Author: Blue Whale News

Throughout history, every time humans stepped out of familiar lands and ventured into the ocean, it was a song of courage. And the gifts of courage have never disappointed the pioneers.

As early as the 15th century, Venetian merchants had extended their trade networks to every port in the Mediterranean. The arrival of the Age of Exploration inspired countless adventurers, driven by the ambition to conquer and the desire for wealth, to sail into unknown oceans, expanding the trade networks to new continents. A great geographical discovery thus rewritten the world map.

Today, going overseas to seek fortune has become a new growth engine for leading Chinese enterprises. Transitioning from product exports to high-value creation, Chinese companies are continuously exploring new territories, welcoming their own "Age of Exploration."

Against this backdrop, Invesco Great Wall Fund officially released the "New Trends and Investment Opportunities for Chinese Enterprises Going Overseas in 2026" report (hereinafter referred to as the "Report"). The report deeply explains the new trends of Chinese companies going overseas in the new normal of global industrial chain restructuring, offering panoramic insights into overseas investment opportunities from consumer goods to capital goods.

Several fund managers from Invesco Great Wall, including Ke Haidong, Zhou Hanying, Qiao Haiying, Guo Lin, Xu Yida, and Wang Kaizhan, systematically analyzed the investment opportunities hidden in the new trends of going overseas, touching on aspects such as the confidence of Chinese enterprises in going overseas, whether this logic will become a long-term trend for A-share investments, and which specific investment directions are worth noting, helping investors understand the investment logic of the overseas wave.

Publishing in-depth research reports has become one of the forms of deep communication between the investment research team at Invesco Great Wall and the market and investors. From the "New Energy Vehicle Insight Report" in 2022 to the "Technology Insight Series: Semiconductors" in 2023, and then to the forthcoming "Reshaping: Insight AI+" in 2024, the investment research team has consistently captured industrial investment opportunities with a forward-looking vision, sending clear "strong call" signals to the market. This year, this overseas report analyzes industry trends and investment opportunities from a more macro perspective, combining the era's subject of "going overseas" with deep analysis. It not only continues the consistent lineage of Invesco Great Wall's investment research but also stands at a new historical juncture, showcasing insights and grasp of the trends of the times.

When Going Overseas Becomes the New Normal for Enterprises

In the past two years, the Chinese capital market has witnessed a magnificent wave of going overseas. From the global boom in trendy consumer goods to the explosion of innovative pharmaceuticals and the stunning performance of leading optical module companies achieving tenfold growth in a year—these industries are vastly different, yet "going overseas" has become the common keyword.

More importantly, at the level of listed companies, going overseas has transformed from the previous "storytelling" into tangible profits and positive valuation feedback. Overseas operations bring higher gross margins, combined with vast overseas growth potential, jointly elevating ROE levels, and companies with a high proportion of overseas income in A-shares enjoy significant valuation premiums.

All this points to one conclusion: Going overseas is becoming the new normal for Chinese enterprises.

Why has going overseas become so important today? Ke Haidong, fund manager of the equity investment department at Invesco Great Wall, analyzes from a macro perspective: In the context of great power competition, the going overseas strategy is an important tool for China to break the blockade and reshape the global landscape. At the national level, there is strong promotion for building the "Belt and Road" with countries in Africa, Latin America, and Southeast Asia, and enterprises are following policies to invest overseas.

From a micro perspective, going overseas is no longer an "optional" for enterprises, but a "necessary choice." Zhou Hanying, fund manager of the international investment department at Invesco Great Wall, stated: "Going overseas is not a choice for enterprises, but an inevitability for survival and leapfrogging."

She summarized three reasons:

• First is the reality factor, as China's exports have continued to grow even after the US launched its tariff war in 2018 and 2025, indicating that the world cannot do without Chinese manufacturing.
• Second is profit migration; A-share enterprises going overseas achieve gross margins of up to 28%, significantly higher than the domestic 19.2%, meaning going overseas enhances profitability and valuation.
• Third is historical validation; leading stocks in the US and Japan, such as Toyota and Johnson & Johnson, derive 60% of their profits from overseas, driving long-term bull runs in their stock prices. Currently, A-shares have just a 15% overseas income share, indicating massive potential for growth.

