business model and strategy. Although this was the most complex measure to determine and assess, it was also the most significant.

This report identifies the 100 fast-growing Chinese businesses that are becoming emerging global giants. Their growth and overall competitiveness indicate that they are likely to continue to expand. Over the next few years, if they continue on their current trajectories, many of these businesses will become China’s next generation of global corporations.

No futures work of this type can ever expect to be definitive but it is hoped that it will to provide a glimpse of the future of Chinese businesses in the coming years.

For full report: xxxx

About the report

Two years on, the 2016 report looks again at China’s emerging global businesses, re-visiting companies that were in the first top 100 ranking and identifying new entrants in this league table.

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Figure 1: Headquarter locations of China’s next 100 global giants

Tibet

TaiwanHong Kong

Zhuzhou City (2)

Yichang City (1) Wuhan (5)

Shangrao (1)Chongqing (1)

Harbin (1)

Beijing (13)

Urumqi (1)

Xi’an (1)

Shanghai (5)

ShandongLiaocheng (1)

Yantai (1)Zibo City (1)

JiangsuChangshu (1)

Jiangyin (2)Nanjing (4)

Nantong City (1)Suzhou (4)

Wuxi (1)Yancheng (1)

Yangzhou City (1)

Jingdezhen (1)

AnhuiHefei (1)

Xuancheng City (1)

FujianFuzhou (2)

Longyan City (1)Zhangping (1)Zhangzhou (1)

ZhejiangCixi (1)

Dongyang (2)Hangzhou (5)

Huzhou City (1)Jiaxing City (1)

Ningbo (1)Shangyu (1)

Shaoxing (2)Taizhou (2)

Wenling City (1)Zhuji (1)

GuangdongFoshan (2)

Guangzhou (1)Shantou City (2)

Shenzhen (11)Zhongshan (1)

Tianshui City (1)

Baoji City (1)

Changji Hui Autonomous Pr (1)

Jingzhou City (1)

Dalian City (1)

Xingtai City (1)Lingwu (1)

Suining City (1)

China in 2016 is even more international than it was in 2014, and this globalisation is being driven by leading businesses such as the emerging global giants identified in this report.

Just over half of the 2016 ‘next global giants’ are new entrants, indicating the dynamism of competition and business emergence in China. Of the 2016 top 100 emerging global giants, 46 were in the 2014 top 100 ranking. In other words, roughly half the 2016 global giants have kept their place and just over half are new entrants into the ranking. Some notable companies dropped out of the 2016 ranking. This indicates that even highly successful businesses face challenges in sustaining high-level to hyper-level growth over a sustained period.

The geographical spread of businesses span across China, though major cities are well-represented, especially Beijing, Shanghai, Shenzhen and Wuhan (Table 1 and Figure 1). The top 100 companies were based in many different parts of China. Many headquarters are in China’s major cities or along the eastern coast, reflecting the extent of economic development in these parts of China. There appears, however, to be a shift southwards in the distribution of these emerging global giants. In the 2014 ranking, Shenzhen was the headquarters for seven such companies. In the 2016 report, the number there has risen to 11, and the number with headquarters in Beijing has fallen, from 17 to 13. This reflects the growing economic significance of Shenzhen, which is closely connected to Hong Kong and to the world economy.

Diversification continues for China’s next global giants

China in 2016 is even more international than it was in 2014, and this globalisation is being driven by leading businesses such as the emerging global giants identified in this report.

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6HIGHLIGHTSChina’s Next 100 Global Giants 2016 edition

Diversification continues for China’s next global giants

Different sectors are represented in the top 100, and the presence of services and intangible products in the top of the ranking points to an increasingly diverse economy and a move away from manufacturing and production (see Figure 2).

The computing and communication equipment industry was the most commonly represented sector in the top 100, with 21 of the top 100 in this category.

Broadly, the top 100 firms can be characterised as relatively large businesses measured by turnover, although there is variation in both size and growth rates.

Among the top 100, growth rates vary between 12% and 64%: annual levels of growth were measured over five years, demonstrating sustained performance and hyper-growth. This is especially impressive given further cooling of the Chinese economy in recent years to a national GDP growth rate of around 6%. In other words, the slowest growing of these companies was expanding at more than twice the national GDP growth rate and the fastest growing at 10 times national growth rates.

A common feature of almost all the top 100 businesses was a effective business model. Overall, the businesses’ managers demonstrated in-depth knowledge of the dynamics of their industries, as well as the needs of their customers. Strategies were clear and coherent, and there was evidence of strong management control of the businesses and their performance.

These businesses’ future growth prospects appear strong. If they sustain their growth rates, they will be competing against established giants both in China and in other markets.

