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The Blue Chips of China

April 4, 2012

China's Biggest BrandsCaterpillar, Coca-Cola, Exxon Mobil, GE, Microsoft, and McDonald’s—these are all blue chip companies that Americans likely know, consume and own in their investment portfolio. What about the blue chips that call the world’s second largest economy home?

Business Insider created a slideshow that showcases China’s biggest brands from BrandZ’s ranking of companies by brand value. The list is a global recognition of how China is increasingly becoming a brand creator and marketer, not just an export machine. Many of the companies are state-owned; all of the brands are publicly traded, report positive earnings and formed by a mainland enterprise. Because the country is growing as an economic powerhouse, it is time that “others around the world understand the power brands of China,” says BrandZ.

I’ve discussed many of these companies in my blog as illustrations of growing businesses staking their claim in the world economy.

For example, Apple’s iPhone is not only one of the hottest products in the U.S., it is also growing in demand in China, providing opportunity for countless materials and energy companies, including local wireless carriers. Whereas Americans choose among AT&T, Sprint and Verizon for their data plans, China’s residents have China Telecom, the 11th most valuable brand in China valued at $11 billion, and China Unicom, number 15 with a $6 billion value. Selling the popular iPhone to more Chinese over the next few years should boost the brand value—and bottom line—of both of these companies.

Although China Mobile is ranked No. 1 by BrandZ with a brand value of more than $50 billion, the company isn’t authorized to sell the iPhone. Still, China Mobile’s 600 million customers make it the world’s largest telecommunications provider.

Global investors hunt in unexpected places to find opportunity. George Soros once said, “Money is made by discounting the obvious and betting on the unexpected.” These profiled brands which many Americans may not have heard of stand to benefit from China’s growing middle class population and rising urbanization.

See China’s power brands now.

There are many accomplishments happening in China that we believe have been discounted by investors. Learn the unexpected from CLSA’s Andy Rothman by joining our webcast this Thursday morning.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. The following securities mentioned were held by one or more of U.S. Global Investors Funds as of 12/31/11: AT&T Inc, Apple Inc, Caterpillar, China Mobile, China Petroleum & Chemical Corp., The Coca-Cola Co., Exxon Mobil Corp., General Electric Co., Verizon.

Net Asset Value
as of 04/16/2014

Global Resources Fund PSPFX $9.63 0.16 Gold and Precious Metals Fund USERX $6.68 -0.06 World Precious Minerals Fund UNWPX $6.36 -0.04 China Region Fund USCOX $7.95 0.02 Emerging Europe Fund EUROX $8.00 0.06 All American Equity Fund GBTFX $31.97 0.40 Holmes Macro Trends Fund MEGAX $23.22 0.26 Near-Term Tax Free Fund NEARX $2.25 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change