According to Goldman Sachs, equity investors are cautious about the rapid overseas expansion of Chinese companies, driven by weak consumer demand at home. Trina Chen, co-head of Greater China equity research, noted that while companies like Geely are looking to enter markets such as Canada, investors are primarily focused on ensuring these expansions are profitable.
The firm's analysis predicts that Chinese companies' overseas market share could rise to 31% by 2035 from 18% currently, covering sectors like express delivery and industrial robots. Chen cautioned that investors are wary of 'involution,' where increased competition could erode profit margins, and geopolitical factors could further complicate stock performance.
She pointed out that a significant loss in market share could drastically reduce a company's market capitalization. Moreover, Chinese brands are increasingly becoming established competitors in emerging markets, reshaping market dynamics beyond just the U.S. and Europe