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Grant Thornton 投英 Tou Ying 25 tracker 2013...

...tracking the UK’s fastest growing Chinese companies

Chinese companies are thriving in the UK and making a significant contribution to the UK economy, according to the Grant Thornton 投英 Tou Ying 25 tracker*. 

The tracker, in collaboration with China Daily, monitors UK businesses with Chinese parent companies to identify the 25 fastest-growing companies by turnover (based on the latest published accounts). These companies are making a heavyweight contribution to the UK economy – employing more than 2,600 people and generating revenues of over £17 billion in 2012, an increase of 27% on the previous year. Even at the lower end of scale the companies have achieved a 9% year-on-year revenue gain.

Nick Farr, Partner and Head of the China-Britain Services Group at Grant Thornton UK, commented: "Several high profile trade missions, culminating in the Prime Minister’s visit to China this week, have put Anglo-Chinese trade firmly in the spotlight. As the number of Chinese companies going global continues to rise, the UK appears to be well and truly open to Chinese investment, benefiting hugely from the inflow of funds. The results also come amid concerted efforts by the UK government to strengthen financial and business ties with China, for example by simplifying the visa application process."

"The Grant Thornton 投英 Tou Ying 25 provides a unique insight into the business activities, locations and performance of those companies already making a name for themselves in the UK, as well as their origins and ownership. It shows that Chinese companies continue to go global, stay global and – at least in the UK – have the dynamism to capitalise on growth opportunities at a time when western economies have proved challenging for many."

Organic growth surpassing acquisition

M&A activity between China and the UK has been a significant factor for a number of years, with 25 Chinese companies acquiring businesses in the UK between 2007 and 2013, including Weetabix and Sunseeker. However, the Grant Thornton 投英 Tou Ying 25 tracker shows that the growth of Chinese companies appears to be driven organically as much as by acquisition - just five of the companies in the tracker are the result of an acquisition. The make-up of the tracker also indicates that impressive growth is no longer the preserve of the Chinese state-owned powerhouses, with UK mid-market success stories such as TP-Link Technologies and Mindray demonstrating that.

Changing fortunes for Mainland China and Hong Kong?

The Grant Thornton 投英 Tou Ying 25 also suggests a shift in the relative economic weight and international growth prospects of the Chinese Mainland and Hong Kong economies respectively. A large proportion of the impressive organic growth illustrated by the tracker is being delivered by Mainland China-based enterprises – of the organic growth companies in the 投英 Tou Ying 25, 12 are from Mainland China, with just eight from Hong Kong. In all, 17 of the top 25 growth companies hail from the Mainland.

Sector diversification

Chinese overseas investment has been largely directed over the last few years to the financial services and energy sectors – the latter accounting for just under half (45%) of China’s total outbound investment in Europe from 2005 to 2013. However, while these familiar growth sectors are well represented in the 投英 Tou Ying 25, the range of sectors is refreshingly broad.

Regional patterns

Less than half of the 25 have chosen to set up in London, demonstrating the success of other UK regions in establishing themselves as alternative centres of expertise to attract inward investment.

Growing Chinese impact on the UK economy

The UK was the fourth most popular destination for Chinese outward investment in 2012 (second only to the US among developed Western economies), up from 21st place in 2010, at an estimated $2.77 billion, according to MOFCOM (China's Ministry of Commerce). At the same time, UK goods exports to China reached £10.5 billion in 2012, a 13% increase on the previous year, making it the UK’s seventh largest export market.

* Grant Thornton 投英 Tou Ying 25

(in alphabetical order)

Company Subsidiary name

Sector

Agricultural Bank Of China (UK) Limited

Banking and finance

Axiom MS Limited and Axiom Manufacturing Services Ltd. (Sub of South Sea Petroleum Holdings Limited)

Manufacturing

Bank Of China (UK) Limited

Banking and finance

China Construction Bank (London) Limited

Banking and finance

China Taiping Insurance (UK) CO Ltd

Banking and finance

China Telecom (Europe) Limited

Technology and telecoms

China Unicom (Europe) Operations Limited

Technology and telecoms

Dynex Semiconductor Limited

Technology and telecoms

Esquel Apparel Limited

Retail, consumer products

Huawei Technologies (UK) Co., Ltd.

Technology and telecoms

IBP Global Trading Limited and Conex Universal Limited (Sub of International Building products)

Manufacturing (metals, raw materials)

Industrial and Commercial Bank of China (London) PLC

Banking and finance

Jo-Y-Jo Limited (sub of Gamax Ltd )

Retail, consumer products

LEE KUM KEE (Europe) Limited

Retail, consumer products

Megaman (UK) Limited

Technology and telecoms

Mindray (UK) Limited

Retail, consumer products

Minmetals (U.K) Limited

Manufacturing (metals, raw materials)

Ocean Trawlers Europe Limited

Marine fishing

PTG Heavy Industries Limited and Holroyd Precision Ltd (Sub of Chongqing Machinery and Electronic Holding (Group))

Manufacturing

Putzmeister Limited

Manufacturing

Schwing Stetter (UK) Ltd

Manufacturing

Sinochem International Oil (London) CO; Limited

Energy and utilities

Tp-Link UK Limited

Technology and telecoms

Unipec U.K. CO. Limited

Energy and utilities

Yuanda (UK) Co

Real estate