Inovance's Shares Become Attractive as Automation and EV Prospects Improve Despite Sell-Down.

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 firms 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 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 market share with its larger product portfolio through Chinese operations of global elevator firms. We are confident in Inovance’s outlook with BST as a means to strengthen its relationships with global elevator brands.