1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:HSBC Securities(Taiwan)Corporation Limited View HSBC Global Research at:https:/ The 20theditionof the EM Sen

2、timent SurveyClick to viewHesitant bulls of summer Chinese brands are scaling up and moving upmarket Taiwans competitive edge is narrowing as players face margin pressure and slow recovery amid rising competition Risks to profitability and valuation;maintain Hold on Giant(TP TWD112 vs TWD132)and Mer

3、ida(TP TWD112 vs TWD148)Saddle up for disruption.Post-pandemic,the bike narrative was simple;once excess inventory is cleared,the global market would return to“normal”.However,a new reality is emerging,and“normal”may not be coming back,as many Chinese brands are entering the global sports bike marke

4、t,offering high-quality bikes or components at competitive prices.We have seen this disruption before.Shein(private company)is outflanking H&M(HMB SS,not rated,CMP SEK133.15)and Zara(brand of Inditex,IDEXF,not rated,CMP USD51.27),DJI(private company)dominates the drone market,Insta360(688775 CH,not

5、rated,CMP RMB169.00)is edging out GoPro(GPRO US,not rated,CMP USD0.80),and not to mention Chinese EV players squeezing global automakers.Could the global bicycle industry be next?For years,Chinese-made bikes were often dismissed as low-quality replicas.However,that perception is changing.Today,Chine

6、se brands like XDS(private company)are making an impact,as its frames are used by the Astana cycling team.Riding into the big league.While Western brands still hold an edge in branding,innovation,and service networks,these are narrowing as the Chinese brands are learning fast.They are going direct-t