China's pharmaceutical market currently generates $110 billion of revenues, according to BizVibe, a Canadian B2B global business networking platform. BizVibe, citing unspecified experts, says the figure will hit $167 billion by 2020. The website also offered a top 10 list of China pharma companies (see story), based on a combination of each company's revenues and market capitalization, though the company didn't elaborate on the exact mix it used to determine the rankings.

China's top ten do not dominate the market as the top ten do in more developed markets. In China, the top ten pharma are responsible for only 20% of the overall market, while in western countries, the top ten pharmas generate about half of total country sales.

Here's the list:

 
China's Top Ten Pharmaceutical Companies

1. Shanghai Pharmaceuticals (SHA: 601607; HK: 02607), a company listed on both the Shanghai and Hong Kong exchanges, combines a major pharmaceutical operation with one of China's two largest distribution networks. In 2015, the company reported $18.5 billion of revenues. However, Shanghai Pharma has a market cap of less than $10 billion, reflecting its low profit margins (a problem with distribution companies and not overcome in this case by the pharma business). It allocates 5.4% of its manufacturing revenues to R&D, and produces western style drugs for critical needs, along with modern TCM products and medical devices. The company, which owns over 1,700 drug stores as part of its distribution efforts, is especially active in the large markets of East China.

2. China National Pharmaceutical Group/Sinopharm, a state-owned company, is usually considered a larger company than BizVibe's choice for number one, Shanghai Pharma. CNPG is not publicly owned, though it has listed subsidiaries. Not being listed, it doesn't have a market capitalization, and financial results for the entire enterprise are difficult to find. CNPG comprises 22 wholly-owned subsidiaries, including three Shanghai-listed companies, Beijing Tiantan Biological Products Corporation Limited (BTBP), China National Medicines Co. (CNCM) and Shenzhen Accord Pharmaceutical Co.

CNPG is usually known as Sinopharm, which is also the name of its distribution arm, a company it formed with Fosun Pharma (see below) and listed on the Hong Kong exchange in 2010. Sinopharm Inc. (the distribution company) is often confused with its parent, the larger CNPG. CNPG has a wide-ranging set of companies that run the gamut from generic drug enterprises to research-based innovative entities. In 2014, it generated $36.6 billion in revenues. From time to time, rumors surface that additional subsidiaries, usually China National Biotechnology Group (CNBG), are going to stage an IPO. So far, that hasn't happened. It isn't clear why BizVibe put the company in second place, behind Shanghai Pharma on the list.

3. Jiangsu Hengrui Medicine (SHA: 600276), established in 1970 and headquartered in Lianyungang, Jiangsu Province, is a leader in China’s innovative medicine sector. The company devotes 10% of its $1.7 billion in revenues to R&D. In 2015, Hengrui started construction on a $137 million biologic drug manufacturing facility in Suzhou. It establishes partnerships and signs in-licensing to acquire additional products, including biosimilars. Hengrui Medicine is the first China pharmaceutical enterprise to sell domestic injectable products overseas to Europe, US, and Japan. The company's 2016 revenues were $1.7 billion and its market cap $20 billion, a high multiple of 12X sales.

4. Shanghai Fosun Pharmaceutical (Group) (SHA: 600196; HK: 2196) is a part of Fosun Industries, one of China's major conglomerates. Fosun Pharma shares the M&A devotion of its parent, entering deals with abandon and often raising money to pay for them. Critics complain that Fosun is a pharma mutual fund, a group of disparate assets, rather than an integrated pharma company. Fosun counters by saying that nobody in the business is better at integrating assets than it is -- after all, it has the most experience. The company has interests in everything, it seems, from innovative gene-based medication to generics. Last year, the company agreed to pay $1.3 billion for an 86% in India's Gland Pharma, a maker of small volume parenteral drugs. It was the largest ever China-India pharma deal by several orders of magnitude. In 2016, the company produced revenues of $2.3 billion (ahead of Hengrui) and has a market cap of $10.6 billion (about half of Hengrui's). 

5. Huadong Medicine (SHE: 000963) makes drugs that include western style and TCM products. It also has a distribution system in China's eastern coastal region (Huadong means eastern coast). The company's products include immunosuppressive preparations, diabetes drugs, drugs for digestive system diseases, blood drugs, drugs for bone injuries and active pharmaceutical ingredients. The company also makes medical devices for domestic and overseas markets. In 2016, Huadong reported revenues of $3.4 billion and a market cap of $6.7 billion.

6. Yunnan Baiyao Group (SHZ: 000538), founded in 1902, is the oldest pharma in the top ten. The majority of its products are Traditional Chinese Medicines, along with APIs for chemical products. The company also has a distribution operation. In 2016, Baiyao reported revenues of $3.3 billion, and its market capitalization is currently $13.7 billion. According to the company, it will expand its operations and increase revenues by a factor of 4 -- to $13 billion -- in three years.

7. Guangzhou Pharmaceutical Holdings makes TCM and western medicines. The company, like China National Pharmaceutical Group, is not publicly held. It produces anti-toxic and diabetes drugs along with medicines for arthritis and gastric diseases. In 2007, Guangzhou Pharmaceutical Corporation, a distribution subsidiary, accepted $50 million from Alliance Boots for a 50% share in its China distribution business. Guangzhou Pharmaceutical Corporation claims to be the largest JV in China and also the third largest drug distributor.  

8. China Meheco (SHA: 600056), a Beijing enterprise listed on the Shanghai Stock Exchange, is controlled by China General Technology (Group) Holding, a state-owned company. In the international market, it imports and exports pharmaceutical chemicals and related products along with China-made medical equipment. It also offers TCM and herbal products in China. Its interests span the entire industry chain, from R&D, cultivation and processing, manufacturing, distribution, logistics to international trading, academic promotion and technical service. Its most recent 12-month revenues were $470 million, and its market cap was $3.8 billion

9. Harbin Pharmaceutical Group is a state-controlled Sino-foreign equity joint venture, which operates through at least nine subsidiaries. Its major product is antibiotics, along with small-molecular drug preparations, OTC and healthcare products, modern Chinese medicines and biopharmaceuticals. Revenues of the company are hard to come by, but BizVibe said Harbin's revenues for 2012 were $2.7 billion.

10. Kangmei Pharmaceutical (SHA: 600518), founded in 1997 and headquartered in Puning, China, is a significant maker of TCM products. It also produces antibiotics and other western style drugs. The company generated $3.4 million of revenues in the most recent twelve months; its market capitalization is $15 billion.

Disclosure: none.