In December 2006, 1,421 Chinese companies were listed on the Shanghai and Shenzhen stock exchanges.  If we exclude companies with market capitalisations of less than $100m (281), companies operating in the banking, insurance and real estate sectors (159), we are left with 981 companies for which audited accounts are available (compare this with a figure of 8,528 companies listed in Europe).  They account for two-thirds of the market capitalisation of the Shanghai and Shenzhen stock markets, or around €450bn, which matches to the combined market capitalisation of Gazprom + BP + Total.

We analysed these companies using the standard financial analysis methodology (1). Their aggregated accounts are available upon request (www.vernimmen.com).

In 2005, the combined sales of the Chinese companies in the sample amounted to €362bn, the equivalent of the sales of the biggest 4 non-financial European companies by market caps. 

There is a very large gap between the largest companies ranked by market cap and the smallest listed Chinese companies: 20% of the top companies account for 76% of sales, 72% of EBIT and 53% of the workforce with average sales of €1.4bn, EBIT of €85m and a headcount of 11,320.

Ath the others end of the scale, 20% of the smallest companies account for 1.4% of sales, 1.4% of EBIT and 4.8% of the workforce with average sales of €26m, EBIT of €1.6m and a headcount of 1,015.