2026 watchlist: My thoughts and equity picks for the year ahead Part 2

Will the year of the Horse deliver galloping stock returns

Jan 31, 2026

Happy New Year (新年快乐). It’s a New Year but guess who’s back, back again. Let’s continue on our quest for new year wealth and fortune.

Tak Lee Machinery (2102.HK)

Tak Lee Machinery Holdings Limited is a Hong Kong-based heavy equipment sales, leasing, and after-sales service provider that is the sole authorized Hitachi dealer in Hong Kong and Macau, along with other smaller brands like LaBounty and Ramfos. They were first listed on the HK GEM (Cantonese for shitco) index in 2017 before moving to the Main Board in 2020, if they were listed on the GEM Index now you best believe I wouldn’t cover them.

The company’s business is structured into three key segments, Equipment and parts sales, leasing, and lastly repair, logistics, and ancillary services.

You must have all heard about the recent HK fires tragedy that took the lives of many innocent souls and my heart and prayers go out to all of the victims, their friends and families. The tragedy really highlights the shoddy quality of construction prevalent all across Hong Kong and images of the pigeon hole HK apartments have been social media mainstays for years now. The day of reckoning for exploitative HK landlords, developers, and tycoons will likely come soon as a direct aftermath of the tragedy. There is absolutely no gainsaying the fact that large parts of HK’s housing stock needs rebuilding and the time has finally come to prioritise the basic human rights and decency for a large majority of HK’s population whose lives have been relegated to living in subhuman conditions.

While outside of the Mainland’s direct authority (if it was, then the disaster would’ve never happened), the Mainland can and has acted previously as a guardian to Hong Kong’s local government and is likely to now after the tragedy (Western propagandists campaign for HK “Independence” but blame the mainland for the tragedy, classic hypocrisy and narrative creation). This is likely to drive a boom in residential public housing property development in Hong Kong that equipment sellers like Tak Lee can take advantage of especially now that housing prices have corrected so much in Hong Kong.

Secondly, the Hong Kong local government has been coming up with plans to develop new areas across its territory especially in the New Territories. Government planned areas like Kai Tak, Cyberport, HKSTP have delivered mixed results when it comes to return on investment but this doesn’t really matter for equipment sellers, leasers, and maintainers like Tak Lee who make money from selling construction firms rather than building and operating the constructed structure.

HK construction has been an absolute dumpster fire over the last four years; a perfect storm of disasters including but not limited to failed “riots”, a notoriously overvalued property market even one of the most in the world, liquidity from the mainland drying up, COVID pandemic, lockdowns, and the emergence of a frictionless border between Hong Kong and Shenzhen damaging the monopoly position of a lot of Hong Kong commercial establishments have crushed property prices and development.

As a seller of construction along with other heavy equipment in exclusively Hong Kong and Macau, Tak Lee’s business as well as stock price have been severely adversely impacted. However the bottom seems to have set in.

Tak Lee demonstrated a remarkable turnaround in FY2025, with net profit surging 297.5% YoY to HK$28.160 million from HK$7.090 million in FY2024, backed by steady revenue growth and improved cost control; gross profit also rose 18.2% YoY to HK$67.750 million. As evidenced by these results, the bottom of the cycle seems to have set in. As property development in Hong Kong recovers Tak Lee is in pole position to capitalize and grow. Their competitive advantage stems from their brand exclusivity as well as their full-lifecycle one-stop service model that covers sales, leasing, repair, parts, and logistics addressing almost all possible needs that their customers might have.

Now finally coming to their valuation, Tak Lee trades at a price to earnings of merely 9x and has a dividend yield of almost 15%. They are completely debt free too. A heck of a deal to leverage the upcycle if you ask me.

Luxshare Precision (002475.SZ)

Luxshare Precision is a global leader in precision components and smart manufacturing. Its core edge lies in a multi-engine growth model: Apple’s AI hardware upgrade cycle, high-margin automotive electronics (post-Leoni acquisition), and AI-driven data center components.

