The current positive signals in Sino-US economic and trade relations present a rare opportunity for the recovery of China’s export industrial chain. Some leading listed companies, with their high proportion of overseas business, relatively low valuations, and leading industry positions, are demonstrating the potential for “low valuation” and “high growth.” Below is a detailed overview of several key sectors.
Core Logic of Representative Companies in Each Sector
Construction Machinery & High-End Equipment: Companies such as Sany Heavy Industry, XCMG, Zhejiang Dingli, Anhui Heli, and Hangcha Group have performed exceptionally well. Overseas demand is showing signs of improvement, and domestic brands are accelerating their overseas expansion by leveraging their advantages in electrification and intelligentization, resulting in a continuous increase in global market share. Industry leaders such as Sany Heavy Industry and XCMG have already achieved a considerable level of overseas revenue, and there is huge potential for future growth in their global market share. Forklift giants Anhui Heli and Hangcha Group not only benefit from their overseas expansion but also optimize their product structure through lithium battery transformation, resulting in high earnings visibility, stable cash flow, and high dividend potential.
Consumer Manufacturing & Home Appliances: Companies like Midea Group, Haier Smart Home, Roborock Technology, Ecovacs, and Xinbao have a strong global supply chain layout, such as the “regional supply to regional” model. These companies have strong brand power, effectively mitigate trade risks, and directly benefit from the recovery in overseas demand. Midea Group, a leading white goods manufacturer, shifted from “China supplying the world” to “regional supply to regional” early on, establishing numerous production bases overseas. This parallel supply chain effectively addresses trade barriers. Xinbao, as a champion in small appliance exports, has a high proportion of overseas sales, currently has a low valuation (P/E ratio of approximately 10), and an attractive dividend yield, providing a good safety margin. Automotive and Parts: Companies like Taotao Automotive, CFMOTO, Juxing Technology, and Quanfeng Holdings have a high proportion of revenue from the US. Through their own brands and localized operations, they possess strong competitiveness in niche markets (such as all-terrain vehicles and power tools), resulting in high profit elasticity. Taotao Automotive, with its high proportion of revenue from the US, saw significant year-on-year net profit growth in the first half of 2025. Juxing Technology, as a tool manufacturer, benefits from expectations of tariff reductions and demand driven by a potential recovery in the US housing market.
Tire Manufacturing: Companies like Sailun Tire and Sentury Tire have high global production ratios. Their overseas factories (such as in Thailand) effectively avoid tariffs, benefiting from increased demand for replacement tires in the US. These leading companies have high compound annual growth rates in net profit. Sailun Tire reduces tariffs and transportation costs through its global production capacity layout (such as factories in Vietnam and Serbia), achieving industry-leading gross profit margins and maintaining a high long-term compound annual growth rate in net profit.
Investment Strategy and Risk Warning
Faced with such opportunities, investors can construct investment strategies from two perspectives. An aggressive approach focuses on companies with significant direct exposure to the US market (such as TaoTao Automotive and Jiangxin Home Furnishings), possessing their own brands and overseas channels (such as Anker Innovations and Roborock Technology), which have the greatest profit elasticity during tariff reduction cycles. A defensive approach allocates to industry giants that have already completed global supply chain layouts (such as Midea Group and Haier Smart Home) or niche leaders with lower valuations and higher dividend yields (such as Xinbao Shares and Anhui Heli), seeking better protection amidst uncertainty.
However, investment also comes with risks.
First, trade policies are subject to change, with the US-China trade relationship being a key variable. The subsequent implementation of relevant agreements and potential changes require close monitoring. Second, exchange rate fluctuations will have an impact; significant fluctuations in the RMB exchange rate will directly affect companies’ exchange gains and losses and product competitiveness. Finally, the sustainability of overseas demand is also a concern. Ultimately, demand depends on the economic conditions and interest rate cycles of overseas economies (especially the US). If the risk of economic recession increases, demand may fall short of expectations.
