UBS China March field research: focus on 2025 results and 2026 outlook, with structural opportunities and sector divergence coexisting

Overview

This is a UBS China monthly field-research report that, based on onsite visits across China, management meetings, conference calls, and UBS quantitative corporate access data, discusses 2025 performance and 2026 outlook. The report covers changes in investor focus across Techtronic, autos and electric two-wheelers, COSCO Shipping, semiconductors, healthcare equipment and services, and capital goods.

Core views

The core view is that sector performance is clearly divergent: Techtronic benefits from the Milwaukee brand, AIDC-related structural opportunities, product innovation, and execution capability, and management remains confident about mid-to-high single-digit revenue growth and margin improvement; the electric two-wheeler industry is under short-term pressure from reduced subsidies, stricter regulation, and inventory transition, making 2026 potentially tougher, but rising demand for electric motorcycles could benefit names like Ninebot and CFMoto that have electric-motorcycle capabilities. Quantitative research shows investor interest rising in semiconductors, healthcare equipment and services, and autos, while sectors like capital goods saw lower visits and are relatively crowded. COSCO underperformed estimates, but management sees limited revenue impact from geopolitical conflict, with supply-chain volatility and electronics demand potentially supporting 2026 freight rates.

Analysis framework

The report combines top-down and bottom-up approaches: on one side, it uses PMI, sector access heat maps, a crowding factor, and month-on-month changes in corporate access to track macro and sector capital attention; on the other, it uses earnings calls, management discussions, and expert/dealer conference calls to assess company- and segment-level operating trends.

Methodology notes

• Quantitative research metricCompany-access share and month-on-month change

  Measures changes in investor attention to industries and companies using onshore listed-company institutional research data.

  UBS’s quantitative team summarizes each sector’s share of company-access events and tracks month-on-month changes to gauge how investor interest is rotating across sectors.

• Quantitative risk indicatorCrowding indicator

  Measures whether trading or attention in an industry is becoming crowded, with a typical range from about -30 to 30.

  A value of -30 indicates not crowded, while 30 indicates highly crowded. The report combines access changes with crowding to identify sectors with rising attention that are not yet crowded, and sectors where access is falling but are still crowded.

• Valuation methodDCF model

  Derives target price or value by discounting future cash flows.

  The report notes that Techtronic and Sunresin use a three-stage DCF model, and that CFMoto Power can also be valued using a DCF model.

• Valuation methodEV/C method

  A valuation method used to determine a target price for COSCO Shipping.

  The report only states that EV/C is used to assess COSCO Shipping and does not provide specific input parameters in the source text.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Techtronic Industries / TTI / 0669.HK

  Core company case, rated Buy in the report, with discussion of 2025 performance and future outlook.

  Strengths

  Strong Milwaukee growth of 10-12% expected in 2026; the company has product innovation, operating capability, and AIDC-related structural opportunities; management targets EBIT margin of 10% by 2027.

  Weaknesses

  Ryobi growth is lower at around 3%; weaker discretionary income may affect demand for tools.

  Comparison

  Management remains confident the company can outperform peers, similar to past cyclical periods.

  Risks

  U.S. consumer weakness versus expectations, higher commodity prices and RMB appreciation, marketing spend overruns, and policy changes such as environmental regulations and tariffs.

• Electric two-wheeler industry

  Industry conference call and expert/dealer research subject.

  Strengths

  The 2026-model transition is expected to lift unit prices by around 10%, and the share of electric motorcycle demand may rise.

  Weaknesses

  Reduced subsidies, tighter regulation, new national standards delaying product launches, and pressured Q1 2026 retail demand.

  Comparison

  The sales ratio of electric motorcycles to regular electric bicycles may rise from 2:8 in 2025 to 5:5 or higher.

  Risks

  Demand could decline 0-10%, slow inventory digestion, intensified price competition, and inventory pressure from kilometer-zero used vehicles of smaller brands.

• Ninebot

  Potential OEM beneficiary from rising electric motorcycle demand.

