Rising middle class and upgrading of lifestyle

We have been long-term shareholders of a Electrical Appliances Manufacturer in our Greater China portfolios. The manufacturer is China’s largest home appliances company, with a comprehensive product portfolio that includes air conditioners, refrigerators, washing machines and small home appliances.

The manufacturer is a dominant consumer franchise and we believe they are well-positioned to benefit from rising income levels and the premiumisation trend in China (as incomes rise, consumers demand better quality and more expensive products).

The manufacturer’s strong emphasis on research and development have improved its product quality over the years; and its market share in most home appliance categories in China ranks it among the top three. Meanwhile, its acquisitions of a top industrial robotics company and a Japanese premium brand home appliances add new areas of growth, especially in areas such as logistics and industrials.

Market leader, gaining share

Source: FactSet, company annual report, FSSA Investment Managers, as at 30 June 2021.

Disclaimer: Reference to specific securities (if any) is included for the purpose of illustration only and should not be construed as a recommendation to buy or sell the same. 
All securities mentioned herein may or may not form part of the holdings of FSSA Investment Managers’ portfolios at a certain point in time, and the holdings may change over time.