Ke Haidong assesses: “The trend of going overseas is not a fleeting phenomenon but will last a long time, encompassing all aspects of A-share investment.” For investors, understanding this new normal of going overseas is to comprehend the core narrative of the Chinese capital market for the next decade.

The Iteration of Going Overseas: From "Products" to "Services"

Chinese enterprises going overseas did not begin today. As early as after joining the WTO in 2001, Chinese companies started to go global in the form of "product exports."

At that time, the overseas model was: enterprises shipped products from Chinese factories to overseas, handing them to importers or distributors, with subsequent brand building, channel management, and after-sales service almost completely detached from the control of Chinese enterprises. In this model, Chinese companies played a purely "manufacturing factory" role, earning processing fees and occupying a mid-to-low position in the global value chain. Despite their large scale, profits were slim, and they lacked control over overseas markets.

After the first round of tariff wars initiated by the US in 2018, Chinese enterprises began accelerating their first wave of going overseas. Companies faced a critical decision: either bear the increased costs from tariffs or build factories overseas to avoid tariffs. After calculations, many companies chose the latter.

Ke Haidong analyzes that to go overseas, one must first establish capacity layouts; from announcements made by listed companies, it is clear that after 2018, the number of companies expanding capacity overseas in the construction industry has continuously increased. This round of going overseas can be viewed as "Going Overseas 1.0": companies started to set up production capacities overseas but were mostly reacting passively to trade frictions.

A qualitative change occurred in 2025. In 2025, the US again escalated its tariff war, while Europe and other countries also began to experience trade frictions. Faced with a more complex international trade environment, Chinese enterprises entered the "Going Overseas 2.0" era.

The core feature of this version is: "Transitioning from export to going overseas; export is merely simple product export, while going overseas entails not just products but also operational capabilities and capacity layouts."

The specifics of Going Overseas 2.0 are reflected in several changes:

• First, rapid growth in capital goods investments, especially focusing on 'Belt and Road' markets, has brought high growth in capital goods through the backup of overseas production capacity.
• Second, consumer products are going overseas by gradually expanding from online brand and momentum accumulation to offline.
• Third, accelerated overseas service industry growth is evident, on one hand, with a 50% increase in foreign visitors exempt from visas by 2025, and on the other hand, the export of innovative pharmaceutical business development and large model tokens is becoming a new trend.
• Fourth, supply chain going overseas is deeply integrated with the AI revolution, embedding Chinese enterprises within the core supply chains of global tech giants.

The Advantages of Chinese Enterprises Going Overseas

Chinese enterprises exhibit strong global competitiveness in the Going Overseas 2.0 era, supported by a complete set of systematic advantages. Invesco Great Wall Fund expresses confidence in the sustainability and growth potential of going overseas. The advantages of Chinese enterprises going overseas are not based on single factors but are a combination of multiple dividends, forming an unreplicable competitive barrier.

First, the engineer dividend is the core driver of the development of China's manufacturing and technology industries. The number of Chinese science and engineering graduates has been consistently increasing since 2000, with over 3 million added each year. These high-quality STEM talents drive the continuous enhancement of research and development capabilities among Chinese enterprises.

Second, a complete and low-cost infrastructure provides a solid foundation for the development of manufacturing. China's industrial electricity prices are far lower than those of developed countries in Europe and the US, with a highly reliable supply. In terms of logistics, China has the world's densest highway network, high-speed rail network, and port clusters, significantly reducing logistics costs for both input of raw materials and output of products. These infrastructural advantages are the result of decades of continuous investment, making it difficult for other countries to catch up in the short term.

Finally, there is a complete industrial chain cluster effect. China's manufacturing value added is globally leading, with exports of capital goods, intermediate goods, and consumer goods holding the strongest position worldwide.

