UBS: Overseas Revenue Contribution of A-Share Non-Financial Companies to Reach 25% by 2030
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UBS: Overseas Revenue Contribution of A-Share Non-Financial Companies to Reach 25% by 2030
Using a bottom-up methodology, UBS forecasts that the overseas revenue contribution of A-share non-financial companies will rise from 19% in 2025 to 25% by 2030, with power equipment and automotive supply chains leading overseas expansion.
- Overseas revenue contribution of A-share non-financial companies expected to reach 25% by 2030, up from 19% in 2025.
- Assuming a 5% CAGR in total revenue from 2025–2030, A-share gross profit could increase by 35% by 2030 relative to 2025.
- Power equipment (wind power, new materials) and automotive supply chains are the most dynamic sectors driving overseas revenue growth.
- Europe, ASEAN, and Africa are projected to be the primary sources of future overseas revenue growth.
- Overseas gross margins across most relevant subsectors are expected to expand, driven by higher pricing and improved overseas capacity utilization.
Report interpretation
Overview
This report, published by UBS, quantitatively tracks the globalization progress of Chinese industrial enterprises. Its central conclusion is that overseas expansion remains one of China’s most important investment themes. Drawing on historical data and UBS analysts’ bottom-up forecasts, the report projects that the overseas revenue contribution of A-share non-financial companies will rise from 19% in 2025 to 25% by 2030. With accelerating overseas revenue growth and higher overseas gross margins, this trend is expected to exert a positive impact on overall gross profit. Sensitivity analysis suggests that, under specific assumptions, A-share gross profit could increase by 35% by 2030 relative to 2025.
Core views
Continued Rise in Overseas Revenue Contribution: Data show that the overseas revenue contribution of A-share non-financial companies has increased from 17% in 2024 to 19% in 2025. UBS believes that Chinese firms’ global competitiveness—underpinned by supply chain advantages and sustained R&D investment—will continue translating into greater overseas revenue exposure. Moreover, geopolitical events such as the Middle East conflict may disrupt global supply chains; given Chinese companies’ demonstrated supply chain resilience during the pandemic, such disruptions may actually benefit China’s global expansion. Drivers and Regional Distribution: Among the 17 subsectors covered by UBS, 14 are identified as primarily export-driven in terms of overseas revenue growth. Beyond traditional export models, the 'China +1' strategy is also a key driver. Regionally, Europe and ASEAN are the main contributors to overseas revenue growth—a finding consistent with UBS’s monthly China Export Monitor. Meanwhile, with macroeconomic conditions expected to improve in 2026–2027 and favorable commodity prices, Africa is viewed as the next key growth engine. Key Beneficiary Sectors: Based on forecasts by UBS China analysts, power equipment and automotive supply chain companies exhibit the strongest overseas revenue growth momentum. Specifically, Chinese wind power equipment and new materials companies are projected to achieve over 25% CAGR in overseas revenue between 2025 and 2030, accompanied by expanding overseas gross margins. Other sectors—including home appliances, retail, and healthcare—also demonstrate distinct overseas expansion logic and margin trends. Profitability Impact Assessment: Overseas gross margins across most relevant subsectors are expected to expand, primarily driven by higher pricing and improved overseas capacity utilization. Sensitivity analysis indicates that, assuming a 25% overseas revenue contribution by 2030 and stable overseas gross profit margins, A-share aggregate gross profit could increase by 35% by 2030 relative to 2025—under the assumption of a 5% CAGR in total A-share revenue from 2025 to 2030.
Analysis framework
UBS employs a hybrid top-down and bottom-up analytical framework. First, it leverages the UBS Evidence Lab’s 'China Export Monitor' to track macro-level export trends. Second, it aggregates bottom-up forecasts from UBS sector analysts covering individual stocks—including overseas revenue sources, growth drivers (exports or 'China +1'), gross margin trends, and preferred markets. Finally, a sensitivity analysis model quantifies how changes in overseas revenue contribution and gross margin affect aggregate gross profit for A-share non-financial companies. This approach aggregates micro-level company forecasts into macro-level sector trends, enhancing the credibility of conclusions.
Methodology notes
Volume-Price Decomposition
In analyzing overseas gross margin expansion, the report attributes it to 'higher pricing' and 'rising overseas capacity utilization'—a classic volume-price analytical logic that helps readers understand the micro-level sources of profit growth.
