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.