UBS: The escalation of the China-U.S. trade conflict accelerates industry consolidation, with Techtronic, MAN WAH HLDGS, and SHENZHOU INTL as top picks

UBS published a research report indicating that many large Chinese enterprises established overseas production capacity during the trade war 1.0 era but failed to increase their share of imports into the United States. Now, as the China-U.S. trade conflict escalates, it triggers a reshaping of the global supply chain once again. UBS believes the current situation may be different, with the potential for accelerated industry consolidation, as cost advantages depend on tariffs and whether companies have mature overseas supply chain layouts. It is expected that companies with first-mover advantages can consolidate their positions in existing markets, while small and medium-sized exporters may accelerate their exit from the U.S. market.

UBS identified nine preferred stocks among five major industries: furniture, textiles, industrial machinery and equipment, home appliances, and technology hardware, which are expected to benefit from the escalation of this trade conflict. These include Techtronic Industries (00669.HK), Giant Star Technology (002444.SZ), MAN WAH HLDGS (01999.HK), Craft Home (301061.SZ), Kuka Home (603816.SH), Haier Smart Home (06690.HK)(600690.SH), Stone Technology (688169.SH), Shenzhou International (02313.HK), and Luxshare Precision (002475.SZ), all rated as "Buy," with target prices for Techtronic, MAN WAH, and Shenzhou set at HKD 120, HKD 5.5, and HKD 75, respectively