China Industrials: Two high-conviction ideas with global demand drivers
Industrials
Ninebot (689009 CH) - Revenue +50% in 2025, electric two-wheeler profit +62%. The lawnmower robot business grew +124% and is structurally positioned to benefit from EU policy-driven industry consolidation. Dual-brand strategy (Ninebot + Segway) targeting 20% market share. This is a Chinese industrial with genuine European distribution infrastructure - a rare combination given current geopolitical sensitivities around China supply chains.
Orient Cable (603606 CH) - RMB 19.3bn order book, 60% in high-value submarine and high-voltage cable. Delivered UK Inchcape project ahead of schedule. China offshore wind accelerating to 12GW+ in 2026, European energy independence driving parallel demand and high-margin export cable mix rising. The 15th Five-Year Plan implies installed capacity doubling vs. the 14th. Order visibility is as clean as it gets in Chinese industrials.
2022 China New Energy and Machinery Investment Strategy
1) Wind & Power installations to enter a high growth stage after 1Q22 (Ningbo Orient Wires, Luoyang Xinqianglian).
2) PV installations to see strong demand this year. Alpha opportunity re. granular silicon (GCL-Poly); industry beta opportunity of PV EVA film is also clear (Hangzhou First Applied Material).
3) EV Supply Chain: Upstream lithium sector will be the only area that can justify the high valuation due to unbalanced demand/supply dynamics (Keda Industrial).
4) Two-Wheel EVs: New safety standards will see leading companies further increase market share (Yadea).
Industrials
Offshore wind power is taking off in China’s south coastal region opening up a market space of hundreds of billions of Yuan for Orient Cables. As offshore wind power develops from the intertidal zone to the further offshore zone, the increasing installation distance will drive demand for subsea cables. Product upgrades are expected to boost gross margins. Horizon Insights also highlights the relatively stable competitive landscape (high barriers to entry) and new opportunities for the group's export business.
