11 Most Profitable Companies in China

Published on January 25, 2017 at 9:13 am by Sneha Shah in Lists, News

Do you know which companies are the 11 most profitable companies in China? China has become the second-largest economy in the world with a GDP of over $11.4 trillion and it continues to be one of the fastest-growing large economies, with a GDP growth rate in excess of 6.5%. The country also has the world’s largest population and is the biggest exporter as well. The massive growth that China has seen in the last few decades has helped its domestic companies become some of the biggest companies in the world. With over 1 billion Chinese consumers, many of these companies have become massively profitable by selling mostly in their home market. And with exponential growth in revenue has come rapid growth in profits as well, with some of the most profitable companies in the world being Chinese.

The 11 most profitable companies in China are dominated by banking and insurance companies, with a couple of telecom and internet companies in there for good measure. The banking sector in China is heavily protected and most banks are owned by the state. With high entry barriers and a relatively large competitive moat, Chinese banks are generating billions of dollars in profits every year. Industrial and Commercial Bank of China is the most profitable company in China and the second-most profitable company in the world with annual profits exceeding $44 billion.

Some analysts dispute the profitability of the State Owned Enterprises (SOE), as they think that the non-performing assets (NPA) level of the Chinese financial system is much higher than what is reported. If these bad assets are recognized, then the profits of the banks would be much lower. Besides Chinese banks, Alibaba Group Holding Ltd (NYSE:BABA) is a notable member of the list, being the only Internet company. A key thing to note about the most profitable Chinese companies is that these companies are heavily dependent on the Chinese economy and should the economy suffer from a hard landing, then the profits could become much lower. Large U.S companies such as Apple Inc. (NASDAQ:AAPL) on the other hand generate a high percentage of their sales and margins from outside the U.S market and would suffer less from a slowdown in the U.S economy.

In this article we’ll present the list of the 11 most profitable companies in China based on the profit they generated in fiscal year 2015, as reported by Forbes. It is interesting to see that the top four Chinese banks rank in a row after Apple, which was the most profitable company globally with $53 billion in profit.

After checking out the list, don’t miss our list of The 10 Most Innovative Companies in China.

11. Industrial Bank – $8 billion

With reported profit of $8 billion, Industrial Bank ranks 11^th on the list of most profitable companies in China. The bank’s business activities can be broadly classified into personal, corporate and institutional banking. The bank was founded in 1988 and has its headquarters in Fuzhou, China. Industrial Bank’s profit was the result of $45 billion in revenue.

10. Shanghai Pudong Development – $8.1 billion

Headquartered in Shanghai, the Shanghai Pudong Development bank is a commercial bank with 30 branches and offices. The bank offers various personal banking, wealth management, lending, online payment and consumption, and corporate banking services. Shanghai Pudong Development Bank Co., Ltd. was incorporated in 1993 and employs more than 48,000 people today.

9. Ping An Insurance Group – $8.7 billion

Also known as Ping An (literal meaning: safe and well) of China, the company provides insurance, banking, and financial services. It is the second-largest insurer in China. Starting as a casualty insurance company in 1988, the group has been growing and diversifying into financial services like banking and investment since then. The bank reported profit of $8.7 billion on sales of $98.7 billion for the 2015 fiscal year.

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8. China Merchants Bank – $9.2 billion

The bank ranks 8^th on the list, with reported earnings of $9.2 billion. China Merchants Bank was founded on March 31, 1987 and is headquartered in Shenzhen, China. It is the first commercial bank in which corporate legal entities held 100% ownership. The bank provides personal and corporate banking services through its 500 branches in China.

7. Bank of Communications – $10.6 billion

Bank of Communications is amongst the top-5 leading commercial banks in China and has over 2,800 branches in more than 80 major cities. Apart from China, the bank has operations in leading financial hubs like Hong Kong, New York, Singapore, Tokyo, and London. It operates through four business segments: corporate, retail banking, treasury, and other. The bank reported profit of $10.6 billion for fiscal year 2015.

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6. Alibaba Group Holding Ltd (NYSE:BABA) – $11 billion

Alibaba Group is the largest e-commerce player in China. The tech giant is well-known over here for having the largest IPO valuation in the world so far. The company reported profit of $11 billion on revenue of just $15 billion for its FY2015. Alibaba has a market cap of $243 billion through its businesses which include Taobao Marketplace, Tmall.com, Alibaba.com, Alibaba Cloud Computing, and Alipay. Jack Ma founded the website in 1999 and it is headquartered in Hangzhou, China.

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5. China Mobile Ltd. (ADR) (NYSE:CHL) – $17.1 billion

China Mobile is the leading mobile services provider in Mainland China and controls 70% of the Chinese mobile market. Its number of subscribers reached 835 million in May 2016, up from 807 million at the end of 2014. Incorporated in 1997, China Mobile has dominated Chinese mobile services since its foundation. The company is state-owned and like many Chinese companies enjoys protectionist benefits from its government. China Mobile reported profit of $17 billion on revenue of $107 billion for FY2015.

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4. Bank of China – $27.2 billion

Bank of China ranks sixth on the Forbes Global 2000 list and is one of the five-largest commercial banks in China. Founded in 1912, the bank is headquartered in Beijing, China. The bank provides personal, corporate, and investment banking; as well as treasury, insurance and other services. Bank of China has operations in 27 countries and is the second largest lender in China. Most of its revenue comes from its operations in China. The bank reported profit of $27.2 billion on revenue of $122 billion for its fiscal 2015 year.

3. Agricultural Bank of China – $28.8 billion

Agricultural Bank Of China Ltd. is also one of the four-largest banks in China, and is listed on both the Hong Kong and Shanghai Stock Exchanges. The bank came into being in 1951 and today has 320 million retail customers, 2.7 million corporate clients, and nearly 24,000 branches. The bank also made a big bang with a large IPO ranking amongst the top-3 largest IPO valuations ever. The bank operates through its branches in China, Hong Kong, London, Tokyo, New York, Frankfurt, Sydney, Seoul, and Singapore. Last year the bank was caught violating New York State’s anti-money laundering law, for which it agreed to pay a $215 million penalty.

2. China Construction Bank – $36.4 billion

The bank operates regionally and internationally through its many branches, and ranked as the sixth-largest company in the world in 2015. Founded in 1954 and headquartered in Beijing, the bank provides financial and banking services. The bank reported profit of $36 billion on sales of $147 billion for its 2015 fiscal year. It became the first Chinese bank to help fix silver prices by participating in the London silver price fix in 2016.

1. Industrial and Commercial Bank of China Ltd. $44.2 billion

Ranking first on the list of the 11 most profitable companies in China is ICBC Bank, with profit of $44 billion on revenue of $171 billion in fiscal 2015. The bank also ranked first on the Forbes Global 2000 list of the world’s biggest public companies in 2015. The company was founded in January 1984 and is headquartered in Beijing. It is one of the four largest state-owned commercial banks in China and operates primarily through its treasury, corporate and personal banking business segments.