Six Chinese businesses, Eternal Asia, a supply chain and logistics management company; Shanghai Fosun Pharmaceutical, pharmaceuticals and medical services company; Citrip, a travel company; Changyuan, a company specialising in electric vehicles and smart technologies; Home Inns, a leading budget hotel chain; and Han’s Laser Technology, a company focusing on advanced laser technology, are showcased in the report with an outline of what makes them the next businesses to watch out for in the coming years.

These companies have adapted to a less positive economic environment by developing counter-cyclical business models that have enabled them to grow very rapidly, even though demand has softened.

Figure 2: Industry sectors represented by China’s next 100 global giants

Transport equipment 1Paper & print 1

Computers & communications equipment 21

Chemicals 12

Electronics 10

Equipment & Machinery 8Metal & non-metal products 7

Pharmaceutical 6

Automobiles 3Education, healthcare & entertainment 3

Textiles & clothing 3

Business services 2Food & Beverage 2Furniture & wood 2

Hotels, restaurants & personal 2Instruments 2

Retail 2Rubber & plastics 2

Transport & logistics 2Wholesale 2

Internet & information 7

7HIGHLIGHTSChina’s Next 100 Global Giants 2016 edition

Diversification continues for China’s next global giants

2016 Rank

Change from 2014

Company name Score Revenue (mil. RMB)

Revenue growth

(2010-14)

Domestic dominance

Internat’l presence

Business model & strategy

Sector Location

1 1 Huapont Life Sciences Co. 222 4,867 63.4% 3 3 3 Chemicals & allied Chongqing

2 5 Hongfa Technology Co. 205 4,063 58.5% 3 3 3 Electronics Wuhan

3 2 Hangzhou Hikvision Digital Technology Co. 134 17,233 38.5% 3 2 3 Compt. & comm. eq. Hangzhou

4 new Zhejiang Unifull Industrial Fiber Co. 130 2,479 37.0% 3 3 3 Chemicals & allied Huzhou

4 new Sanan Optoelectronics Co. 130 4,580 41.0% 3 2 3 Compt. & comm. eq. Jingzhou

6 -5 Jiangsu Hengtong Photoelectric Stock Co. 121 10,444 34.7% 3 2 3 Electronics Suzhou

7 63 Shunfeng Intl Clean Energy 116 35,408 39.5% 3 2 2 Compt. & comm. eq. Wuxi

8 -5 Zhejiang Dahua Technology Co. 115 7,332 40.5% 2 2 3 Compt. & comm. eq. Hangzhou

8 new Bitauto Holdings 115 2,442 40.5% 3 1 3 Internet & information Beijing

10 new Suzhou Dongshan Precision Manufacturing Co. 113 3,524 35.8% 3 2 3 Metal & non-metal Suzhou

11 4 China Xd Plastics Co 107 6,844 37.6% 2 2 3 Chemicals & allied Harbin

12 1 Shenzhen Desay Battery Technology Co. 102 6,390 38.3% 2 3 2 Electronics Shenzhen

13 new 21vianet Group Inc 100 2,857 39.8% 2 1 3 Internet & information Beijing

14 7 Eternal Asia Supply Chain Management 97 22,098 30.9% 3 1 3 Business services Shenzhen

15 new Suzhou Jinfu New Material Co. 95 2,653 30.1% 2 3 3 Compt. & comm. eq. Suzhou

16 new Nanjing Xinjiekou Department Store Co. 90 7,825 38.5% 1 3 2 Retail Nanjing

17 -5 Ningxia Zhongyin Cashmere Co.Ltd. 87 3,104 24.8% 3 3 3 Textile & apparel Lingwu

17 new Tal Education Group 87 2,674 30.7% 3 1 3 Ed. & entert’n Beijing

19 new Accelink Technologies Co. 83 2,433 26.1% 3 2 3 Compt. & comm. eq. Wuhan

20 34 Shanghai Fosun Pharmaceutical Co. 83 12,026 23.7% 3 2 3 Pharmaceutical Shanghai

21 41 Ningbo Huaxiang Electronic Co. 82 8,713 26.0% 2 3 3 Automobiles Ningbo

21 new Shenzhen Tat Fook Technology Co. 82 2,451 27.4% 3 3 2 Compt. & comm. eq. Shenzhen

21 new Wolong Electric Group Co. 82 6,893 23.3% 3 3 3 Electronics Shangyu

24 -17 Zhejiang Wanfeng Auto Wheel Co. 80 5,535 22.9% 3 3 3 Automobiles Shaoxing

24 new Eging Photovoltaic Technology Co. 80 3,249 34.4% 2 2 2 Electronics Cixi

26 new Skyworth Digital Co. 77 3,502 21.9% 3 3 3 Compt. & comm. eq. Suining

26 3 Huayi Brothers Media Corporation 77 2,389 24.2% 3 2 3 Ed. & entert’n Dongyang

28 new Dalian Huarui Heavy Industry Group Co. 75 8,239 32.1% 2 2 2 Eq. & machinery Dalian