2024 full-year results showed revenue of RMB 230 billion (up 20% YoY) and net profit of RMB 11.4 billion (up 22% YoY), while H1 2025 revenue reached RMB 124.5 billion (up 20.2% YoY) and net profit hit RMB 6.64 billion (up 23.1% YoY), beating consensus expectations. A standout was Q3 2025 gross margin at 12.8% (+1.1ppt YoY, +0.8ppt QoQ), driven by higher-margin auto and data center businesses, and successful integration of Leoni and Wingtech assets. The company guided FY25 net profit growth of 24–29% YoY, with iPhone 17 production ramp-up and Leoni’s profitability exceeding initial targets, now on track for net profit breakeven a year earlier than planned. In 2025, Luxshare launched a RMB 1–2 billion stock buyback (price cap RMB 86.96) and initiated a Hong Kong IPO application (submitted August 18, 2025) to fund global capacity expansion. R&D investment in the first three quarters of 2025 reached RMB 8.17 billion (up 16.8% YoY), focusing on SiP/COB packaging, 800G silicon optical modules, and 800V automotive high-voltage wiring harnesses to solidify technological moats.

Luxshare’s Apple partnership is the cornerstone: Luxshare is the only assembler besides Foxconn for iPhone Pro models, with full coverage across iPhone, AirPods, Watch, Mac, and Vision Pro. The upcoming iPhone 17/foldable models and Apple Intelligence rollout (4Q24–FY25) are set to drive share gains and margin expansion, while Vision Pro’s SiP packaging (integrating 20 chips into a coin-sized module) and in-house battery supply cut costs by 18% and boost gross margins. Beyond consumer electronics, the automotive segment has emerged as a key growth driver post-Leoni acquisition (completed in 2023). The acquisition catapulted Luxshare’s global high-voltage wiring harness market share from 3% to 12%, second only to Leoni’s 15% market share, and secured full-wiring orders for 800V platforms from five domestic NEV OEMs, with RMB 26 billion in hand orders. Automotive business currently boasts an 18% gross margin, and with scaling and technology migration (e.g., 800V high-voltage wiring harnesses), it is expected to contribute RMB 20 billion in net profit by 2026. In data centers and AI hardware, Luxshare’s COB-packaged 800G silicon optical modules reduce costs by 20% versus traditional solutions and have entered Amazon and Microsoft’s supply chains, while partnerships with Nvidia (237 joint patents in optical module packaging) and Apple (800+ joint patents in acoustics and wireless charging) create high barriers to entry. The company’s Xuanyuan AI platform optimizes smart manufacturing, cutting production cycle times by 12% and defect rates by 15%, while its vertically integrated model (components to modules to final assembly) enhances cost control and delivery speed.

Key growth catalysts for Luxshare in 2026–2027 include Apple’s AI hardware cycle, automotive scale-up, data center AI demand, and Hong Kong listing benefits. The Apple Intelligence ecosystem and new product launches (iPhone 17, foldables, AI glasses) are likely to drive revenues high as Apple’s sales have been exceeding expectations. Leoni’s integration is ahead of schedule, with net profit breakeven expected in 2024 (a year early), and automotive segment gross margins on track to reach the group average by 2025, adding RMB 5–8 billion in incremental profit. The data center and AI hardware business, including 800G optical modules and high-speed connectors, will benefit from the AI server boom, with revenue projected to grow 35–40% YoY in 2025, and gross margins of 18–20% (vs. consumer electronics’ 11–12%) lifting the overall group margin. The Hong Kong IPO, if approved, will expand international capital access and reduce financing costs.

Luxshare Precision’s partnership with NVIDIA is essential for anchoring it to the AI server boom and deepening its high-speed interconnect and thermal management moats. The collaboration centers on NVIDIA’s Blackwell architecture (GB200/DGX/NVL72) and spans full-stack hardware solutions, joint R&D, and supply chain integration, creating a high-growth, high-margin revenue stream outside its Apple core.

Luxshare has secured a role as a key hardware solutions provider for NVIDIA’s Blackwell GB200 NVL72 server racks, offering a full turnkey solution priced at ~RMB 209 million per rack (as of 2024). This includes 224G high-speed copper interconnects (cables, backplane connectors), 800G COB silicon optical modules (20% cost advantage vs. traditional solutions), cold-plate liquid cooling systems, and high-power DC power management units—all optimized for the 20TB/s memory bandwidth and 32,000 GPU cores in the GB200 NVL72 platform. Luxshare’s vertically integrated model (components to final assembly) delivers 15–18% gross margins for these AI server solutions, well above its consumer electronics segment’s 11–12% average.

