In 2023, influenced by factors such as interest rate hikes in Europe and the United States, geopolitical risks, and uncertain economic prospects, global stock markets experienced increased volatility and greater differentiation. Despite this, new themes continued to emerge, and numerous leading companies rose to prominence.
According to data from the 21 Data Journalism Lab, as of December 31, 2023, there were a total of 8,759 listed Chinese companies (excluding delisted companies) on 16 major global exchanges in Shanghai, Shenzhen, Beijing, Hong Kong, New York, and others. This marked an increase of 104 companies compared to the previous year. The total market capitalization was CNY 121.44 trillion, roughly unchanged from 2022.
Amidst the turmoil in the capital markets, the list of the top 500 Chinese companies by market capitalization also experienced significant changes. The latest ranking by the 21 Data Journalism Lab reveals that the number of trillion-yuan market cap companies has increased to 11. The top 20 positions saw notable changes, with 76 new entrants, including 8 companies that went public in 2023.
Changes in the Top 20: Pinduoduo closely chasing Alibaba, Meituan falls out of the top 20
In 2023, the overall performance of the capital market was under pressure, leading to a slight pullback in the market capitalization of the top 500 companies.
According to the 21 Data Journalism Lab, the total market capitalization of the latest top 500 companies was CNY 72.8 trillion, a 3% decrease compared to the previous year. The entry threshold continued to decline, dropping from CNY 399.96 billion at the end of 2022 to CNY 367.91 billion, an 8% YoY decrease. Xinyi Solar (0968.HK) fell 208 places in the rankings compared to the previous year.
Compared to the end of 2022, 254 companies in the top 500 experienced varying degrees of decline in market capitalization, including 8 companies such as Li Ning (2331.HK), China Duty Free (601888.SH), Tianhe Power (688599.SH), Zhongsheng Holdings (0881.HK), Enjie Group (002812.SZ), Meituan (3690.HK), EVE Energy (300014.SZ), and JA Solar (002459.SZ) with declines exceeding 50%. Leading companies also faced challenges, with 50% of the top 20 companies experiencing declines in market capitalization.
Significant changes in the top 20 company rankings were observed, with the “trillion-yuan market cap club” expanding to 11 members. TSMC (2330.TW/TSM.N) capitalized on the AI wave, reclaiming the top spot with a market capitalization of CNY 38.201 trillion, representing an almost 42% increase. Tencent (0700.HK) dropped to second place with a market capitalization decrease of over 11%. Guizhou Moutai (600519.SH) raised prices for the first time in six years but failed to breach the CNY 2,000 mark, maintaining its position in the top three. Pinduoduo (PDD.O), PetroChina (601857.SH), and Bank of China (601988.SH) joined the top 20 with increases of over 91%, 42%, and 21%, respectively. Meituan (3690.HK) experienced a significant decrease in market capitalization, falling out of the top 20 from the 9th position the previous year to the 24th.
In 2023, the internet e-commerce industry saw slow recovery, and the dividend from traffic further diminished. Pinduoduo (PDD.O) impressed with a stunning third-quarter report, surpassing Alibaba in market capitalization. As of now, Pinduoduo’s market capitalization has grown by over 91% annually, ranking 6th and trailing Alibaba by only CNY 19 billion, making it four times the market capitalization of JD.com. The long-stable competitive landscape of the e-commerce industry is undergoing a reshuffle.
As the market capitalization of leading companies decreased, there were significant changes in the camp of companies with a market capitalization exceeding CNY 100 billion. The number of companies decreased from 189 to 181, mainly concentrated in industries such as banking (19 companies), information technology (17 companies), electronics (12 companies), food and beverages (11 companies), transportation and logistics (10 companies), and pharmaceuticals and biotechnology (10 companies).
Rotating Trends: The electronics sector soars with the AIGC wave, and innovative pharmaceutical companies boom
No winter is insurmountable. In 2023, the global economy embarked on the road to recovery, leading to the emergence of new themes, and rapid industry rotation throughout the year.
Riding the AIGC wave, the consumer electronics industry reached the bottom of its cycle in the first half of the year and rebounded in the second half. The booming development of new energy vehicles accelerated the trend, boosting the rise of automotive companies. The pharmaceutical and biotechnology industry continued to move forward amidst fluctuations, opening up new opportunities for innovative drug companies. The recovery of travel and other incremental factors drove a gradual rebound in transportation and logistics.