28 new Soufun Hldgs 75 4,331 26.6% 3 1 3 Internet & information Beijing

28 58 Alpha Group 75 2,430 23.6% 3 2 3 Paper, print & staples Shantou

31 new Ever-Glory Intl Group Inc 74 2,835 27.6% 2 3 2 Textile & apparel Nanjing

32 -6 Ctrip.Com Intl 71 7,297 22.3% 3 2 3 Transp’t & logistics Shanghai

33 23 Haining China Leather Market Co. 70 2,439 22.0% 3 2 3 Business services Jiaxing

33 new Apeloa Pharmaceutical Co. 70 4,233 29.8% 2 2 2 Pharmaceutical Dongyang

35 new Zhuzhou Times New Materials Technology Co. 67 6,008 21.0% 3 2 3 Rubber & plastics Zhuzhou

35 -18 Shenzhen Zowee Tech. Co. 67 3,587 33.3% 1 2 2 Compt. & comm. eq. Shenzhen

37 -31 Hosa International 66 7,497 26.5% 2 1 3 Textile & apparel Wanchai

38 new Shenzhen Deren Electronic Co. 65 2,635 23.1% 2 2 3 Compt. & comm. eq. Shenzhen

39 56 Xinjiang Zhongtai Chemical Co. 65 11,177 25.4% 2 2 2 Chemicals & allied Urumqi

40 new Suzhou Victory Precision Manufacture Co. 64 3,256 21.3% 3 3 2 Compt. & comm. eq. Suzhou

41 new Tianshui Huatian Technology Co. 63 3,305 27.2% 1 3 2 Compt. & comm. eq. Tianshui

41 -5 Beijing Tongrentang Co. 63 9,686 22.1% 3 1 3 Pharmaceutical Beijing

43 new Cpt Technology Co. 61 7,018 26.2% 1 3 2 Compt. & comm. eq. Fuzhou

43 new Yantai Jereh Oilfield Services Group Co. 61 4,461 40.4% 1 2 1 Eq. & machinery Yantai

43 new Cofco Tunhe Co. 61 8,939 30.4% 1 2 2 Food & beverages Changji

46 -29 Xi’an Longi Silicon Materials Co. 60 3,680 17.2% 3 3 3 Metal & non-metal Xi’an

47 new Jiangsu Huifeng Agrochemical Co. 59 2,429 29.3% 1 2 2 Chemicals & allied Yancheng

47 new Fujian Furi Electronics Co. 59 3,511 20.9% 2 2 3 Wholesale Fuzhou

47 33 Holitech Technology Co. 59 3,053 23.7% 1 2 3 Compt. & comm. eq. Zibo

50 -25 Jiangxi Black Cat Carbon Black Co. 58 6,168 18.4% 3 2 3 Chemicals & allied Jingdezhen

50 new Jiangsu Yangnong Chemical Co. 58 2,820 16.6% 3 3 3 Chemicals & allied Yangzhou

Table 1: China’s next 100 global giants

8HIGHLIGHTSChina’s Next 100 Global Giants 2016 edition

Diversification continues for China’s next global giants

2016 Rank

Change from 2014

Company name Score Revenue (mil. RMB)

Revenue growth

(2010-14)

Domestic dominance

Internat’l presence

Business model & strategy

Sector Location

52 new Leo Group Co. 56 2,874 21.1% 2 3 2 Internet & information Wenling

53 new Zhejiang Huahai Pharmaceutical Co. 55 2,585 20.8% 2 3 2 Pharmaceutical Taizhou

54 new Shenzhen Laibao Hi-Tech Co. 54 2,343 19.1% 2 2 3 Compt. & comm. eq. Shenzhen

55 -24 Changyuan Group 53 3,349 18.8% 3 1 3 Compt. & comm. eq. Shenzhen

55 -17 China Lodging Group 53 4,931 26.4% 2 1 2 Hotels Shanghai

57 -18 Fiberhome Telecommunication Technologies Co.

53 10,721 15.3% 3 2 3 Compt. & comm. eq. Wuhan

58 -22 Hollysys Automation Tech 52 3,213 22.4% 2 2 2 Instruments and other Beijing

58 new Tianma Microelectronics Co. 52 9,322 19.6% 2 3 2 Compt. & comm. eq. Shenzhen

60 -51 Anhui Zhongding Sealing Parts Co. 51 5,040 16.9% 3 3 2 Rubber & plastics Xuancheng

60 -9 Jiangsu Changjiang Electronics Technology Co.

