On February 28th, Xingjian Asset Management stated that in the late 1980s and 1990s, China began to introduce a large amount of foreign investment and develop manufacturing industries, gradually becoming the world's factory for various low-cost manufactured goods. Today, 20-30 years later, although the low-end industrial chain has gradually shifted to countries with lower production costs such as Southeast Asia, China is striving to upgrade its industrial chain. However, in many light industrial manufacturing sectors, Chinese manufacturing still dominates, with toys being a typical example. Over 70% of toys globally are produced in China. Xingjian Asset Management pointed out that the world's most famous toy brands mostly come from the United States, followed by Denmark, Japan, etc. It is believed that most of them have factories in China or source toys from China. Those who purchase toys are not concerned about whether the factory making the toys is well-known, but rather focus on the quality, price, product safety, output, reputation, and worker treatment of the manufacturer. If all of these aspects meet the standards, they are willing to purchase from that manufacturer. It is evident that many Chinese companies are doing well in these areas, which is why China has become a major player in the toy industry. The export of toys and similar manufactured goods has undoubtedly created a large number of job opportunities for China and greatly boosted economic growth in the early days of opening up. However, as China's society, economy, and population structure change, Chinese manufacturing needs to continue transforming and upgrading to better adapt to the new environment. In fact, in some relatively complex industrial sectors, China is already one of the world's leaders, even though the general public may not necessarily be aware of it. One such sector is engineering machinery. Xingjian Asset Management tracks a Chinese company that is the world's top manufacturer of excavators and concrete machinery. While most Chinese toy factories act as OEM manufacturers for international brands, this engineering machinery company has become an international brand itself. When this company was founded many years ago, the domestic engineering machinery market was mainly dominated by American and Japanese brands. However, due to the company gradually producing cheaper, quality-assured, and fully functional products compared to its competitors, along with its high-quality customer service, its market share in China has been steadily rising, making it an industry leader. Subsequently, it expanded beyond China and began selling its products in overseas markets. According to their annual report for 2022, the company's products are exported to over 50 countries and regions globally, with the fastest growth in the United States and Europe. Overseas sales account for 27.2% of their total revenue, and the gross profit margin in overseas markets is higher than in China. This indicates that the company is not just dumping products in overseas markets but has competitive products that can capture market share abroad. For investors who are somewhat pessimistic about China's demand but are attracted by market valuations for Hong Kong-listed companies, they may want to pay attention to such successful companies that have gone global. It's not just in the engineering machinery industry, even in the medical equipment sector, there are companies like this. Generally speaking, these companies that have successfully expanded internationally under their own brands are undoubtedly more valuable for investment than toy factories producing for others. People don't know which Chinese manufacturer produced the toys in their hands. Consumers only care about the toy brand, and as long as the quality and price are maintained, they don't mind if another Chinese or Vietnamese manufacturer takes over. However, for those excavators and concrete machinery with a Chinese company's brand printed on them, it takes years of maintaining product quality to slowly gain the trust of industry professionals and expand internationally. But these brands are only recognizable within the industry, and may not necessarily be considered "internationally renowned brands" yet. Xingjian Asset Management believes that over the past few decades, China's economy and the development of Chinese companies have been rapid, but the number of companies that have the potential to become international brands is still limited. Therefore, investors should pay more attention to these companies that possess unique capabilities and are scarce in the market.