The partnership is deeply technical, with 237 joint patents (as of 2025) focused on optical module packaging, high-speed signal integrity, and liquid cooling thermal design. Luxshare’s Xuanyuan AI platform further optimizes production, cutting defect rates by 15% and cycle times by 12% for custom components—critical for NVIDIA’s tight delivery timelines. Additionally, Luxshare has joined NVIDIA’s Developer Community to co-innovate on next-gen interconnects (e.g., 400G/800G copper cables) and thermal solutions for the upcoming Blackwell refresh and beyond.

NVIDIA’s GB200 NVL72 is expected to ship 20,000 racks globally in 2025, with Luxshare targeting 20–25% share of the total solution value, translating to RMB 8–10 billion in revenue from this segment alone. The company has also expanded beyond hardware into system integration for NVIDIA’s DGX Cloud Lepton platform, serving cloud providers like Amazon and Microsoft, which are scaling their AI infrastructure. This partnership diversifies Luxshare’s revenue mix: data center/AI now contributes 12% of total revenue (up from 5% in 2022) and is projected to reach 20% by 2027, reducing reliance on Apple (83% of 2024 sales) and enhancing long-term resilience.

Luxshare’s position as a “ one-stop shop ” for NVIDIA’s AI server hardware creates high entry barriers for competitors, as few firms can match its vertical integration and precision manufacturing capabilities. The collaboration has also accelerated its entry into high-growth data center ecosystems: its 800G optical modules are now in Amazon and Microsoft’s supply chains, while its high-voltage wiring harnesses (from the Leoni acquisition) are being adapted for NVIDIA’s DRIVE Thor automotive compute platforms, linking the AI server and automotive growth engines. Financially, the partnership is a key driver of margin expansion: data center/AI solutions are expected to add RMB 3–4 billion in incremental net profit by 2026, supporting the company’s FY25 net profit growth guidance of 24–29% YoY.

At current valuations Luxshare presents a very cheap way to ride the data center, NEV, and Apple upgrade cycle. In addition there can be surprises like their potential entry into humanoid robot components that can drive a meme rally.

Inspire Digital Enterprise (0596.HK)

Inspur Digital Enterprise is the most undervalued play to get exposure to China’s enterprise digital transformation sector. Inspur is catapulated by its dual exposure to cloud and AI and a high-stickiness SOE client base and massive potential upside from potential Hong Kong Stock Connect inclusion and AI-driven margin expansion. As of January 16, 2026, the stock price has traded down extensively as a direct consequence of a massive run up since last year which drove the valuation to exuberant levels. I believe that this presents an unprecedented opportunity to buy into this great company at a very fair price and allow me to explain my full thesis as to why. Full-year 2024 results showed total revenue of 82.9 billion RMB, with cloud revenue hitting 22.1 billion RMB, while net profit surged 90.8% year-over-year (YoY) to 3.9 billion RMB. H1 2025 data continued this positive trajectory, with total revenue reaching 43.5 billion RMB (up 11.2% YoY), cloud revenue jumping 30% YoY to 12.74 billion RMB and accounting for 29.3% of total revenue up from 23.5% in 2024.a clear sign of the cloud segment’s growing importance. Most notably, the cloud business, once a loss leader, turned operationally profitable in H1 2025 with a 1.6% margin, a stark reversal from a -7.0% margin in the same period a year prior, while management software maintained a healthy 16.9% margin and IoT solutions held steady at 1.0%. In November 2025, the company completed a strategic placement of HK$494 million, with 70% of proceeds allocated to AI and cloud research and development (R&D) and 30% to operational expansion. Backed by long-term investors like Yuanfeng Fund, which committed to a 2-year lock-up period, the fundraising strengthened the company’s R&D pipeline without excessive dilution of existing shareholders.