  Strengths

  Has strong competitive positioning in electric motorcycles and may benefit from demand shifting from e-bikes to electric motorcycles.

  Weaknesses

  Affected by industry sales trends, price wars, and progress of new businesses.

  Comparison

  Along with CFMoto, it is seen as a preferred beneficiary of electric motorcycle demand growth in the report.

  Risks

  Industry sales decline from bus or metro substitution, heightened competition, and underperformance of new businesses such as robot lawnmowers and off-road vehicles.

• CFMoto / Zeeho

  Potential OEM beneficiary from rising electric motorcycle demand.

  Strengths

  Strong electric motorcycle capability with potential benefit from demand migration under the new standard.

  Weaknesses

  Large-displacement motorcycle and four-wheeler businesses face risks from commercialization, tariffs, and product safety.

  Comparison

  Like Ninebot, it is listed as a favored OEM for electric motorcycle demand upside.

  Risks

  Unclear relaxation of restrictions on large motorcycles, rising input costs, weak acceptance of large-displacement motorcycles, and uncertainty around tariff exemptions on four-wheeler exports.

• COSCO Shipping Holdings-A / 601919.SS

  Transportation-segment company case, rated Buy in the report.

  Strengths

  Volume growth was positive year-on-year, port throughput rose, Middle East tensions have limited revenue impact, and fuel cost pressure can be partly offset by surcharge clauses.

  Weaknesses

  Recurring net profit fell 37% year-on-year in 2025, container shipping revenue fell 7% year-on-year, and international route revenue fell 14% year-on-year.

  Comparison

  Transpacific route performance was better than the market average, and transpacific contract negotiations are expected to result in volume roughly on par with last year.

  Risks

  More intense shipping competition, recession-driven suppression of container volumes, decarbonization compliance costs not fully pass-throughable, and possible regulatory scrutiny if profitability rises.

• Semiconductor sector

  Key sector in March investor access and crowding analysis.

  Strengths

  Leading month-on-month gains in access share and rising investor attention.

  Weaknesses

  The chart shows a positive crowding coefficient, implying some trading-crowding risk.

  Comparison

  Together with healthcare equipment and services and automotive, it was one of the three sectors with the clearest increase in attention in March.

  Risks

  If rising attention combines with crowding, subsequent price volatility may be amplified.

• Healthcare equipment and services sector

  Key sector in March investor access and crowding analysis.

  Strengths

  Access frequencies rose while crowding remains in negative territory, indicating better attention with still moderate crowding.

  Weaknesses

  No specific profitability or valuation data is provided in the report.

  Comparison

  Relative to semiconductors, crowding in healthcare equipment and services is lower.

  Risks

  If access enthusiasm continues to rise, crowding could gradually increase.

• Capital goods sector

  Negative sector in March access decline and crowding observations.

  Strengths

  No clear positive fundamental catalyst is presented in the report.

  Weaknesses

  Largest drop in company-access share and crowding remains relatively high.

  Comparison

  Compared with semiconductors, healthcare equipment and services, and automotive, capital goods appears weaker.

  Risks

  The combination of declining attention and high crowding may reflect capital outflows or elevated trading risk.