DCF (Discounted Cash Flow)
The report notes the use of DCF, target P/E multiples, EV/EBITDA, and SOTP (Sum-of-the-Parts) valuation methods for Chinese industrial companies, indicating that stock recommendations are grounded in cross-validated mainstream valuation models.
Upstream-Midstream-Downstream Industry Chain Transmission
The report specifically highlights 'power and automotive supply chains' as particularly active in overseas expansion, reflecting an industry chain perspective—from end products (e.g., complete vehicles) upstream to components and equipment (e.g., wind power equipment, new materials).
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- BYD (1211.HK)Top pick in passenger vehicle segment, benefiting from exports and the 'China +1' strategy
- Strengths
- Strong growth potential in overseas markets (ASEAN, EU, Latin America); gross margin expansion
- Dongfang Electric-A (600875.SS)Top pick in power equipment segment, benefiting from exports and the 'China +1' strategy
- Strengths
- Significant upside in EU, North America, and Latin American markets; gross margin expansion
- Sinotruk (3808.HK)Top pick in commercial vehicle segment, benefiting from exports
- Strengths
- Strong growth potential in EU and African markets
- Weaknesses
- Flat gross margin trend
- Ninebot (689009.SS)Top pick in two-wheeler segment, benefiting from exports and the 'China +1' strategy
- Strengths
- Strong growth potential in ASEAN and EU markets
- Weaknesses
- Flat gross margin trend
- Longi (601012.SS)Top pick in solar energy segment, benefiting from the 'China +1' strategy
- Strengths
- Strong growth potential in Middle East, ASEAN, and African markets
- Weaknesses
- Flat gross margin trend
- Anker (300866.SZ)Top pick in home appliance segment, benefiting from exports and the 'China +1' strategy
- Strengths
- Strong growth potential in ASEAN and EU markets; gross margin expansion
- Miniso (MNSO.N)Top pick in retail segment, benefiting from exports
- Strengths
- Strong growth potential in North America and EU markets
- Weaknesses
- Flat gross margin trend
- XCMG (000425.SZ)Top pick in construction machinery/mining equipment segment
- Strengths
- Strong growth potential in African and ASEAN markets; mining equipment gross margin expansion
- Weaknesses
- Flat gross margin trend for construction machinery
- CNOOC-H (0883.HK)Top pick in oil & gas segment, benefiting from exports and the 'China +1' strategy
- Strengths
- Strong growth potential in European, Latin American, and Middle Eastern markets; gross margin expansion
- Kingfa (600143.SS)Top pick in new materials segment, benefiting from exports and the 'China +1' strategy
- Strengths
- Strong growth potential in European and Asian markets; gross margin expansion
Key data
- 2030E Overseas Revenue Contribution Forecast25%For A-share non-financial companies; 19% in 2025
- 2025–30E Potential Gross Profit Increase35%Based on 25% overseas revenue contribution, stable overseas GPM, and 5% CAGR in total revenue
- Wind Power/New Materials Overseas Revenue CAGR25%+Forecast compound annual growth rate, 2025–2030
- 2024–2025 Change in Overseas Revenue Contribution+2 percentage pointsRising from 17% to 19%
Impact & implications
The report argues that Chinese companies’ globalization represents not only revenue scale expansion but also enhanced profitability quality. As the share of high-margin overseas business rises, the overall profitability of related companies is expected to strengthen. For investors, priority should be given to firms with clear overseas expansion logic in sectors such as power equipment and automotive supply chains—and with established footprints in Europe, ASEAN, or Africa. These firms are well-positioned to gain greater market share and pricing power amid global supply chain restructuring.
Risks
- Macroeconomic Investment Contraction: Persistent weakness in China’s economy could reduce demand for industrial goods and compress import/export volumes, slowing growth.
- Policy Risk: The removal of supportive policies—such as tax incentives for high-tech enterprises—could negatively impact corporate profitability.
- Intensified Competition: Fierce competition—both domestic and international—could lead to loss of market share.
What to watch
- China’s export monitoring data (particularly shipments to Europe, ASEAN, and Africa)
- Actual gross margin expansion across subsectors’ overseas operations
- Implementation progress of the 'China +1' strategy in Southeast Asia and other regions