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Today I want to introduce you to a company that you have probably never heard of, although it is one of the larger companies in China with a market capitalization of $ 15 billion.
We’re talking about the CSPC Pharmaceutical Group Ltd. (CSPC)!
CSPC is a leading pharmaceutical company in China. The company has been listed on the Hong Kong Stock Exchange since 1994 and became part of the Hang Sang Index in 2018 – the first pharmaceutical share in 50 years (!).
CSPC focuses on the development, manufacture and marketing of drugs and pharmaceutical products in the three main business areas – innovative drugs, common generics and mass drugs.
The company offers more than 1,000 finished medicinal products. These include antibiotics, cardio-cerebrovascular drugs, antipyretic analgesics, drugs for the digestive system, drugs for oncology and traditional Chinese medicine. The products “NBP”, “Duomeisu”, “Jinyouli”, “Keaili”, “Xuanning” and “Oulaining” are the company’s best-selling pharmaceuticals. CSPC’s manufacturing facilities are primarily located in Shijiazhuang, Hebei Province.
If you want to find out more about the company’s products, I have linked you to the product page.
According to the World Brand Lab (brand valuation consultancy), the “CSPC” brand has been listed among the “Top 500 Most Valuable Brands in China” for more than ten years in a row since 2004.
In terms of corporate social responsibility activities, CSPC has played an important role in supporting charities. For example, CSPC has participated in charity campaigns related to SARS, the Indonesian tsunami, the Sichuan earthquake, the Yushu earthquake, children with serious illness, and other voluntary services.
In the past three years, the company’s profit has been an average of 30% p.a. grown. With sales of $ 2.6 billion and operating income of $ 0.55 billion, founder and CEO Cai Dongchen, with more than 18,000 employees, is taking the company to new heights. He has now built up almost $ 3 billion in assets.
In the following I have put together some information about CSPC in a fact sheet.
Company: CSPC Pharmaceutical Group Limited
CEO: Cai Dongchen
Registered office: Hong Kong
Market cap: $ 15 billion (12/2019)
Revenue: $ 2.6 billion
Operating profit: $ 0.55 billion
Profit growth (3 years): 30%
Operating cash flow: $ 0.54 billion
Dividend yield: 1% (12/2019)
The Chinese pharmaceutical market
China’s pharmaceutical market has grown steadily in recent years. According to expert estimates, this should reach a value of $ 161.8 billion by 2023. This would correspond to 30 percent of the world market.
China is already the second largest pharmaceutical market in the world after the USA. In 2018, it was worth almost $ 130 billion.
Although the pharmaceutical market grew by only 2.5% last year, it is expected that growth over the next five years will average around 5% p.a. will be.
According to Fu Xudong, senior vice president of global pharmaceutical giant Bristol-Myers Squibb, the growth is on improving treatment concepts, optimizing medical measures, accelerating access to new drugs, improving the quality of medical services and dynamically adapting access attributed to health insurance.
If I have sparked your interest in the Chinese pharmaceutical industry, you are welcome to take a look at the competitors of CSPC. These are e.g. Jiangsu Hengrui Medicine Co Ltd and Shanghai Pharmaceuticals Holding Co Ltd.
Both are companies that I will take a closer look at on this blog.
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