Key data

• TTI 2026 overall revenue growth guidancearound 6% or mid-to-high single digitsManagement expects overall revenue growth of around 6% in 2026, and the report summary also describes this as the mid-to-high end of single digits.
• Milwaukee business growth outlook10-12%The Milwaukee brand is seen as the core driver of TTI’s revenue growth.
• Ryobi business growth outlookaround 3%New product launches, business scope expansion, and U.S. penetration of about 50% support Ryobi.
• TTI 2027 EBIT margin target10%Management expects EBIT margin to reach 10% by 2027.
• Electric two-wheeler 2026 demand outlookdown 0-10%The report cites participant expectations that market demand in 2026 may decline by 0-10%.
• Electric two-wheeler 2026 Q1 retail demandyear-on-year possibly down 12%Dealers reported quarter-on-quarter retail demand to be lower year-on-year, with a relatively high share of kilometer-zero used vehicles.
• 2026-model electric two-wheeler price changetypically about 10% higherAfter switching inventory to 2026-model vehicles, unit prices are expected to rise accordingly.
• Electric motorcycle vs. standard e-bike sales ratioabout 2:8 in 2025, potentially rising to 5:5 or higherNew regulatory standards could shift demand from non-compliant e-bikes toward electric motorcycles.
• COSCO 2025 recurring net profitdown 37% year-on-yearBelow both UBS and market expectations, by 5% and 2% respectively.
• COSCO 2025 dividendRMB 0.44 per shareCorresponds to an estimated cash dividend payout ratio of about 50%.
• COSCO container shipping revenue and volumerevenue down 7% year-on-year, volume up 6% year-on-yearInternational route revenue declined 14% year-on-year, while revenue per TEU on domestic routes was stable.
• COSCO capacitycurrently about 3.6 million TEU, up to 4.42 million TEU once orders are deliveredTwelve new vessel deliveries in 2025 increased total capacity by about 200,000 TEU, and 54 additional new vessels were ordered.
• COSCO EU emissions compliance costUSD 160 million to 170 millionEstimated compliance cost for the 2025 fleet.
• China Manufacturing PMI50.4 in March 2026, up 1.4 percentage points month-on-monthThe table shows February at 49.0, with March rebounding to 50.4.
• Top sectors with rising access share in MarchSemiconductors, Healthcare equipment and services, AutomotiveThese sectors led month-on-month growth in company access share.
• Top sectors with declining access share in MarchCapital goods, Durable consumer goods and apparel, Business and professional servicesCapital goods fell by about 4.5 percentage points, durable consumer goods and apparel by about 3.5 percentage points, and business and professional services by about 2.5 percentage points.

Impact & implications

For investors, the report suggests distinguishing between structural opportunities and cyclical pressure within China assets. Although attention is rising for sectors such as semiconductors, healthcare equipment and services, and automobiles, trading risk should still be assessed with the crowding factor. Companies like TTI with product innovation, brand strength, and structural growth drivers are more likely to navigate macro uncertainty. The electric two-wheeler industry faces elevated short-term demand and regulatory pressure, but rising electrified-motorcycle penetration could create relative beneficiaries. The shipping segment is influenced by freight rates, supply-chain disruptions, fuel costs, and carbon compliance costs.

Risks

• U.S. consumer-linked markets may underperform expectations, which could hurt sales of power tools, floor-care equipment, and home appliances.
• Rising commodity prices and RMB appreciation could compress TTI margins.
• Marketing overspend and changes in environmental regulations, tariffs, and similar policies could affect profitability.
• Electric two-wheelers face reduced subsidies, stronger regulation, delayed product launches, and inventory digestion, with demand potentially falling in 2026.
• In shipping, rising competition, recession risk, higher carbon compliance costs, and regulatory intervention could affect COSCO’s profitability.
• For CFMoto, restrictions on large motorcycles may not be relaxed as expected, raw-material costs may rise, and product safety issues may emerge.
• Rising sector access intensity and crowding could lead to crowded positioning and drawdowns.

What to watch

• Whether TTI’s 2026 revenue growth reaches around 6% or the mid-to-high single digits, and whether Milwaukee growth reaches 10-12%.
• Whether TTI can achieve a 10% EBIT margin in 2027.
• Whether Q2 2026 sales of electric two-wheelers rebound as expected.
• The pace of 2026-model electric two-wheeler price uplift and new product launches.
• Whether the sales ratio of electric motorcycles to regular electric bicycles shifts from 2:8 toward 5:5.
• Changes in company-access intensity and crowding in semiconductors, healthcare equipment and services, and automotive.
• Whether declining access in sectors like capital goods, business and professional services continues.
• Whether China manufacturing PMI and new orders sustain improvement after rebounding in March 2026.
• COSCO transpacific contract negotiations, fuel surcharge clauses, and the pass-through of EU carbon compliance costs.
• Subsequent impact of Middle East tensions on shipping network resilience, contract fulfillment, and freight levels.