On January 20, Barron's Chinese edition released the list of "Top 50 Chinese Companies with Market Capitalization Growth in 2021".
Once a year, we select 50 companies with outstanding market capitalization from Chinese companies listed and traded on the global stock market. The perspective of "Chinese companies" that breaks the barriers of market regions intends to observe the annual ups and downs of Chinese companies under the global investment pattern.
This list comes from a weighted comprehensive ranking of three objective data such as the company's total market capitalization at the end of the year, the annual total market capitalization change, and the annual stock price increase or decrease (see the appendix at the end of the text for details of the method). We value the "market capitalization" indicator more than the "stock price" and "stock price increase", because it is a more comprehensive and condensed reflection of the increase in the competitive position of the selected companies in their industries. From this, we not only look back at the main line of market trends in the past 12 months, but also see the exception flashes of the main line consensus.
Among the top 50 Chinese companies with market capitalization growth in 2021, the A-share listed companies in Shanghai and Shenzhen accounted for up to 47 seats (including 1 company listed in London at the same time), and the number of companies listed in Hong Kong reached 15 (including 8 A+H listed companies), and only 1 company was listed on the New York Stock Exchange and has returned to Hong Kong for listing at the same time. The decline of the US stock market and the relative increase in the importance of the Hong Kong market are so clearly visible.
Energy transformation is the absolute theme of market capitalization growth in 2021.
In power, batteries, battery chemicals, energy metals, coal, photovoltaics, new energy vehicles... And in many other interrelated and intertwined fields, a series of companies continue to attract capital inflows. Among the top 50 companies in the annual ranking, there can be as many as 33 companies related to the broad sense of the theme of "carbon peak" and "carbon neutrality"; in the top 25, there are as many as 20 related companies.
Correspondingly, many of the stronger companies in 2020 experienced a dark year in 2021, and the Internet, medical and consumer stock companies suffered major systemic setbacks. Among the top 50 companies in 2020, only 7 companies have been included in this list for the second consecutive year, namely CATL, BYD, Shanxi Fenjiu, Great Wall Motor, China Merchants Bank, Oriental Fortune and Xiaopeng Automobile.
The encounters of the top 50 companies remind us of the double-edged significance of the market capitalization growth indicator in the forward dimension. In a specific cycle and boom evolution, under the pressure of the company's valuation and market game, investors need to always be aware and regularly assess whether there is a risk of sharp changes in the growth environment of excellent companies.
The Chinese edition of Barron's magazine argues that the "Top 50 Chinese Companies with Market Capitalization Growth in 2021" indicates a change in the era of production and lifestyle. In the new year, the theme of double carbon will still lead the overall direction of the market in a disciplined manner, and companies with excellent fundamentals will still reap considerable growth from it, but the specific context and content will not be a simple continuation of the past year.
In the list of selected and absentees, there are still opportunities and risks. As you can already see, in early January, some companies' stock prices have retraced significantly. There is no doubt that we need to re-understand what "sustainable investing" means. Continuous observation of the evolution direction of population, energy, industry and technology structure, and full research on macro policy orientation, are prerequisites for correctly opening the list of market value growth.
Below is the full list, as well as a brief review of important companies.
1. The dance of the certainty of new energy vehicles
CATL ranked 3rd in 2020 and rose to 2nd place in 2021. BYD ranked 8th last year and 15th this time. In February and March last year, the magazine wrote articles analyzing the medium- and long-term growth potential of CATL and BYD, and in the following nine to ten months, the market value of the two companies reached 1.6 trillion yuan and 970 billion yuan respectively. Another power battery company, Ewell Lithium Energy, ranked 23rd on the list.