Guo Lin, a fund manager at Invesco Great Wall's research department, used optical modules as an example, stating that in the AI era, "speed trumps all"; once a technical solution emerges, Chinese engineers rapidly advance yield ramp-up and capacity expansion, while overseas competitors clearly lag in response speed. Similarly, leading optical module enterprises have established production bases overseas, achieving a multinational framework of R&D in China and manufacturing abroad, ensuring global delivery while perfectly circumventing certain trade barriers.

Qiao Haiying, fund manager of the equity investment department at Invesco Great Wall, cited innovative pharmaceuticals as an example: Chinese pharmaceutical companies are gradually replacing their overseas counterparts and becoming the first choice for multinational pharma companies in pipeline introductions. On the policy level, China's domestic drug review agencies have a global leading efficiency that lays a solid foundation for R&D; in terms of talent, relying on the engineer dividend, China has the largest and most cost-effective pool of biomedical engineers in the world, with first-class efficiency in preclinical development and iteration speed; concerning the industrial chain, the large disease population and concentrated medical resource provide an entry speed for clinical trial groups reaching 30%-40% of the global standard, with costs only one-third to one-fourth of that abroad. The synergy among these three factors has created an unparalleled low-cost, rapid trial-and-error capability for Chinese pharma companies globally.

Selling Shovels Worldwide—The Going Overseas Opportunities in Capital Goods

In the process of enterprises going overseas, "selling shovels" has become one of the biggest beneficiaries. Capital goods (construction machinery, heavy trucks, etc.) play the role of "selling shovels." So, what opportunities do Chinese enterprises have in the capital goods sector?

Wang Kaizhan from Invesco Great Wall's research department pointed out that over the past two to three decades, especially during the real estate boom, demand for capital goods like construction machinery and heavy trucks has surged. More importantly, China has formed a complete industrial chain cluster from raw materials to components to complete machines. Despite the downturn in the real estate cycle, overseas demand, particularly the wave of AI investments, has taken the baton. Chinese companies are quickly moving toward emerging markets along the "Belt and Road" and developed countries in Europe and the US, achieving solid progress in localized overseas operations.

Xu Yida, fund manager at Invesco Great Wall's equity investment department, added that Chinese manufacturing has accumulated the world's most comprehensive industrial supply chain, low-cost infrastructure and energy, as well as rich engineer dividends. The high-quality supply aligns closely with the current global demand, leading to the prosperity of capital goods going overseas.

Wang Kaizhan observed that in recent years, there has been a large amount of mergers and new projects in global mining companies, bringing Chinese supply chains into previously inaccessible markets. The localization rates of domestic products in categories like large mining trucks and large excavators have rapidly increased, with most of the growth momentum in the domestic construction machinery industry coming from overseas, especially with new mining projects in resource-rich countries acting as core drivers.

Additionally, the rise of China's engineering machinery market share is not solely reliant on technological advantages. Wang Kaizhan believes the true advantage lies in cost—integrated cost benefits from the entire industrial chain—and service capabilities, enabled by the engineer dividend and rapid response capabilities. While foreign brands may take several weeks to solve technical problems, domestic brands require only a few days.

Xu Yida observed that in emerging economies like those along the "Belt and Road," Chinese capital goods, leveraging technical barriers and practical assistance, are rapidly seizing markets. However, in areas traditionally dominated by Western giants, such as South America and Australia, entry still requires time.

Wang Kaizhan believes that enterprises are no longer only focused on manufacturing processing but are instead going overseas with brands and sales systems, leading to natural profit increases; at the same time, the undervaluation of the RMB also provides a systemic dividend. Xu Yida added that leading domestic firms face a more lenient competitive environment overseas, allowing them to obtain higher pricing power while spreading out R&D costs.

Selling shovels worldwide, the journey of Chinese capital goods has just begun. Looking ahead to the next 1-2 years, Wang Kaizhan believes the most promising directions will be LNG main manufacturers, grid distribution equipment, energy storage projects, and transformers, as tight capacity in Europe and the US allows Chinese companies to penetrate fixed market patterns.

