As China continues its national efforts to be known for manufacturer and provider of high-quality products and services, Beijing introduced stricter standards across various industries including the blood market.

One industry significantly affected by this are plasma collection facilities, which in turn, has provided significant growth to China Biologic Standards and a US$1 billion windfall to its major investor, Warburg Pincus, reports Bloomberg.

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In 2010, Warburg started buying shares of China Biologic on NASDAQ until it held over 40 percent stake. With the company's share price jumping over seven-fold in the past five years, the value of Warburg's holding soared in value to the current US$1.02 billion from US$165 million.

China Biologic is just one of the 16 investments of Warburg, a US$35-billion private equity firm, in the Asian giant. The other investments range from education to online retailing.

When Beijing put in place tighter measures, 22 percent of blood product collection facilities shuttered by December 2006. It left few private companies to run collection center in the next 10 years, one of which was China Biologic. The boom in business allowed the firm to expand the capacity of its plasma supply.

China Biologic also benefitted from the doubling of sales of albumin, one of the firm's core products and the main protein of human blood, since 2009 to US$1.3 billion market, according to data from Marketing Research Bureau, an independent research company in Orange, Connecticut.

Albumin is used to counter blood loss from shock. However, current per capita use of albumin in China is low vis-à-vis developed countries.

That spells good news for China Biologic since Milo Liu, analyst of Bocom International Holdings, forecasts the local market to grow by about 25 percent in the next three to five years. Liu, based in Hong Kong, gave China Biologic shares a "buy" rating.

While Beijing was the firm's channel of windfall, the government could also be the largest threats to its business if its policies on plasma products would change. Such changes from the Guizhou Provincial Government caused the closure of four China Biologic stations in 2011, which jittered investors.

Nevertheless, beside Liu, four other analysts recommend a "buy" for China Biologic stocks since its valuation has surged to 26 times projected 12-month earnings. It's more than twice the ratio in 2014.

Tagsblood market, Warbug Pincus, china biologic, blood