The world’s largest elevator market. China has a vast property sector, a large stock of old buildings that need modernising, extensive plans to broaden the country’s rail network, and a major government initiative is underway to retrofit ageing walk-up residential blocks with lifts. That’s good news for the manufacturers of elevator and escalators. The major cloud hanging over the industry is the move by policy makers to keep the real estate market in check. However, we see the retrofitting programme, which could add up to 3m elevators to the market and benefit millions as the population ages, as a long-term growth driver. With the world’s largest elevator market entering a steady growth stage, we forecast a sales volume CAGR of 4% over 2020-22e.

Domestic companies are closing the gap. Global brands dominate the industry, with a market share of 60-70% in China. But the top domestic companies are closing the gap. We believe they can grow their market share and deliver stronger returns than foreign rivals as they increase their sales to the top property developers and win more contracts for rail projects due to their improving competitiveness.