2022TheannualreportonthemostvaluableandstrongestChinesepharmabrandsContents.BrandFinanceChinesePharma2022/chinese-pharma2Foreword7DavidHaigh,Chairman&CEO,BrandFinanceFeatureMethodology18?2022Allrightsreserved.BrandFinancePlc.AboutBrandFinance.BrandFinanceChinesePharma2022/chinese-pharma3BrandFinanceistheworld'sleadingbrandvaluationconsultancy.WebridgethegapbetweenmarketingandfinanceWequantifythefinancialvalueofbrandsWeofferauniquecombinationofexpertiseeofWeprideourselvesontechnicalcredibilityOurexpertshelpedcrafttheinternationallyrecognisedstandardsonBrandValuationISOandBrandEvaluationISO0671.Ourmethodologyhasbeencertifiedbyglobalindependentauditors–AustrianStandards–ascompliantwithboth,andreceivedtheofficialapprovaloftheMarketingAccountabilityStandardsBoard.Forbusinessenquiries,pleasecontact:ScottChenManagingDirector,BrandFinanceChina+8618601188821s.chen@Formediaenquiries,pleasecontact:MichaelJosemAssociateCommunicationsDirectorm.josem@Forallotherenquiries:enquiries@+442073899400/company/brand-finance/brandfinance//brandfinancestetoCstfeeUnderstandingCommunicationBenchmarkingstetoCstfeeUnderstandingCommunicationBenchmarkingRequestyourownBrandValueReportABrandValueReportprovidesacompletebreakdownoftheassumptions,datasources,andcalculationsusedEachreportincludesexpertrecommendationsforgrowingbrandInsightvaluetodriveperformanceandoffersInsightacost-effectivewaytogainingabetterunderstandingofyourpositionagainstpeers.StrategyVisit/request-a-Strategyoremailenquiries@brand?BrandValuationBrandValuationSummaryStrengthTrackingEducationRoyaltyEducationCostofCapitalAnalysisCustomerResearchFindingsenquiries@brandirectoryenquiries@BenchmarkingBrandFinanceChinesePharma2022/chinese-pharma5Brectoryistheworldslargestdatabaseofcurrentandhistoricalbrandvalues,providingeasyaccesstoandFinancerankingsreportswhitepapersandconsumerresearchpublishedsince2007.+Browsethousandsofpublishedbrandvalues+Trackbrandvalue,strength,andratingacrosspublicationsandovertime+Useinteractivechartstocomparebrandvaluesacrosscountries,sectors,andglobalrankings+Purchaseandinstantlyunlockpremiumdata,completebrandrankings,andresearchVisittofindoutmore.BrandFinanceGroup.BrandFinanceInstitutearingandersandexpertsintheworldInthehthepurposetrategypractitionersficationsinhemostcovetedbusinessschoolsdersinthefieldBrandDialoguegsVI360GlobalBrandEquityMonitorOriginalmarketresearchonover5,000brands36countriesand29sectorscoveredOver100,000respondentssurveyedannuallyWearenowinour6thconsecutiveyearconductingthestudyVisit/consumer-researchoremailenquiries@brand?enquiries@Foreword.BrandFinanceChinesePharma2022/chinese-pharma7DavidHaighOnanceWhatisthepurposeofastrongbrand:toattractcustomers,tobuildloyalty,tomotivatestaff?Alltrue,butforacommercialbrandatleast,thefirstanswermustsbetomakemoneyHugeinvestmentsaremadeinthedesign,launch,andongoingpromotionofbrands.Giventheirpotentialfinancialvalue,thismakessense.Unfortunately,mostorganisationsfailtogobeyondthat,missinghugeopportunitiestoeffectivelymakeuseofwhatareoftentheirmostimportantassets.Monitoringofbrandperformanceshouldbethenextstep,butisoftensporadic.Whereitdoestakeplace,itfrequentlylacksfinancialrigourandisheavilyreliantonqualitativemeasures,poorlyunderstoodbynon-marketers.Asaresult,marketingteamsstruggletocommunicatethevalueoftheirworkandboardsthenunderestimatethesignificanceoftheirbrandstothebusiness.Scepticalfinanceteams,unconvincedbywhattheyperceiveasmarketingmumbojumbo,mayfailtoagreenecessaryinvestments.Whatmarketingspendthereis,canenduppoorlydirectedasmarketersarelefttooperatewithinsufficientfinancialguidanceoraccountability.Theendresultcanbeaslowbutsteadydownwardspiralofpoorcommunication,wastedresources,andanegativeimpactonthebottomline.BrandFinancebridgesthegapbetweenmarketingandfinance.Ourteamshaveexperienceacrossawiderangeofdisciplinesfrommarketresearchandvisualidentity,totaxandaccounting.Weunderstandtheimportanceofdesign,advertising,andmarketing,butwealsobelievethattheultimateandoverridingpurposeofbrandsistomakemoney.Thatiswhyweconnectbrandstothebottomline.Byvaluingbrands,weprovideamutuallyintelligiblelanguageformarketingandfinanceteams.Marketersthenhavetheabilitytocommunicatethesignificanceofwhattheydo,andboardscanusetheinformationtochartacoursethatmaximisesprofits.Withoutknowingtheprecise,financialvalueofanasset,howcanyouknowifyouaremaximisingyourreturns?Ifyouareintendingtolicenseabrand,howcanyouknowyouaregettingafairprice?Ifyouareintendingtosell,howdoyouknowwhattherighttimeis?Howdoyoudecidewhichbrandstodiscontinue,whethertorebrandandhowtoarrangeyourbrandarchitecture?BrandFinancehasconductedthousandsofbrandandbrandedbusinessvaluationstohelpanswerthesequestions.BrandFinance’sresearchrevealedthecompellinglinkbetweenstrongbrandsandstockmarketperformance.Itwasfoundthatinvestinginhighly-brandedcompanieswouldleadtoareturnalmostdoublethatoftheaveragefortheS&P500asawhole.Acknowledgingandmanagingacompany’sintangibleassetstapsintothehiddenvaluethatlieswithinit.Thefollowingreportisafirststeptounderstandingmoreaboutbrands,howtovaluethemandhowtousethatinformationtobenefitthebusiness.TheteamandIlookforwardtocontinuingtheconversationwithyou.BrandFinanceChinesePharma2022/chinese-pharma8SinopharmismostvaluableChinesepharmaceuticalsbrandwith11%riseinvalue.+SinopharmretainsitspositionasmostvaluablepharmaceuticalsbrandinChina,valuedatUS$3.5billion+GuangzhouPharmaceuticalisthefastestgrowingbrandintheranking,morethandoublinginvaluesince2020+SPHisamongthetop3pharmaceuticalbrandsinChina+NewentrantJointownPharmaceuticalgrewitsfootprintamidCOVID-19conditions+TongRenTangachieved40%brandvaluegrowth,jumps3positionsintherankingasofthetopChinesepharmabrandsExecutiveExecutiveSummary.BrandFinanceChinesePharma2022/chinese-pharma10BrandValue&BrandStrengthAnalysis.SinopharmretainsitspositionasmostvaluablepharmaceuticalbrandinChina,valuedatUS$3.5billionSinopharm(brandvalueup11%toUS$3.5billion)continuestobethemostvaluableChinesepharmaceuticalsbrand.ThebrandplaysanimportantroleintheChinesepublichealthlandscapebydevelopinganddeployingoneoftheworld’smostusedCOVID-19vaccines.SinopharmisformingstrategicallianceswithlocalpharmabrandstotacklethespreadofthevirusbystrengtheningitssupplychainanddistributionnetworkandthusincreasingaccesstohealthcareacrossChina.ThebrandinvestedinresearchanddevelopmenttocreatetheSinopharmvaccinewhichwasthefirstnon-WesternvaccinetobegrantedapprovalbytheWorldHealthOrganisation(WHO)in2021andhasbeenadministeredwidelyacrossChinaandinternationally.TheaggregatevalueoftopChinesepharmaceuticalbrandsgrowsby18%year-on-yearasbrandsexpandininternationalmarkets.Chinesepharmabrandsareplayinganinstrumentalroleduringthepandemictodevelopandadministervaccinesacrossthenationanddeployhumanitarianaidtoothernations.Thebrandshavestayedcurrentinthepost-COVID-19economybyadaptingtocurrentmarketconditionsbyexpandingtheirreachintonewmarketsandnewcustomersegments.Chinesepharmaceuticalbrands,suchasGuangzhouPharmaceuticals,achievedstrongbrandvaluegrowthdespiteuncertainbusinessconditionsamidsttheCOVID-19pandemic.Brandsintherankinghaveinvestedinresearchtointroducenewofferingsforcustomers.Astheimportanceofthehealthcareindustryincreases,investmentsmadeattheheightofthepandemicarepayingoff.ScottChenManagingDirector,BrandFinanceChina令令505101$0.5bn+5%$3.5bn+11%令令505101$0.5bn+5%$3.5bn+11%Top10MostValuableChinesePharmaBrands?BrandFinancePlc2022202令303令404令$2.1bn+42%$1.5bn+7%$0.8bn+31%$0.5bn-令716令$0.5bn+6%令817令$0.4bn+13%9212令$0.3bn+40%1019令$0.3bn+14%SPHisamongthetop3pharmaceuticalbrandsinChinadNewentrantJointownPharmaceuticalgrewitsfootprintamidCOVID-19conditionstBrandFinanceChinesePharma2022/chinese-pharma11BrandFinanceChinesePharma2022/chinese-pharma1240%31%7%6%5%40%31%7%6%5%BrandValueChange2021-2022(%)442%GuangzhouPharmaceuticalisthefastestgrowingbrandintheranking,morethandoublinginvaluesince2020GuangzhouPharmaceuticalsachievedbrandvaluegrowthof7%since2020.Overthecourseof2021,thebrandvaluegrewby42%toUS$2.1billion.AsthelargestpharmaceuticalcompanyinChina,GuangzhouPharmaceuticalowns12Chinatime-honouredbrandsand10century-oldbrands.ItnotonlyhasChenlijipharmaceuticalfactory,whichhasbeencertifiedbytheGuinnessWorldRecordsastheoldestoperatingpharmaceuticalfactoryforits422yearsoperation,andWanglaoji,thebrandknownastheancestorofherbaltea,butalsovariouswell-knowncentury-oldbrandssuchasJingxiutang,Pangaoshou,Caizhilin,andtenwell-knownChinesetrademarkssuchasGPC,BaiyunshanandQixing.Foralongtime,GuangzhouPharmaceuticalhasbeendeeplyengagedinbrandbuilding,innovativelyimplementingthedual-brandstrategyintheChinesedomesticmarketandcombiningthenationalwell-?BrandFinancePlc2022knownbrandBaiyunshanwithitstime-honouredbrandstocreatebrands,suchasBaiyunshanChenliji,andBaiyunshanJingxiutangetc.,whichinturnhavepromotedtherapidopeningofthenationalmarketforbrandedproducts.harmaceuticalhasputforwardtheconceptofmodernisationandrnationalisationoftraditionalChinesemedicineofthiscenturyInrecentyearsPharmaceuticalhasstrengtheneditscooperationwithFortune500companiesthroughtheWorldEconomicForumBoaoForumandotherencesIthasactivelyexpandeditscircleoffriendsestablishedseveraljointenturesandhasbecomestrategicpartnerswithmanysiCoTakedaandadditionGuangzhouPharmaceuticalreliesterstofurtherrnationalmarketInDecemberauQingzhoufactorywascompletedandputintooperation,becomingthefirstfactorythatmeetsoryLookingforwardngzhouPharmaceuticalChinesemedicinesthatare“MadeinMacau”willgoabroad.Top10StrongestChinesePharmaBrands令令224令令22430310170.7+3.370.7+3.374.1+1.0?BrandFinancePlc2022令412令68.5-0.7AA-令526令66.4+2.4AA-令615令65.7-0.3令707令63.4+0.3A+令808令62.9+1.1A+令909令62.8+1.5A+10010令59.4+1.8ATongRenTangachieved40%brandvaluegrowth,jumps3positionsintherankingasoneofthetop10ChinesepharmabrandsTongRenTang(brandvalueup40%toUS$289million)inthe9thpositionwhichjumpedup3positionsintheBrandFinanceChinesePharma15ranking.Thebrandachievedanimpressive108%brandvaluegrowthsince2020.ThepharmabrandhasopeneditsstoresinanumberofinternationalmarketssuchastheUnitedKingdom,Germany,Japanamongothers.ThebrandhasbeenactivelyengagingyoungerGenZconsumerswithitsnewupscalecoffeeshopinBeijingwithawidenumberoffoodandbeverageofferingsacrossWesternandChinesemedicine.BrandFinanceChinesePharma2022/chinese-pharma13BrandValueRanking(USDm).Top15mostvaluableChinesepharmabrands0SPH1999--A+A-A+A+A-A+A+12345678912345-6798BrandFinanceChinesePharma2022/chinese-pharma14BBrandSpotlight.BrandFinanceChinesePharma2022/chinese-pharma16GuangzhouPharmaceuticals.令A(yù)2$2.1bn+42%665.7AsthelargestpharmaceuticalcompanyinChina,GuangzhouPharmaceuticalowns12Chinatime-honouredbrandsand10century-oldbrands.ItnotonlyhasChenlijipharmaceuticalfactory,whichhasbeencertifiedbytheGuinnessWorldRecordsastheoldestoperatingpharmaceuticalfactoryforits422yearsoperation,andWanglaoji,thebrandknownastheancestorofherbaltea,butalsovariouswell-knowncentury-oldbrandssuchasJingxiutang,Pangaoshou,Caizhilin,andtenwell-knownChinesetrademarkssuchasGPC,BaiyunshanandQixing.Foralongtime,GuangzhouPharmaceuticalhasbeendeeplyengagedinbrandbuilding,innovativelyimplementingthedual-brandstrategyintheChinesedomesticmarketandcombiningthenationalwell-knownbrandBaiyunshanwithitstime-honouredbrandstocreatebrands,suchasBaiyunshanChenliji,andBaiyunshanJingxiutangetc.,whichinturnhavepromotedtherapidopeningofthenationalmarketforbrandedproducts.Intheinternationalmarket,GuangzhouPharmaceuticalhasputforwardtheconceptofmodernisationandinternationalisationoftraditionalChinesemedicineatthebeginningofthiscentury.Inrecentyears,GuangzhouPharmaceuticalhasstrengtheneditscooperationwithFortune500companiesthroughtheWorldEconomicForum,BoaoForumandotherinternationalconferences.Ithasactivelyexpandeditsinternationalcircleoffriends,establishedseveraljointventures,andhasbecomestrategicpartnerswithmanymultinationalcompaniessuchasPepsiCo,Takeda,andMerck.Inaddition,GuangzhouPharmaceuticalreliesonGPCMacauInternationalHeadquarterstofurtheropentheinternationalmarket.InDecember2021,GPC'sMacauQingzhoufactorywascompletedandputintooperation,becomingthefirstfactorythatmeetstheGMPstandardinMacau'shistory.Lookingforward,moreGuangzhouPharmaceuticalChinesemedicinesthatare“MadeinMacau”willgoabroad.BrandFinanceChinesePharma2022/chinese-pharma17MethodologyMethodology.dnarBarBnoietuulabVirsstennioseuCulBaVddeensEnterpriBrandValuednarBarBnoietuulabVirsstennioseuCulBaVddeensEnterpriBrandValueDefinitions.BrandValue+EnterpriseValueThevalueoftheentireenterprise,madeupofmultiplebrandedbusinesses.[ChinaResourcesSanjiu]Whereacompanyhasapurelymono-brandedarchitecture,the‘enterprisevalue’randedbusiness[ChinaResourcesSanjiu]+BrandedBusinessValueThevalueofasinglebrandedbusinessoperatingunderthesubjectbrand.[999]Abrandshouldbeviewedinthecontextofthebusinessinwhichitoperates.BrandFinancealwaysconductsabrandedbusinessvaluationaspartofanybrandionWeevaluatethefullbrandvaluechaininordertounderstandthelinksbetweenmarketinginvestment,brand-trackingdata,andstakeholderbehaviour[999]+BrandContribution[999]Theoverallupliftinshareholdervaluethatthebusinessderivesfromowningthebrandratherthanoperatingagenericbrand[999]Thebrandvaluescontainedinourleaguetablesarethoseofthepotentiallynsferablebrandassetsonlymaking‘brandcontribution’awiderconcept.Anassessmentofoverall‘brandcontribution’toabusinessprovidesadditionalinsightstohelpoptimiseperformance.