Inspur’s AI First strategy is the most significant differentiator, centered on the Haiyue Large Model V3.0—the first vertically focused enterprise service model with dual “model + algorithm” regulatory filings. This model has been deployed across 40+ high-value scenarios, including intelligent financial reconciliation, supply chain demand forecasting, and manufacturing process optimization, and when paired with Haiyue Commercial AI’s 100+ out-of-the-box agents, it integrates seamlessly with the company’s cloud ERP and IoT solutions to unlock cross-sell opportunities and expand average revenue per user (ARPU). On the cloud front, Inspur’s cloud-native ERP portfolio caters to enterprises of all sizes: GS Cloud for central SOEs, inSuite for mid-sized growing firms, and Yiyun Online for small and medium-sized enterprises (SMEs). Its iGIX PaaS platform leads the domestic low-code market, supporting multi-cloud deployment and hybrid system integration—a key requirement for SOEs transitioning from legacy on-premise systems to flexible cloud architectures. The company’s cloud revenue growth has been outpacing the domestic enterprise SaaS market average of 22% YoY, driven by its early-mover advantage in group management software and low-code development tools. Inspur’s client roster is a list of the who’s who of Chinese premier SOEs, serving 94 of China’s 97 central SOEs and 210 of China Top 500 companies, including industry leaders like China Energy Engineering, China Datang, and COFCO Group. These SOE clients typically sign 3–5 year long-term contracts, providing stable recurring revenue and insulating the company from short-term macroeconomic volatility. Unlike private enterprises, SOEs have dedicated digital transformation budgets mandated by national policy, making them resilient to IT spending cuts during economic slowdowns. The company’s IoT solutions, focused on high-potential sectors like smart manufacturing, smart grain storage, and smart pharmaceuticals, further deepening client stickiness by integrating with core production processes, creating high switching costs that deter competitors. Inspur benefits tremendously from China’s push for technology self-reliance, which mandates SOEs to replace international ERP systems such as SAP and Oracle with homegrown alternatives by 2027. The company’s GS Cloud has already replaced SAP in 12 central SOEs, with a pipeline of 30+ pending replacements as of H1 2025, unlocking a multi-billion RMB addressable market and reducing reliance on foreign software vendors.

There are several key catalysts stand to unlock significant valuation upside for Inspur Digital Enterprise in the coming 12–24 months. First, cloud margin expansion is poised to accelerate as scale effects kick in; management targets a cloud operating margin of 5–8% by 2026, and a 1% margin expansion alone would translate to approximately 0.5 billion RMB in incremental net profit, reducing the forward PE ratio to 12x based on 2025 estimated net profit of 5.3 billion RMB. Second, potential inclusion in the Hong Kong Stock Connect could drive a significant stock price rally, as the company has completed the necessary regulatory filings. Currently, foreign ownership stands at only 5%, well below the 20% average for peer stocks in the connect, and mainland investors have a strong preference for SOE-focused digital transformation players, which would bring a new pool of capital to the stock. Third, AI-driven ARPU growth is set to lift gross margins across the software segment; the Haiyue Large Model enables the company to upsell premium AI features to existing clients. Fourth, IoT project cash flow normalization will further improve investor sentiment, as delayed payments that weighed on 2024 cash flow are resolved with project completions and milestone payments from clients, solidifying the company’s financial stability.

Now coming to the valuation, Inspur trades at a TTM PE of 12x and 1x price to sales vs its closest peer Kingdee that trades at a price to sales of 7.6x making the stock a massive steal in my opinion.

JCET (600584.SH)

JCET is the largest OSAT in mainland China and top 3 globally (behind ASE and Amkor), with a market position built on full-spectrum advanced packaging capabilities, global operational diversification, and exposure to high-growth end-markets including AI, high-performance computing (HPC), automotive, and storage. It has a competitive moat in HBM, 2.5D/3D, Chiplet, XDFOI, and CPO, with industry-leading manufacturing yields: HBM3e at 98.5% and NVIDIA H200 packaging at 99.2%, which have secured exclusive HBM3e orders from SK Hynix and certification as the only mainland-based OSAT for NVIDIA’s key AI products. Technological leadership is reinforced by the XDFOI multidimensional heterogeneous integration platform, which entered mass production in 2025 and supports 4nm-node multi-chip system integration for international clients; in early 2026, JCET delivered qualified silicon photonics engine samples built on this platform, marking a key milestone in CPO development for next-gen data center and HPC architectures, with efficiency and bandwidth improvements that position it ahead of many domestic peers in next-generation computing integration. The company holds over 3,000 patents across wafer-level, system-level, and advanced stacking technologies, creating a durable barrier against copycat competition and supporting sustained margin expansion as high-value mix rises .

Client diversification is a defining structural strength, with coverage of more than 85% of the world’s top chip designers, including NVIDIA, AMD, Google, Qualcomm, Huawei, and major IDMs, alongside long-term relationships (≥5 years) and repeat purchase rates above 90%, providing order visibility up to 12 months and insulating revenue from single-sector downturns. Geographic and end-market balance further reduces cyclical risk: overseas revenue accounts for roughly 78% of total sales, supported by production bases in Korea, Singapore, and Jiangyin, enabling a “China for China, overseas for overseas” strategy that mitigates geopolitical supply-chain disruptions . Recent strategic acquisitions, such as the integration of Sandisk’s semiconductor packaging unit, have catalyzed explosive growth in storage packaging, with segment revenue surging over 150% year-on-year in first-half 2025, expanding penetration into the Apple supply chain and solidifying leadership in NAND and DRAM packaging as the storage industry enters a cyclical upswing with price increases projected to extend into 2026 . Automotive electronics represents another high-margin growth pillar: holding IATF16949 certification and with the Lingang automotive-dedicated plant ramping production, automotive packaging revenue jumped 31.3% in the first three quarters of 2025, with clients including Tesla, BYD, and Infineon; management targets automotive to comprise 25% of total revenue by 2026, capitalizing on the sharp rise in semiconductor content per vehicle (from ~$500 for internal combustion to $1,500–2,000 for EVs) .

Financially, JCET entered a clear inflection point in 2025, with Q3 revenue hitting a quarterly record of 10.06 billion yuan, bringing nine-month revenue to 28.67 billion yuan, up 14.78% year-on-year; consolidated gross margin improved sequentially to 13.74% in Q3, lifted by advanced packaging (gross margins >25%) and storage packaging (up to 42%) gradually replacing lower-mature standard packages in the revenue mix. Net profit for the first three quarters stood at 9.54 billion yuan, with Q3 net profit rising 80.6% quarter-on-quarter, signaling operational leverage and efficiency gains from scale and product mix shifts. Operating cash flow remained robust at 3.693 billion yuan through September 2025, underscoring strong cash conversion from top-line growth and reliable customer collections, a critical advantage in the capital-intensive OSAT model. Balance-sheet health is manageable, with an asset-liability ratio of approximately 43.10%, providing headroom for continued capital expenditure on advanced packaging and automotive capacity expansions; however, persistent high capex translates to recurring depreciation pressure, which will weigh on near-term margin expansion until high-end lines reach full utilization. For 2026, consensus forecasts point to net profit in the range of 22–26 billion yuan, representing 57–86% year-on-year growth, with upside to 30 billion yuan if HBM3e and domestic AI chip packaging orders exceed expectations, driven by advanced packaging’s projected rise to 60% of total revenue, storage segment price hikes, and automotive volume growth.

Strategically, JCET is transitioning from volume-led growth to profit-led expansion, prioritizing yield enhancement, product mix optimization, and operational efficiency over pure capacity addition. The company’s 1.346-billion-yuan industrial fund investment extends its influence across the semiconductor supply chain, nurturing upstream equipment and material partners to reduce import dependency and build a more resilient, integrated ecosystem that supports long-term self-sufficiency. While global peers like ASE and Amkor retain scale and established customer relationships, JCET’s combination of advanced technological equivalence, cost competitiveness, and state-backed strategic support creates a favorable position in both international and China-centric supply chains, particularly as multinationals diversify away from single-region reliance.

For investors, JCET functions as a core, relatively defensive holding in the semiconductor sector, offering exposure to the post-Moore’s Law advanced packaging revolution and China’s semiconductor self-sufficiency drive with lower single-client concentration risk than many domestic peers.

JCET and its peer Tongfu are the reason why China can produce 5nm chips with DUV as the Chinese OSAT companies manually and physically etch together chipsets and with chip production exploding both in China and overseas because of AI demand, OSAT is an excellent proxy to play this trend.

Changan Automobile (000625.SZ)

Changan Automobile is a top-tier Chinese domestic passenger vehicle leader and central SOE auto flagship marquee undergoing a full pivot from traditional ICE cars to an intelligent low-carbon mobility tech firm, underpinned by a tiered new energy brand matrix, in-house core tech, large-scale manufacturing, and accelerating globalization. Its investment narrative centers on structural upgrade: shifting growth from legacy fuel models to high-margin intelligent EVs, scaling volume to profitability, and expanding from domestic dominance to a globally competitive player, with multiple growth drivers that lower single-segment reliance and support sustained re-rating.