Great Wall Motors represents the strong trend of domestic hybrid vehicles in the transition cycle; the mileage and the high price comparison of independent brands make this type of car company have a stronger logic. The company achieved cumulative sales of 1.281 million units in 2021, a record high, with new energy vehicle sales accounting for more than 10%; but on the other hand, its stock price has fallen sharply since October last year, so far retraced by 35%, and its Euler brand has experienced a "core door" event that damages consumer reputation; in the future, the proportion of its new energy models and the success or failure of high-end models are worth tracking. Another automaker that has attracted much attention is Xiaokang Shares, which ranks 35th.
Xiaopeng Automobile is the only U.S. stock selected this time, and it is also the only company that is a "new force in car manufacturing". It delivered well last year and improved gross margin significantly. Barron's Reported on January 13 that Wall Street analysts have recently taken a positive attitude towards Weilai, Xiaopeng and Ideal. Earlier, Barron's article in November 2021 expressed its preference for Xiaopeng and pointed out that the number of models and the growth rate were key considerations.
In the field of energy metals and battery materials, the list includes Tianqi Lithium, Ganfeng Lithium, Enjie Shares, Putailai, Tianci Materials, Zhongwei Shares and many other companies, which are in lithium resources, lithium battery diaphragms, anode materials, electrolytes, precursors and other subdivisions, in almost every important link of the industrial chain, all reflect the high industry prosperity.
Looking back at the past two years, the unquestionable long-term certainty of new energy vehicles has been fully and advanced, so it has faced the problem of "overdraft" in the short and medium term; the market has been arguing about the valuation of the industry's leaders for a long time, and the differences in attitudes and game risks have begun to intensify.
However, the Chinese edition of Barron's Weekly still believes that Ningde Times and BYD, as the two leaders of China's new energy vehicles, have a high-quality forward-looking layout of the whole industry chain, and the foundation of corporate growth rate is solid and broad; investors should be wary of the company's stock price volatility, but their long-term growth is still worth looking forward to. The latest news is that CATL released its power exchange brand EVOGO on January 18.
2. The silicon path of light
Photovoltaics is another strong theme, taking the 4th to 6th places on this list.
Trina Solar, the company's market capitalization surged from less than 50 billion yuan at the beginning of 2021 to more than 160 billion yuan at the end of the year, and the annual stock price rose by more than 240%. In PV-Tech's latest "2021 Global PV Module Suppliers Top 10", the top of the list is LONGi Shares, Trina Solar ranks second, and JA Technology ranks third. JA Technology ranked 13th in the "Top 50 Chinese Companies with Market Capitalization Growth in 2021", with a market value increase of more than 140 billion yuan; LONGi ranked 18th in this list, with a market value of more than 420 billion yuan so far. The rise of trina solar's market value is a concrete embodiment of the accelerated expansion of photovoltaic large-size module applications and production capacity.
Hesheng Silicon ranked 5th. The company is the global dual-ingredient leader in industrial silicon and silicone, and institutional analysts are generally optimistic that it can consolidate its leading position and gradually get involved in downstream high-value-added products. On January 12, the company issued a pre-increase announcement for 2021 annual results, and it is expected that the net profit attributable to the mother for the whole year will increase by 505.28% year-on-year to 519.52%.
In addition, Zhonghuan Co., Ltd. and Jingsheng Electromechanical ranked 38th and 41st in the list respectively.
Sunshine Power, the leader in the field of photovoltaic inverters, ranked 6th in this list. A January research report by UBS Securities bullish on the company's leading position in the inverter competition landscape believes that the energy storage business will become another engine of its long-term growth.
Foster, ranked 33rd on this list, comes from the relatively low-key photovoltaic film industry. In 2020, the company's global market share reached 54%, ranking first in the industry, and its product gross margin and capacity utilization rate are significantly ahead of its peers. In 2021, Foster's full-year share price rose by more than 80%.
At the end of 2021 and the beginning of 2022, in the context of relatively saturated production capacity, the market is worried about the profitability of the photovoltaic industry, and the overall valuation correction of the sector has occurred; if this process continues to deepen, then under the premise that the economics of photovoltaic projects are further improved, and the industry policy and company fundamentals have not deteriorated, investors may once again get the opportunity to allocate leading enterprises in the industry.