+BrandValueThevalueofthetrademarkandassociatedmarketingIPwithinthebrandedbusiness.[999]BrandFinancehelpedtocrafttheinternationallyrecognisedstandardonbrandasamarketing-relatedintangibleassetincluding,butnotlimitedto,names,terms,signs,symbols,logos,anddesigns,intendedtoidentifygoods,servicesorentities,creatingdistinctiveimagesBrandFinanceChinesePharma2022/chinese-pharma19DefinitionofBrandBrandImpactWereviewwhatbrandsalreadypayinroyaltyagreements.DefinitionofBrandBrandImpactWereviewwhatbrandsalreadypayinroyaltyagreements.Thisisaugmentedbyananalysisofhowbrandsimpactprofitabilityinthesectorversusgenericbrands.Thisresultsinarangeofpossibleroyaltiesthatcouldbechargedinthesectorforbrands(for2BrandValuationMethodology.11BrandisdefinedasabundleoftrademarksandassociatedIPwhichcanbeusedtotakeadvantageoftheperceptionsofallstakeholderstoprovideavarietyofeconomicbenefitstotheentity.BrandValuerangeoftoofrevenuerangeoftoofrevenueBrandStrength dEachbrandisassignedaBrandStrengthIndex(BSI)scoreoutof100,whichfeedsintothebrandvaluecalculation.Basedonthescore,eachbrand isassignedacorrespondingBrandRatinguptoAAA+inaformatsimilartoacreditrating.ionAllbrandvaluationmethodologiesareessentiallytryingtoidentifythis,althoughtheapproachandassumptionsdiffer.Asaresultpublishedbrandvaluescanbedifferent.tsaresultBrandFinancealwaysincorporatesareviewofwhatusersofbrandsactuallypayfortheuseofbrandsintheformofbrandroyaltyagreements,whicharefoundinmoreorlesseverysectorintheworld.BrandImpactBrandImpact×BrandStrengthTheBSIscoreisappliedtotheroyaltyrangetoarriveataroyaltyrate.Forexample,iftheroyaltyrangeinasectoris0-5%andabrandhasaBSIscoreof80outof100,thenanappropriateroyaltyratefortheuseofthisbrandinthegivensectorwillbe4%.Thisissometimesknownasthe“RoyaltyRelief”methodologyandisbyfarthemostwidelyusedapproachforbrandvaluationssinceitisgroundedinrealityandValueCalculationWedeterminebrand-specificrevenuesasaandValueCalculationWedeterminebrand-specificrevenuesasaproportionofparentcompanyrevenuesattributable tothebrandinquestionandforecastthose revenuesbyanalysinghistoricrevenues,equityanalystforecasts,andeconomicgrowthrates.augmentitwitharealunderstandingofpeople’sperceptionsandtheireffectsondemand–fromourdatabaseofmarketresearchonover3000brandsinover30markets.Disclaimer valuesderivedandopinionsproducedinthisstudyarebasedonlyonpubliclyavailableinformationandcertainassumptionsthatBrandFinanceusedwheresuchdatawasdeficientorunclear.BrandFinanceacceptsnoresponsibilityandwillnotbeliableintheeventthatthepubliclyavailableinformationrelieduponissubsequentlyfoundtobeinaccurate.TheopinionsandfinancialanalysisexpressedinthereportarenottobeconstruedasprovidinginvestmentorbusinessadviceBrandFinancedoesnotintendthereporttoberelieduponforanyreasonandexcludesallliabilitytoanybody,governmentororganisation.BrandFinanceChinesePharma2022/chinese-pharma20BrandStrengthIndex3BrandStrengthIndex3BrandStrength.BrandStrengthurMMarketingInvestmentStakeholderityBusinessPerformanceWidelyrecognisedfactorsdeployedbymarketerstocreatebrandloyaltyandmarketshare.Perceptionsofthebrandamongdifferentstakeholdergroups,withcustomersbeingthemostimportant.Quantitativemarketandfinancialmeasuresrepresentingthesuccessofthebrandinachievingpriceandvolumepremium.1AttributeSelectionandWeighting1yiumwhereasrics2DataCollectionBrand’sabilitytoinfluencepurchasedependsprimarilyonpeople’sperceptions.Therefore,themajorityoftheBrandStrengthIndexisderivedfromBrandFinance’sproprietaryGlobalBrandEquityResearchMonitorresearch,aquantitativestudyofasampleofover100,000peoplefromthegeneralpublicontheirperceptionsofover4,000brandsinover25sectorsand37countries.tsurveyxampleinmarketingRDinnovationdetofutureperformancethansurveysTheyalsoincludeonlinemeasuressuchasratingsbyreviewsitesandsocialmediaengagementthatcangiveamoregranularunderstandingofsFinallytheyalsoincluderealbehaviourforexamplenetadditionscustomerchurnandmarketsharetoovercomethetendencyforsurveystoincorporateintendedbehaviourratherthanreal.Overaperiodof3to4monthseachyear,wecollectallthisdataacrossallthebrandsinourstudyinordertoaccuratelymeasuretheircomparativestrength.BenchmarkingandFinalScoringInordertoconvertrawdataintoscoresoutof10thatarecomparablebetweenattributeswithinthescorecard,wethenhavetobenchmarkeachattribute.Wedothisbyreviewingthedistributionoftheunderlyingdataandcreatingafloorandceilingbasedonthatdistribution.EachbrandisassignedaBrandStrengthIndex(BSI)scoreoutof100,whichfeedsintothebrandvaluecalculation.Basedonthescore,eachbrandisassignedacorrespondingratinguptoAAA+inaformatsimilartoacreditrating.Analysingthethreebrandstrengthmeasureshelpsinformmanagersofabrand’spotentialforfuturesuccess.BrandFinanceChinesePharma2022/chinese-pharma21BrandFinanceChinesePharma2022/chinese-pharma22ApparelAutomobilesLuxuryAutomobilesBanksCosmetics&PersonalCareInsuranceOil&GasRestaurantsRetail&E-CommerceTelecomsUtilitiesAirlinesLuxuryApparelAppliancesBeersLuxuryCosmeticsGeneralRetailHealthcareServicesHotelsHouseholdProductsLogisticsMediaPharmaRealEstateSoftDrinksSpirits&WineTeApparelAutomobilesLuxuryAutomobilesBanksCosmetics&PersonalCareInsuranceOil&GasRestaurantsRetail&E-CommerceTelecomsUtilitiesAirlinesLuxuryApparelAppliancesBeersLuxuryCosmeticsGeneralRetailHealthcareServicesHotelsHouseholdProductsLogisticsMediaPharmaRealEstateSoftDrinksSpirits&WineTechnologyresTier2Tier1KnowsomethingaboutyourbrandConsiderationWouldconsiderbuying/usingyourbrandBrandKPIsandDiagnostics 2.BrandUsage 3.Quality 4.Reputation 5.Loyalty 6.Closeness 7.Recommendation(NPS) 8.WordofMouth 9.BrandImagery 10.AdvertisingAwareness 11.BrandMomentum1.BrandFunnelGlobalBrandEquityMonitor.Originalmarketresearchin36countriesandacrossmorethan29sectorswithapproximately100,000consumersratingover5,000brands.HighlightsfromtheGlobalBrandEquityMonitor.BrandFinanceChinesePharma2022/chinese-pharma23BrandFinance’sproprietarymarketresearchprovidesarobustassessmentofbrandhealthonkeyequitymeasures,allowingcomparisonbothwithinandacrossproductandservicecategories.Benchmarkingagainstbrandsoutsideyoursectorisespeciallyhelpfulinassessingtherealstrengthofbrand–notjustthe‘bestofabadbunch’inacategorywherebrandsaregenerallyweaker.Whatmakesabrandgreat?Amazonisundoubtedlyoneoftheworld’sstrongestbrands,oneofjustahandfulachievingthehighestAAA+rating.Ithasanextremelystrongbrandfunnel,withnear-universalfamiliarity,andconsideration,andwhileitsreputat