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China’s largest private companies soar in value despite pandemic, worth half of second-largest economy’s GDP last year: Hurun report

  • Internet, pharmaceutical and electric vehicle companies drive growth as pandemic recedes
  • Tencent unseats Alibaba to become the most valuable company

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The Pudong business and financial district in Shanghai. The Shanghai Composite Index has gained 10 per cent this year. Photo: EPA-EFE
Yujing Liu

China’s largest private companies mushroomed in value over the past year despite the Covid-19 pandemic, driven by fast growth in the internet, health care and electric vehicles sectors, according to a Hurun Research Institute report released on Wednesday.

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The values on average of the country’s top 500 private companies surged by 55 per cent to a record 110 billion yuan (US$16.7 billion) from a year ago. They were worth a combined 56 trillion yuan, or about half of China’s gross domestic product last year, according to the report, which is based on data up to October this year.

Tencent Holdings, Alibaba Group Holding, Meituan-Dianping, Pinduoduo and JD.com, the country’s five internet giants, were in focus. Benefiting from a global stock market rally among technology companies as the pandemic receded, they each added more than US$100 billion in value over the year.

“The main reasons for the rapid increase were the rise of the new economy, especially after the pandemic, a sharp rise in the stock markets and a flurry of new listings,” said Rupert Hoogewerf, chairman and chief researcher at Hurun.

Investors have piled into technology and pharmaceutical stocks globally, in search of growth and certainty, since the outbreak of the coronavirus. Central banks flooding the market with unprecedented liquidity has also helped push share prices higher.

Social media and online games operator Tencent (US$743 billion) unseated e-commerce behemoth Alibaba (US$713 billion), which also owns this newspaper, to become the most valuable company. Online food delivery services provider Meituan (US$243 billion) climbed to third place from sixth last year. Ping An Insurance (US$221 billion) and Ant Group (US$209 billion), which was expected to go public in the world’s largest initial public offering before regulators suspended it at the last minute this month, made up the top 5.
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