51 6,428 14.6% 3 3 3 Compt. & comm. eq. Jiangyin

62 new Merry Garden Holdings 50 4,321 27.1% 1 3 1 Furniture & related Zhangping

62 -33 Shenzhen Mtc Co. 50 7,108 21.3% 1 3 2 Compt. & comm. eq. Shenzhen

62 new New Oriental Ed & Tech 50 7,683 17.6% 3 1 3 Ed. & entert’n Beijing

65 new Zhejiang Narada Power Source Co. 49 3,786 26.5% 2 2 1 Electronics Hangzhou

66 new Grinm Advanced Materials Co. 48 2,423 23.8% 1 2 2 Metal & non-metal Beijing

67 -52 Whirlpool China Co. 47 5,505 14.9% 3 2 3 Electronics Hefei

68 new Keda Clean Energy Co. 46 4,466 19.7% 3 1 2 Eq. & machinery Foshan

68 4 Zhongshan Broad-Ocean Motor Co. 46 4,443 17.4% 2 3 2 Electronics Zhongshan

70 -44 Lianhe Chemical Technology Co. 45 3,990 16.8% 2 3 2 Chemicals & allied Taizhou

70 new Jiangsu Zhongtian Technologies Co. 45 8,641 17.0% 3 2 2 Electronics Nantong

72 new Zhejiang Sanhua Co. 44 5,824 14.8% 3 3 2 Eq. & machinery Shaoxing

72 -14 China National Complete Plant Import 44 2,538 24.0% 1 3 1 Wholesale Beijing

72 -25 Homeinns Hotel Group 44 6,229 18.9% 3 1 2 Hotels Shanghai

75 -29 Sina Corp 43 4,734 13.7% 3 2 3 Internet & information Shanghai

75 new Zhejiang Supor Co. 43 9,535 12.2% 3 3 3 Metal & non-metal Hangzhou

77 new Humanwell Healthcare Co. 42 7,052 28.3% 2 1 1 Pharmaceutical Wuhan

77 -46 Qinchuan Machine Tool & Tool Group Co. 42 3,501 15.6% 3 2 2 Eq. & machinery Baoji

77 -34 Han’s Laser Technology Industry Group Co. 42 5,566 13.4% 3 2 3 Eq. & machinery Shenzhen

77 -5 Hubei Angel Yeast Co. 42 3,654 13.3% 3 2 3 Food & beverages Yichang

77 new Jinkosolar Holding Co 42 9,910 14.1% 3 3 2 Compt. & comm. eq. Shangrao

77 -21 Kingold Jewelry Inc 42 6,825 16.7% 2 1 3 Instruments and other Wuhan

77 new Bolina Holding Co 42 5,334 17.9% 2 2 2 Metal & non-metal Zhangzhou

84 -64 Zhejiang Dun’an Artificial Environment Co. 40 6,601 14.1% 3 1 3 Eq. & machinery Zhuji

85 new Zhongtong Bus & Holding Co. 39 3,612 13.9% 2 2 3 Automobiles Liaocheng

85 new Zhe Jiang Xinan Chemical Industrial Co. 39 7,716 14.8% 3 2 2 Chemicals & allied Hangzhou

87 new Longxing Chemical Industry Co. 38 2,438 13.4% 2 2 3 Chemicals & allied Xingtai

87 new Guangdong Vanward New Electric Co. 38 3,978 14.4% 3 2 2 Electronics Foshan

89 7 Sohu.Com Inc 37 10,310 22.7% 2 1 1 Internet & information Beijing

90 new Yihua Lifestyle Technology Co. 37 4,427 16.0% 1 3 2 Furniture & related Shantou

90 -18 Changyou.Com 37 4,654 18.6% 2 1 2 Internet & information Beijing

92 new Changshu Fengfan Power Equipment Co. 36 2,354 15.6% 2 2 2 Metal & non-metal Changshu

92 new Wuxi Baichuan Chemical Industry Co. 36 2,905 15.3% 2 2 2 Chemicals & allied Jiangyin

94 -32 E-Commerce Ch Dangdang* 35 7,903 29.8% 1 1 1 Retail Beijing

95 new Shenzhen Salubris Pharmaceuticals Co. 34 2,883 20.5% 1 1 2 Pharmaceutical Shenzhen

96 new Fujian Longking Co. 33 6,027 16.4% 2 1 2 Eq. & machinery Longyan

97 new Nanjing Redsun Co. 32 6,812 13.9% 2 2 2 Chemicals & allied Nanjing

97 new Avic Aero-Engine Controls Co. 32 2,576 13.6% 3 1 2 Other Transp’t eq. Zhuzhou

97 -64 Sinoma Science & Technology Co. 32 4,424 13.9% 3 1 2 Metal & non-metal Nanjing

97 new Cosco Shipping Co. 32 7,663 14.7% 3 2 1 Transp’t & logistics Guangzhou

9HIGHLIGHTSChina’s Next 100 Global Giants 2016 edition

Diversification continues for China’s next global giants

PI-HIGHLIGHTS-CHINA-GLOBAL-GIANTS

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