Xu Yida prefers power equipment and construction machinery. He believes that learning from Japan's past experiences in going overseas should prioritize sectors where China has significant advantages. Chinese power equipment companies are globally competitive in technology, cost, and delivery speed and are likely to benefit significantly from this round of overseas grid upgrades.

Regarding construction machinery, China's leading enterprises are already among the top globally, with a clear long-term competitive advantage. Currently, the global construction machinery market is in an upward cycle, expected to last a considerable duration. Meanwhile, China's current global market share remains relatively low, presenting vast potential for growth. With the accelerating industrialization process in "Belt and Road" countries and strong demand for resource extraction, the overseas demand for construction machinery is supported by stable requirements.

What Other Overseas Investment Opportunities Exist?

Based on the global competitive landscape and the logic of China's industrial upgrades, Guo Lin pointed out that new energy vehicles, AI applications, and optical modules are becoming the core tracks for "extreme going overseas," containing nonlinear growth opportunities.

Over the past five years, China's new energy vehicles have rapidly developed due to policy dividends, a complete three-electric industry chain, and cost advantages. However, high tariffs from Europe and America are pressuring the industry to transform; the future game-changing capabilities lie in localized overseas factories and supply chain construction. Leading automakers, leveraging hybrid technology, have already surpassed a 40% share of monthly exports, validating the feasibility of localization.

Guo Lin is optimistic about the overseas expansion of AI applications and optical module companies, including large models/tokens, cloud services, robots, and specialized agents. Overseas coding applications have replaced a significant number of programmers and are at a tipping point for explosive growth. With a large population base and rich application development experience, China is expected to replicate the successful domestic model for overseas leaps. Optical module companies have exhibited extreme competitiveness in the current explosion of AI computing power, with leading firms entering the Nvidia supply chain. This competitiveness can be replicated in sectors such as PCBs, consumer electronics, automobiles, and power equipment.

Zhou Hanying is optimistic about two major directions: AI-driven power and grid equipment going overseas, as well as consumer brands going overseas, both reliant on the global investment gaps in power grids and the upgrading dividends of Chinese brands.

The end of AI is electricity; energy storage and power electronics will become the core of AI infrastructure. As global investment in power grids increases, the AI computing power cycle will drive demand for high-voltage switches, HVDC, energy storage, microgrids, etc.—both areas exhibit notable global gaps and entry barriers, resulting in significant chances for going overseas. Meanwhile, the consumer export trend is shifting from cost advantages to brand power. On one hand, the efficiency of Chinese supply chains offers "chain price advantages"; on the other hand, high perceived value through "brand quality-price ratios" in Europe and America is yielding price increases, such as trendy brands priced at $20-30, bypassing low-cost competition.

Qiao Haiying believes that there are tenfold investment opportunities emerging in the innovative pharmaceutical space. For instance, global annual sales of the previous generation "king of drugs" for cancer were about $30 billion, while the newly iterated generation has climbed to an annual sales level of around $100 billion, remarkably expanding market space. In this process, Chinese pharmaceutical companies have emerged with three opportunities in the cancer field with nearly tenfold growth potential.

More importantly, the treatment areas of innovative drugs are expanding from pure disease treatment to consumer healthcare, where large indications nurture major products, and major products foster large companies. In the field of weight loss, for example, conditions are ripe for the birth of multiple tenfold stock companies. This continuous expansion of treatment boundaries brings exceptionally attractive investment opportunities that we are confident in.

However, the path of going overseas presents both opportunities and challenges. Chinese enterprises face multiple impediments such as geopolitical issues, local compliance, cultural gaps, exchange rate fluctuations, singular channels, technological blockades, and trust barriers.

In response, Zhou Hanying proposed a framework of "pre-compliance, localized production, and local spokespersons," while Qiao Haiying emphasized the necessity to build overseas clinical and commercialization capabilities. Xu Yida believes that with time, Chinese leaders will ultimately breach trust barriers. Only those enterprises that can identify risks, maintain sustained investments, and respond effectively will prevail in this new wave of globalization.

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