A new Brand Finance report reveals that Sinopharm remains the most valuable Chinese pharma brand ranked at USD3.6 billion while Guangzhou Pharmaceutical retains the top spot among Traditional Chinese Medicine (TCM) brands
BEIJING, 30th July 2024 – Sinopharm holds on to its crown as the most valuable Chinese pharma brand ranked this year – according to a new report by Brand Finance, the world’s leading brand valuation consultancy, despite a slight decline in its brand value by 6% to USD3.6 billion.
Similarly, Guangzhou Pharmaceutical retained its second placing among the 15 most valuable Chinese pharma brands ranked, recording a brand value increase of 11% to USD2.5 billion while SPH has also kept its podium position among the top three most valuable Chinese pharma brands, only seeing a minor slip in its brand value by 1% to USD1.4 billion.
In Brand Finance’s secondary ranking specifically focusing on TCM brands, Guangzhou Pharmaceutical has once again emerged as the most valuable TCM brand for the fourth consecutive year. This is followed by Yunnan Baiyao (brand value down 0.5% to USD822 million)remaining at the second spot and CR SANJIU (brand value up 12% to USD340 million) rising to third place. Tong Ren Tang (brand value up 17% to USD325 million)and Pien Tze Huang (brand value down 11% to USD278 million)are fourth and fifth respectively in the top five most valuable TCM brands ranked.
Most notably, Tong Ren Tang is also this year’s strongest Chinese pharma brand ranked, clinching a brand strength rating of AAA- and a Brand Strength Index (BSI) score of 80.9 out of 100. The top five is completed by 2023’s strongest Yunnan Baiyao (BSI 79.8), Guangzhou Pharmaceutical (BSI 70.9), CR SANJIU (BSI 69.2) and Pien Tze Huang (67.3).
Brand Finance’s latest research in this sector shows that TCM brands continued to remain well received by consumers with Yunnan Baiyao leading for awareness and familiarity with 97% and 91% respectively, followed by Tong Ren Tang with 94% and 82%. The same brands, with the addition of Guangzhou Pharmaceutical also take up three of the top five Chinese pharma brands with the highest levels of brand consideration.
“Research and development among Chinese pharma brands continues to rise, with the market bolstered by factors like economic growth, health awareness, urbanisation and chronic diseases. With support from locals, TCM brands continue to thrive, although Western Medicines are also widely used and not very far behind."
Scott Chen, Managing Director, Brand Finance China
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.
