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10 Largest China Companies That We Can Invest In Today

Even with greater uncertainties, it’s hard to completely ignore Chinese companies.


China’s economy has been on a nearly 40-year growth tear. A recent Forbes article reported that within a single generation, its GDP per capita, after adjusting for inflation, was 17 times higher than it was during 1980.

In that time, China has also grown from a third-world nation into a global super-power. Boasting the second-largest economy today, China is poised to wrestle the top spot from the U.S. by 2028. Despite COVID-19 hammering the global economy, China remained the only major economy to register growth in 2020.

Chinese companies have been the backbone and main beneficiaries of this growth over the decades. Unlike the 1980s, Chinese brand names today do not look out of place beside their global peers.

In this article, we look at the 10 largest Chinese companies that we can invest in today. Not all Chinese companies are listed in China – perhaps due to the closed-off nature of its capital markets.

#10 Wuliangye Yibin (SZSE: 000858)

Market Capitalisation: US$156 billion

Listing Status: Shenzhen Exchange (SZSE)

Year-to-date Performance: -10%

5-year Performance: 620%

This wasn’t a brand we were terribly familiar with ourselves. Quick research revealed that this popular Chinese baijiu maker was listed more than 20 years ago, and is the second most valuable baijiu brand in China – behind Kweichou Moutai in 3rd spot.

Baijiu is the most popular alcoholic drink in China, and with its sheer population, very likely in the world. Wuliangye Yibin is the second-largest baijiu maker in China. With China’s rising affluence and growing middle-income population, consumption of baijiu will likely only grow.

Read Also: How To Invest in The China Market Using A Robo Portfolio

#9 China Merchants Bank (SSE: 600036) (HKG: 3968)

Market Capitalisation: US$193 billion

Listing Status: Shanghai Stock Exchange (SSE); Hong Kong Stock Exchange (HKEX)

Year-to-date Performance: 16%

5-year Performance: 200%

Anyone remotely familiar with investing in China would have heard of China Merchants Bank. Founded in 1987, it has over 1,800 branches worldwide and features regularly on the Fortune Global 500 list.

China Merchants Bank employs over 70,000 people in its diverse operations spanning commercial banking, financial leasing, fund management, life insurance and investment banking.

#8 Contemporary Amperex Technology Limited (CATL) (SZSE: 300750)

Market Capitalisation: US$200 billion

Listing Status: Shenzhen Exchange (SZSE)

Year-to-date Performance: 35%

5-year Performance: 930%

A global leader in lithium-ion battery manufacturing, CATL is operating within a highly exciting EV space. According to its website, it is ranked no. 1 globally for EV battery consumption volume for four consecutive years (by SNE Research).

Apart from its strong Chinese presence, it also has a global footprint spanning Japan, Germany, France and the USA. According to various online sources, its client list includes Tesla, BMW, Daimler, Honda, Toyota, Volkswagen and Volvo.

#7 China Construction Bank (CCB) (SSE: 601939) (HKG: 0939)

Market Capitalisation: US$210 billion

Listing Status: Shanghai Stock Exchange (SSE); Hong Kong Stock Exchange (HKEX)

Year-to-date Performance: 4%

5-year Performance: 27%

Another major Chinese bank, CCB is listed on both the Hong Kong and Shanghai stock exchanges. The bank employs over close to 350,000 people at its 14,741 banking outlets. CCB has a presence covering 31 countries and regions globally – making it a global bank.

CCB is the second largest bank in China, and similar to Wuliangye Yibin, this also makes it the no. 2 biggest bank in the world.

#6 Ping An Insurance Group (SSE: 601318) (HKG: 2318)

Market Capitalisation: US$211 billion

Listing Status: Shanghai Stock Exchange (SSE); Hong Kong Stock Exchange (HKEX)

Year-to-date Performance: -30%

5-year Performance: 84%

Established in 1988, Ping An is world-leading financial services group. It was also the first financial institution in China to have foreign investors – with Morgan Stanley and Goldman Sachs becoming shareholders in 1994.

Ping An’s business is not only in insurance, but also in banking and asset management. Ping An has also developed financial services, health care, auto services and smart city ecosystems for its clients.

Read Also: 5 Things You Need To Know About The Lion-OCBC Securities Hang Seng TECH ETF Before Investing In It

#5 Meituan (HKG: 3960)

Market Capitalisation: US$219 billion

Listing Status: Hong Kong Stock Exchange (HKEX)

Year-to-date Performance: -5%

5-year Performance: 287%

China’s Meituan is an e-commerce platform providing food delivery, transportation, travel, shopping and entertainment. According to its website, its business comprises over 200 service categories, including catering, on-demand delivery, car hailing, bike-sharing, hotel and travel booking, movie ticketing and other entertainment and lifestyle services across China.

