Small and medium sized companies from China have dominated the "Best Under a Billion" list released by Forbes this year. The list highlights 200 of the best performing companies with revenues between 5 million and 1 billion US dollars in the Asia-Pacific region in the past year. For more on this, we are joined in the studio by my colleague Wu Haojun.
Q1: Just exactly who are these Chinese SMEs excelling even during tough times for the global economy?
A: These companies actually hail from a wide range of sectors..but they do have one thing in common..that's resiliency during tough times. A record number of 98 small and medium-sized companies from the Chinese mainland, Hong Kong and Taiwan combined have made it to the list this year.
In the last year, while many businesses, small and large, are struggling through a tough global economic recovery, these 98 Chinese companies grew an average 80% to produce 31 billion US dollars in revenue and 7 billion dollars in profit. While 54 of them are making their debut on the Forbes list, these companies are certainly no one hit wonders. The average age is 17 years old and on average have been publicly traded for 8 years.
Now these companies may not be the heavyweights in their respective fields yet, but they are certainly fast growing to become one. This year marks the fifth time the human plasma-based bio-pharmaceutical company China Biologic Products has made it to the list. Analysts are attributing its success to increased healthcare spending in China driven by aging demographics.
Meanwhile the Taiwan-based Topbi, a children's clothing maker, is expecting even better times ahead as the mainland ended its one-child policy. So for these companies, their stories of success are varied but they all come from what the consumers need and want.
Q2: We know the list represents a good cross-section of different sectors but is there one sector doing particularly well?
A: Yes and it shouldn't be a surprise that it's the information technology sector. The IT sector, including hardware, software and semiconductor businesses, dominates the list with 56 companies. These players experienced an average 53% growth in sales versus 36% growth last year. And of the 56 companies, 29 are Chinese.
Analysts say this reflects the country's policy to innovate and develop its own IT infrastructure. Here are just a few examples...there's Beijing Orient National Communication Science & Technology, which provides software and information technology services ranging from mobile application and data analysis.
Fujian Newland Computer, which provides service and application products in data identification and electronic payment. It's important to note that the vast majority of the Chinese companies on the list are by no means household names here in China. But who knows what they can grow into 5 or 10 years down the road?