Overall, the top 500 companies still concentrate in major sectors such as large finance (77 companies), electronics (57 companies), pharmaceuticals and biotechnology (42 companies), and information technology (41 companies).
Compared to the previous period, 293 companies in the current top 500 list saw an increase in their rankings.
Innovative pharmaceutical company Xinnoway (300765.SZ) made a strong debut on the list, ranking 429th and advancing 1,530 places from the previous year, making it the company with the most significant ranking improvement. There were 76 “new faces,” mainly concentrated in the electronics and information technology industries. Eight companies went public in 2023, including the express delivery newcomer Jitu Express (1519.HK) with a market capitalization exceeding CNY 100 billion, small and medium-sized securities firm Xinda Securities (601059.SH), ODM leader Huaqin Technology (603296.SH) riding the AI trend, innovative pharmaceutical company Baili Tianheng-U (688506.SH) setting a new record for overseas expansion of innovative drugs, lithium battery newcomer Ruipulanjun (0666.HK), the Science and Technology Innovation Board-listed Ates (688472.SH), the main board-listed coal company Suning Shares (600925.SH), and the Hong Kong-listed central enterprise CITIC Metal (601061.SH).
The rankings of 200 companies decreased, with the pharmaceutical and biotechnology (24 companies), power equipment (19 companies), and real estate (15 companies) sectors accounting for nearly one-third. As the trend of Chinese fashion faded away, Li Ning (2331.HK), unable to produce a new ace, saw its annual market value decline by over 69%, falling back 274 places compared to the previous year, becoming the company with the most significant ranking decline. Seventy-six companies were pushed out of the list, including 12 in the power equipment sector and 8 each in the electronics and real estate sectors.
Electronics: Four companies double their market capitalization
Looking back at 2023, from ChatGPT gaining popularity to Google launching Gemini, and the rise of Huawei concepts… With the assistance of the AIGC wave, the consumer electronics industry gradually confirmed the bottom of its cycle in the first half of the year, and the market demand rebounded. In the second half of the year, with the continuous introduction of innovative products, the industry ushered in a glorious moment.
The number of electronics companies in the top 500 increased significantly by 13, with the market capitalization of 42 companies rising to varying degrees, accounting for a high proportion of 74%. TSMC (2330.TW), the industry leader, saw its market capitalization surge by CNY 1.1 trillion, leading to a doubling of the market capitalization of industry chain stocks such as SMIC-KY (3661.TW), Wistron (3231.TW), Creative Electronics (3443.TW), and GIGABYTE (2376.TW), with increases of 337%, 241%, 176%, and 154% respectively. Influenced by factors such as third-quarter performance below market expectations, the market capitalization of domestic chip leader Ziguang Guowei (002049.SZ) fell by nearly 49%.
Looking ahead to 2024, China Securities believes that the revenue of the electronics sector is expected to benefit from the low base effect and achieve sequential growth. AI technology and product innovation are expected to resonate, and companies with independent R&D are likely to perform well.
Automobiles: New energy car companies rise
The automobile industry is a strategic and pillar industry of the national economy, an important field for driving domestic demand and expanding consumption. In this hottest land for the development of new energy vehicles in China, the related areas of new energy vehicles are developing rapidly, as seen in the latest rankings.
BYD (002594.SZ) leads the automotive sub-list with an absolute advantage in market capitalization, securing a place in the top 20 of the overall list. The market capitalization of Ideal Auto (2015.HK) and Sailesi (601127.SH) both increased by over 90%, with rankings rising by 72 and 187 places, respectively.
According to the “2024 China Automotive Market Overall Forecast Report” released by the China Association of Automobile Manufacturers, it is expected that China’s new energy vehicle sales will be around 11.5 million units in 2024, with an export volume of around 5.5 million units. With the gradual recovery of the Chinese economy, it is expected that the demand for the automotive market will continue to grow steadily, and the future Chinese automotive market will enter a new stage with sales exceeding 30 million units.
CICC’s research report pointed out that China’s electric vehicle technology has a competitive advantage, strong product capabilities, and an unchanging trend of accelerating exports. With the accumulation of scale and technological advantages, it is optimistic about China’s rapid global expansion in the automotive market, and the next few years will continue to be a stage of rapid development in overseas sales.
