Inovance’s Upside in EV Moderated by Automation Margin Pressure

Shenzhen Inovance Technology derives just over half its revenue from moatworthy businesses: elevators, new energy vehicles, or NEVs, and railways. In elevators, Inovance offers comprehensive solutions to elevator companies and supplies maintenance parts over the lives of elevators in use. Elevator-related customers are sticky, as they value their safety records, and programs behind elevator systems are tightly integrated with hardware. Through acquiring BST, a major supplier of electronic components for elevators, Inovance now offers better car, cable, cord and human machine interface products, fortifying its lead over local peers. We believe Inovance will gain share with its larger product portfolio and through developing new products to tackle the high-speed elevator market. We are confident in Inovance’s outlook as BST becomes a way to strengthen its relationships with global elevator brands and expand its overseas wing.