3. Power generators
The "Top 50 Chinese Companies with Market Capitalization Growth in 2021" also gathered as many as 8 power related companies. What they have in common is that they are all related to new energy power generation or the green transformation of the traditional power industry.
Ranked 7th, Three Gorges Energy is a new energy operator of The Three Gorges Group, with the strategic vision of "Offshore Wind Power Leader", and its offshore wind power projects are leading the industry in installed capacity and projects under construction. Three Gorges Energy's full-year share price increase in 2021 is close to 100%. At the same time, Huaneng International, Longyuan Power, China Resources Power, Yangtze River Power and other three power generation enterprises ranked 14th, 20th, 21st and 32nd in the list respectively. Among them, Hong Kong stock Longyuan Power is expected to be listed on A-shares in the near future. The january 10 research report of UBS Securities reiterated its positive views on Chinese-funded renewable energy operators, and judged that China Resources Power and Longyuan Power were the first choice in the industry, judging that they may have a number of positive catalysts such as thermal power price increases, the development of China's carbon trading market, and green electricity prices.
Ranked 9th, NARI is a leading enterprise in the field of smart grids, with business segments such as power grid automation and industrial control, relay protection and flexible transmission, power automation information and communication, power generation and water conservancy and environmental protection. The certainty and structural prosperity of the new power system reform during the "14th Five-Year Plan" period directly promoted the company's market value growth.
China's nuclear power ranks 25th. The company's nuclear power generation reached 173.1 billion kWh in 2021, an increase of 16.71% year-on-year. At the same time, its new energy power generation reached 9.5 billion kWh, an increase of 68.69% year-on-year. The two-wheel drive of "nuclear power + wind and solar" is currently optimistic about institutional analysts. CITIC Securities' research report at the end of December last year believed that nuclear power will fully benefit from the new changes in the electricity market environment, and the transaction price of electricity in the nuclear power market is expected to move from discount to premium, which will help the company expand ROE and release performance flexibility.
China Power Construction ranked 27th, and the company's market capitalization growth in 2021 is mainly due to its leading position in the field of water conservancy and hydropower projects, as well as the acceleration of pumped energy storage construction. In early January 2022, the company just announced the asset replacement and related party transaction plan with the group, completely divesting its real estate development business; the research report of Tianfeng Securities pointed out that the significance of this move is to significantly alleviate the company's refinancing restrictions, or will provide support for high-intensity investment in the layout of wind and photovoltaic power assets.
4. The king of rare earths
However, the top of the list of "Top 50 Chinese Companies with Market Value Growth in 2021" is not the Ningde era, but the northern rare earth. For the full year last year, its stock price rose as much as 251%.
Northern Rare Earth is the world's largest supplier of light rare earths, with an integrated layout of "upstream resources - midstream smelting - downstream functional materials"; its controlling shareholder has the exclusive mining right of Baiyun Obo Rare Earth Mine, the world's largest reserve; the company's rare earth ore quota and smelting separation quota, which also ranks first in the industry for many years. According to the 2021 performance forecast released by the company, it is expected to achieve a net profit attributable to the mother of 4.901-5.061 billion yuan for the whole year, an increase of 488.58% to 507.79% year-on-year.
Driving the northern rare earth to the top of the 2021 annual list is the huge and strong, fresh and long-term demand for rare earth permanent magnet materials, which is still closely related to the development trend of new energy vehicles, industrial motors, wind power generation, and robots in the context of global double carbon. CITIC Securities' series of reports on magnetic materials believes that the future increase in the supply of high-performance NdFeB may be mainly concentrated in China. Northeast Securities' view is that "rare earth core assets with global pricing power are ushering in value revaluation opportunities." ”
In early January 2022, Northern Rare Earth signed a contract with Baosteel For the supply of rare earth concentrates, which ranked 17th in this list as a representative of the steel industry.