Pharmaceuticals and Biotechnology: Explosion of innovative drug companies
Various themes in the pharmaceutical industry rapidly rotated, with domestic innovative drugs “going global” in a big way, and continuous policy support such as medical insurance… In 2023, the pharmaceutical and biotechnology industry continued to move forward amidst fluctuations. More than 60% of pharmaceutical companies on the list saw a decrease in market capitalization, with companies like WuXi Biologics (2269.HK), Tiger Medicine (300347.SZ), JD Health (6618.HK), and Watson Biology (300142.SZ) experiencing market capitalization declines of over 40%. Even the leading company in the industry, Mindray Medical (300760.SZ), couldn’t avoid an 8% decline.
Innovative drug companies opened up new opportunities, with the market value of innovative pharmaceutical newcomer Xinnoway (300765.SZ) growing strongly by 339%, and the market value of New Industry (300832.SZ) rising by over 55%.
CITIC Securities pointed out that with a stable demand side and stable policy expectations, moderate growth in domestic demand is expected. With the improvement of China’s innovative drug global competitiveness, going global is expected to continue to be an important theme; generic drug centralized procurement is gradually clearing, and innovative transformation continues to advance. The industry is expected to achieve good growth in 2024, and the sector’s performance is optimistic.
Transportation and Logistics: New listing Jitu Express joins the list
In 2023, with the recovery of travel, economic recovery, and the release of cross-border e-commerce demand, the transportation and logistics industry gradually rebounded.
The list shows that there are 29 companies from the transportation and logistics industry on the list, an increase of 2 from the previous period. Among them, this year’s new listing Jitu Express (1519.HK) entered the industry list with a market value of CNY 126.3 billion, and Ninghu Expressway (600377.SH), China Merchants Highway (001965.SZ), and Daqin Railway (601006.SH) all saw market value growth of over CNY 10 billion.
Southwest Securities analysis believes that in 2024, the transportation sector still has structural opportunities, and continuous observation of the global economic recovery process is needed. Sudden events in shipping will also have a certain impact on supply chain efficiency.
Regional Map: Headquartered companies gather, nearly 1/5 from the Greater Bay Area
The number and quality of listed companies are undoubtedly important indicators for observing a city’s economic vitality, reflecting its economic development level and value.
The 21 Data Journalism Lab found that the top 500 companies by market capitalization in the latest period show a significant head effect. Companies headquartered in Beijing (107), Shanghai (53), Hong Kong (43), Taipei (35), Shenzhen (30), Hangzhou (19), and Guangzhou (11) account for nearly 60%. A total of 255 companies are from Beijing, Guangdong, Shanghai, and Zhejiang, accounting for 51%, highlighting the scale effect of industrial innovation.
As the first central headquarters of central enterprises, Beijing has 107 top 500 listed companies with a total market capitalization exceeding CNY 21 trillion, accounting for about 29% of the total top 500 companies and gathering a large number of industry giants in banking, petroleum and petrochemicals, and internet companies. Half of the top 10 companies are headquartered in Beijing.
Looking at the regional distribution of the top 500 companies by market capitalization, there is high concentration but distinct regional characteristics.
As one of the most open and economically dynamic regions in China, the Greater Bay Area of Guangdong, Hong Kong, and Macau exhibits significant competitive advantages in capital. In 2023, a total of 97 companies from the Greater Bay Area made it to the list, accounting for nearly 1/5 of the national total. The combined market value exceeded 15 trillion yuan, constituting 21% of the total market value on the list, with an average market value of nearly 1.6 trillion yuan. The majority of these companies are concentrated in Hong Kong (43), Shenzhen (30), and Guangzhou (12). The top 20 positions are held by five companies: Tencent Holdings (0700.HK), AIA Group (1299.HK), China Merchants Bank (600036.SH), Ping An Insurance (601318.SH), and BYD (002594.SZ).
In terms of industry distribution, these 97 listed companies come from 23 different industries, reflecting the diverse industrial landscape and development strategy of the Greater Bay Area. Among them, 31 companies are related to the manufacturing industry, accounting for over 30%. Within the manufacturing sector, the listed manufacturing giants cover various industries such as communication equipment, automobile manufacturing, household appliances, and electronic components, with a significant overlap with the strategic industries of Guangdong Province.
This year, Guangdong has emphasized the commitment to the real economy as the mainstay, with a focus on the manufacturing sector, accelerating the construction of a manufacturing powerhouse. Data shows that in the first three quarters of 2023, the 20 strategic industrial clusters in Guangdong Province achieved an added value of 2.51 trillion yuan, a year-on-year growth of 3.5%, becoming a crucial driving force for the development of the manufacturing industry.
