Companies that make necessary products are the best investments. And what's more necessary than human blood?

As aging populations require more health services and drug treatments, the demand for plasma-based drugs is skyrocketing. However, the Big Pharma stocks involved in plasma development aren't pure plays on the trend.

That's why you should look to China and consider an often ignored Beijing-based company named China Biologic Products (CBPO - Get Report) , one of China's largest non-state-owned plasma biopharmaceutical companies. Shares of the company dropped 1.72% in Wednesday trading.

We explain why this mid-cap stock is poised to generate double-digit, market-thumping returns this year.

With a market valuation of $3.26 billion, China Biologic researches, develops and markets plasma treatments. The company manufactures more than 20 plasma products through its majority-owned subsidiaries and sells them to hospitals and clinics in China.

The company's major offering is human albumin for treating shock caused by blood loss trauma or burn. Other products include human immunoglobulin for intravenous injection to treat autoimmune deficiency diseases, and human hepatitis B immunoglobulin for the prevention of measles and contagious hepatitis.

China Biologic on Thursday reported quarterly earnings per share (EPS) of $1.26, a year-over-year increase of 18.8% and beating analysts' expectations of $1.18. The company reported revenue of $91.40 million for the quarter, a year-over-year increase of 15.5% and beating analysts' expectations of $87.60 million. The company's EPS for the full year is expected to come in at $4.01, compared to $3.44 in 2015.

The primary building block for everything the company makes is blood plasma, which is the pale-yellow fluid part of blood in which corpuscles are suspended. Plasma accounts for nearly 60% of total blood volume and acts as the glue for blood cells by holding them in suspension.

China Biologic's chief products are based on either human albumin or immunoglobulin. Human albumin, the chief protein in plasma, is used to stabilize critically ill or injured patients by replenishing lost fluid and maintaining sufficient blood volume and pressure. Immunoglobulin is used to boost immunity against certain diseases and disorders.

China Biologic is able to generate a steady supply of plasma, the raw material for its products, through a network of government-authorized collection stations. These stations pay healthy donors for the plasma that's needed by the company's scientists and engineers to create treatments.

China Biologic's plasma-based products are crucial in the treatment of traumatic injuries and chronic diseases. The company sells its treatments primarily to hospitals and inoculation centers through its own distribution network in China.

China Biologic's rivals include U.S.-based Baxter International and Spain-based Grifols, both of which also sell plasma in China, but the country's restrictive regulations ensure that the homegrown Beijing company dominates the national market.

As China's middle class expands and becomes more affluent, it's adopting many of the Western dietary and lifestyle habits that foster human disease. This irony is boosting China's drug companies, which are increasingly called upon to treat a host of ailments once scarce in Chinese society. Another tailwind is the Chinese government's $124 billion initiative to implement universal health care insurance for all of its 1.3 billion citizens.

These factors make China Biologic a relatively safe momentum growth stock in a risky, volatile investment climate. The company's mid-cap size renders it more stable than a small-cap biotech stock, but bestows greater opportunity for capital appreciation than a blue-chip behemoth.

The stock's trailing 12-month price-to-earnings ratio (P/E) is about 36, a bit high compared to the global drug industry's P/E of about 20. CBPO's growth prospects are worth the modest premium. CBPO shares now trade at about $122; the average analyst consensus for a one-year price target is about $146, for a gain of 20%.

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John Persinos is an editorial manager and investment analyst at Investing Daily. At the time of publication, the author held no positions in the stocks mentioned.