The company’s defining strength is a three-brand new energy matrix that covers ¥80,000–¥700,000 with clear segmentation, avoiding internal overlap and enabling full-market penetration. Avatr anchors the high-end, partnering with Huawei and CATL, delivering models like Avatr 11/12 with Huawei ADS 4.0; it posted ~122,000 units in 2025, up 180% YoY, with consistent monthly sales above 10,000 and industry-leading per-unit margins, lifting the overall product mix and brand premium. Deepal targets the mainstream volume segment (¥150,000–¥300,000), with SL03/S7 as core models; 2025 sales hit ~480,000 units, up 60% YoY, achieving steady profitability via scale and cost control, and expanding into Europe to break the “low-price Chinese car” stereotype. Changan Qiyuan dominates the entry-to-mid mainstream (¥80,000–¥180,000), posting ~850,000 units in 2025, up 120% YoY, rapidly scaling volume while narrowing losses by 48–50% as utilization rises. Together, these brands lifted 2025 new energy sales to roughly 1.11 million units (up 51% YoY), with a penetration rate near 38.1%, ranking among China’s top three NEV makers and replacing fuel cars as the primary growth engine. Legacy fuel models remain a stable cash cow, providing steady cash flow to fund R&D and NEV expansion while the portfolio transitions.

Changan sustains leadership via heavy, consistent R&D, committing ~5% of annual revenue to innovation, with cumulative spending exceeding ¥110 billion over the past decade and plans for over ¥200 billion in the next decade, paired with a “six countries, ten locations” global R&D network. In NEV tech, it has developed the Original Force Super Electric Drive and in-house power systems; the “Golden Shield” all-solid-state battery hits 400Wh/kg with >1500km range, with functional prototypes unveiled in late 2025, targeting mass production to lead next-gen energy density and safety. For intelligence, it holds the first national L3 autonomous driving license and operates the Tianshu ADAS system, supporting urban and highway navigation, with AEB performance up to 135km/h, and is rolling lidar into models under ¥100,000 to democratize advanced ADAS. The SDA central computing architecture enables hardware upgradability and software subscription, creating recurring revenue and long-term user lifecycle value, a key differentiator from traditional manufacturers. Forward-looking bets include humanoid robots and flying cars, with the first flying car due in 2026 and volume production targeted for 2028, extending the tech boundary beyond core autos.

2025 marked a structural inflection for profitability and mix. Nine-month revenue reached ¥114.927 billion, with Q3 revenue rebounding strongly to ¥42.236 billion (up 23.36% YoY) as NEV and overseas business accelerated . Consolidated gross margin climbed to 14.99% by Q3 2025, with NEV margin hitting 18.2% (up 2.1pp YoY), driven by Avatr’s high margins, Deepal’s scale leverage, and Qiyuan’s loss reduction. Net profit for the first three quarters stood at ¥2.145 billion, with full-year consensus around ¥7.28 billion, roughly flat YoY but with a sharply improved structure: low-margin fuel revenue shrank while high-margin NEV and overseas sales expanded, setting up stronger earnings growth in 2026. Operating cash flow turned positive in Q3, reaching ¥1.555 billion through September 2025, reflecting improved collection and operational efficiency as NEV scale kicks in. The balance sheet shows an asset-liability ratio of 57.55% (Q3 2025), manageable for an automaker, with liquidity metrics (current ratio ~1.22) supporting capacity expansion and R&D without excessive leverage risk.

Globalization is emerging as a second growth curve under the “Haina Baichuan” plan, shifting from simple exports to localized R&D, production, and sales. 2025 overseas sales hit 637,000 units (up 18.9% YoY), revenue ~¥56 billion (up 35.2% YoY), accounting for 18.5% of total revenue, with overseas unit margins ~2.5pp above domestic levels. The Thailand Rayong NEV plant, its first overseas full-process NEV base, launched in 2025 with initial capacity of 100,000 units, local sourcing near 40%, and plans to lift to 70%+ by 2027–2028, anchoring ASEAN right-hand-drive markets . It operates 9 overseas plants and targets 20 by 2030, with a presence in over 100 countries and 14,000+ sales outlets; European subsidiaries in Germany and the UK, plus parts and training hubs in the Netherlands and UK, support deep local operations in developed markets. The 2026 overseas target is 750,000 units, with a 2030 goal of 1.2 million units and >30% of total sales from abroad, diversifying away from domestic price competition and adding geographic resilience.

Now coming to near term catalysts. Avatr is a Huawei affiliated marquee that Changan owns 40% of. In 2025 Avatr sold a total of 122,000 units. Changan wishes to spin this unit off and luckily for us there’s another listed Huawei affiliate automaker. Seres sold a total of 492,037 units in 2024 and they have a market cap of 214 billion RMB. Using the same RMB market cap/vehicle metric to value Avatr gets us a potential market cap of 48 billion RMB vs Changan’s market cap of 97 billion RMB. Quite a good proposition if you ask me.