other
The supply chain shortage in 2021 is reflected in the annual ranking of COSCO Shipping Holdings at no. 3; another shipping company, Orient Overseas International, ranks 28th. The Maritime Review 2021 released by the United Nations Conference on Trade and Development (UNCTAD) points out that in the face of the disruption of the new crown epidemic, maritime trade has bucked the trend and performed better than expected. In addition to the economic recovery and the release of pent-up demand, the reasons for the rebound in trade flows include massive stimulus packages and increased consumer shopping spending, particularly in the United States, where e-commerce is expected to grow by 4.3 per cent, while UNCTAD expects this growth rate to slow to 2.4 per cent in 2022-2026.
The real estate industry experienced an irreversible cycle switch last year, which led to another direct change: the financial attributes of real estate were significantly suppressed, the intention of high-net-worth people to withdraw from real estate was obvious, and the proportion of equity asset allocation was expected to increase; this structural change was widely believed to bring new opportunities in the wealth management industry. We see that the three financial companies that entered this list also reflect this trend, China Merchants Bank ranked 39th, its retail financial advantages are still prominent, and the construction of a large wealth management system has begun to show results. Orient Wealth ranked 16th, relying on the high-quality traffic of its retail securities business, has driven significant growth in its wealth management business. GF Securities, ranked 29th, also performed strongly in the wealth management sector in 2021.
After a year of low consumer stocks, we were slightly surprised by the selection of two liquor companies and a beverage company. Shede Liquor and Shanxi Fen liquor ranked 46th and 47th respectively in the list, and in 2021, the former's annual stock price increased by 166% after Fosun Group settled in, and the latter, as a fragrance leader, achieved leapfrog development in performance. Dongpeng Beverage ranked 49th, representing the growth of the scale of the functional beverage segment.
In addition, companies such as Katazai, North Huachuang, Li Ning, Sunny Optical Technology, Weier Shares, Goertek Shares, CITIC Shares, Wantai Biotech, oriental Shenghong and other companies have also become representatives of their respective subdivisions or types.
We hope that this list will help you outline and review the market landscape and structure of the previous year. In the list of inductees and absentees, opportunities and risks still coexist. Careful observation of the dynamics of population, energy, industry, and technological structure evolution direction, cycle, and node is a prerequisite for correctly opening this list of market capitalization growth.
Text | Barron's Chinese edition
Edit | Su Hao, Kang Juan
Appendix: Ranking Methods
Barron's Chinese edition of "Top 50 Chinese Companies with Market Capitalization Growth" screens Chinese stocks listed and traded on the A-share market, Chinese stocks listed and traded on the Hong Kong stock market, Chinese stocks traded on U.S. stock markets such as the New York Stock Exchange and NASDAQ, and Chinese stocks listed and traded on global stock markets such as Singapore, London, Germany and South Korea. The data examines the performance of three objective data indicators of Chinese listed companies: the total market value at the end of the period, the change in the total market value of the range, and the rise and fall of the range stock price. The "Top 50 Chinese Companies by Market Capitalization Growth" first ranked the above three data separately, and reordered the rankings of the three rankings after weighting the average, and the weight of the indicator was 3: 4 : 3. If the weighted ranking data is the same, companies with a higher total market capitalization at the end of the year will receive a higher ranking. This ranking method focuses on the company's market capitalization indicators rather than on stock prices. The "Top 50 Chinese Companies by Market Capitalization Growth" places more emphasis on high-growth companies with systemic importance in the industry.
"Top 50 Chinese Companies by Market Capitalization Growth", independently compiled by Barron China based on publicly available data. The data source is WIND. The market capitalization of listed companies from the U.S. and Hong Kong stock markets is converted to RMB denomination at the top of the ranking, using the RMB/USD exchange rate and the RMB-Hong Kong dollar exchange rate on the start and closing dates of the range respectively.
(This article is for your informational purposes only and does not constitute the provision or reliance of investment, accounting, legal or tax advice.) ）