Due to the high-profile removal of DiDi Global’s app from app stores, Meituan relaunched its ride-hailing platform to grow its user base by highlighting its commitment to data protection.

#4 Industrial & Commercial Bank of China (ICBC) (HKG: 1398)

Market Capitalisation: US$250 billion

Listing Status: Hong Kong Stock Exchange (HKEX)

Year-to-date Performance: -17%

5-year Performance: 12%

Another bank that needs no introduction, ICBC is the biggest bank in China with 680 million retail customers and over 8 million corporate customers. This also makes it the biggest bank in the world with over US$4 billion in assets.

ICBC also regularly features as the top bank in the world in various lists such as Top 1,000 World Banks, Global 2,000 by Forbes and Fortune’s Global 500.

#3 Kweichow Moutai (SSE: 600519)

Market Capitalisation: US$396 billion

Listing Status: Shanghai Stock Exchange (SSE)

Year-to-date Performance: -1%

5-year Performance: 521%

China’s most valuable non-technology company, Kweichow Moutai is also the world’s largest distillery and most valuable listed beverage company. Producing baijiu, the alcohol of choice in China, Kweichou Moutai has also likely benefitted from less external travel due to COVID-19 and rising patriotism for Chinese brands.

Disregarding companies not listed in China – i.e. the next two entries which are listed in Hong Kong and the U.S. – Kweichow Maoutai would be considered the most valuable listed company in China.

#2 Alibaba Group (NYSE: BABA); (HKG: 9988)

Market Capitalisation: US$658 billion

Listing Status: New York Stock Exchange (NYSE); Hong Kong Stock Exchange (HKEX)

Year-to-date Performance: -14%

5-year Performance: -1%

This company needs no introduction. It’s businesses span e-commerce, grocery chains, food delivery, video streaming, logistics, cloud infrastructure and more. Unfortunately, one of the major talking about for Chinese businesses is the fact that Ant Financial’s much-hyped IPO was pulled at the last minute by the Chinese authorities.

Alibaba’s shares were also hit during the recent round of tightened measures the Chinese authorities intend to place on foreign-listed businesses. Due to this double whammy, Alibaba’s share price suffered, even though its operations have continued to run relatively smoothly.

#1 Tencent Holdings (HKG: 0700)

Market Capitalisation: US$774 billion

Listing Status: Hong Kong Stock Exchange (HKEX)

Year-to-date Performance: -6%

5-year Performance: 191%

Tencent is the most valuable Chinese business today – after the hits taken by Alibaba in 2020 and 2021.

The most well-known of its businesses is its WeChat super app. On top of this, Tencent has its hands in numerous businesses, including gaming, fintech, video streaming, music, cloud infrastructure and many more.

Read Also: Understanding Tencent (HKG: 0700) – The All-In-One Chinese Technology Stock

Investing In The Biggest Chinese Companies In The World

With the Chinese economy set to become the biggest in the world in the next decade, we can only expect its companies to similarly continue growing. While we can see that the 1-year returns can fluctuate from company to company, they are generally growing in the past 5 years.

The biggest economy in the world should ultimately house some of the biggest companies in the world – and it won’t be a surprise if a Chinese company becomes the biggest company in the world in the coming years.

While the longer-term looks bright for Chinese investments, we are also seeing heightened regulatory restrictions on Chinese companies in recent weeks affecting the share price. Alibaba (with its shelved Ant Financial IPO) and DiDi Global (having to remove as many as 25 of its apps from app stores) are just two of the most well-known cases. But, the Chinese government has recently said it will tighten rules on foreign-listed China companies.

When trying to invest in the Chinese growth story, we may not know where to start or which companies to invest in (or not invest in). That’s normal. And that’s also why we’re working with SGX to bring organise the SGX x DollarsAndSense ETF Symposium 2021 from 15 July to 17 July 2021 – a free Facebook Live event packed with content from industry practitioners.

Specifically, on Day 3 – 17 July 2021 (Saturday) from 12 pm to 1.30 pm – you can learn about what industry experts and fund managers think about investing in China.

  • 12 pm – 12.30 pm: Investing In The Post-COVID-19 World: How Long More Can The Chinese Growth Story Continue?
    • Tommy Xie, Economist for Treasury Research & Strategy at OCBC Securities
  • From 12.30 pm – 1 pm: My Experience As A Fund Manager Investing In China
    • Goh Tee Leng, an experienced fund manager in the Chinese market will be sharing
  • 1 pm to 1.30 pm: Panel Discussion: Could A Chinese Listed Company Be The Biggest Company In The World One Day?
    • I will be grilling Tee Leng and Lim Yuin, the Chief Investment Strategist at Lion Global Investors (along with questions you can send in via Pigeonhole) in a discussion

 

Read Also: Investing In China: Here Are 4 Different Ways You Can Get Investment Exposure

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