> ## Content Index > Fetch the complete content index at: https://www.asiancenturystocks.com/llms.txt > Use this file to discover other available public pages before exploring further. # Toll roads in the sky - URL: https://www.asiancenturystocks.com/toll-roads-in-the-sky/ - Published: 2026-09-30T03:28:14.000Z - Updated: 2026-09-30T06:14:19.000Z - Description: Elevator service companies in Asia - Author: Michael Fritzell - Tags: Thematic reports In modern-day Asia, you can't escape elevators. As a VIC poster once said, they're like "toll roads in the sky". You cannot escape them. That makes them mission-critical infrastructure. And a profit source for the companies that service them. In this post, I'll discuss the companies benefiting from Asia's elevator boom. ***Disclaimer** *: I am not licensed or regulated by the Monetary Authority of Singapore, and I am not a financial adviser. This post is my personal opinion, provided for informational purposes only. It is not a recommendation or an offer to buy, sell or hold any security, and it takes no account of your objectives, financial situation or needs. Investing carries substantial risk, including total loss of capital — do your own research and consult a MAS-licensed adviser before investing. As of 30 September 2026, I do not own any shares in any of the securities mentioned or linked to in this post. This reflects my positions on that date only and will not be updated. I will not buy or sell shares in any security mentioned in this post within seven days of publication. I receive no compensation from any company, broker, platform, fund, publication or product issuer mentioned; my revenue comes solely from reader subscriptions. I have not verified the positions or compensation of any third party named here — assume they may hold positions in the securities discussed. Published by Delante Media Pte Ltd.* ![](https://storage.ghost.io/c/2c/05/2c053c06-80c0-447b-904b-e324017b1293/content/images/2026/09/GettyImages-2153464885.jpg) Source: Getty Images There are currently more than 20 million elevators worldwide. Each one needs service, creating a massive opportunity for elevator service companies. Elisha Otis introduced the passenger elevator in 1857\. Before Otis, a broken rope could cause an elevator to fall to the floor, killing everyone inside. His invention was a safety mechanism that halted a falling elevator car if the cable broke. ![](https://storage.ghost.io/c/2c/05/2c053c06-80c0-447b-904b-e324017b1293/content/images/2026/09/image-183.png) Elisha Otis "Otis" became synonymous with passenger elevators, and it continues to be a market leader, even today: ![](https://storage.ghost.io/c/2c/05/2c053c06-80c0-447b-904b-e324017b1293/content/images/2026/09/sEvK3-elevator-industry-2025-revenues-by-company-us-billion-.png) Source: Annual reports Every year, there are 1 million additional elevators installed, providing slow but steady growth: ![](https://storage.ghost.io/c/2c/05/2c053c06-80c0-447b-904b-e324017b1293/content/images/2026/09/image-170-1.png) Source: Roland Berger Much of this is thanks to urbanization, high-rise living, and an ageing installed base of existing elevators. ![](https://storage.ghost.io/c/2c/05/2c053c06-80c0-447b-904b-e324017b1293/content/images/2026/09/GettyImages-2283371500-Large-1.jpeg) Source: Getty Images However, note that maintenance and modernization revenues are growing faster. Even Otis gets almost 90% of its operating profit from such after-sale services – not new installations. The typical lifecycle of a single elevator tends to go through the following process: ![](https://storage.ghost.io/c/2c/05/2c053c06-80c0-447b-904b-e324017b1293/content/images/2026/09/image-173.png) Elevators are typically installed by one of the Big Four OEMs: US-based Otis, Switzerland's Schindler, Finland's KONE, or ThyssenKrupp Elevator (soon to be acquired by KONE). Clients then typically enter into long-term contracts of, say, 5 years, where the OEM provides recurring maintenance, routine inspections, emergency dispatch, repairs, etc. Elevators tend to be sold at razor-thin margins, with most profits coming later through these maintenance contracts. The Big Four have extensive safety track records, and property managers often err on the side of caution. Nobody ever got fired for hiring IBM. And if I had to guess, nobody probably got fired for hiring the Big Four, either. ![](https://storage.ghost.io/c/2c/05/2c053c06-80c0-447b-904b-e324017b1293/content/images/2026/09/image-179.png) But they also have other advantages: - **Service density**: If there's an emergency, OEMs with high service density can dispatch personnel at a moment's notice. Local technicians will be less idle than if the network weren't as dense. - **Remote oversight**: The bigger brands have excellent remote monitoring capabilities, such as the Otis ONE platform. They're selling the ability to detect issues before they happen by analyzing the equipment 24/7\. - **Parts supply**: Maintaining particular elevators requires thousands of parts, some of which are proprietary. - **Licenses**: In certain regions, registered or licensed individuals must perform annual inspections. An elevator can run for 60 years but requires modernization after 20\. This opens the door for smaller service providers to gain market share. An elevator has three main parts: the elevator car, the drive machine that pulls it up and down, and the control cabinet where the electronics sit. ![](https://storage.ghost.io/c/2c/05/2c053c06-80c0-447b-904b-e324017b1293/content/images/2026/09/image-177.png) The elevator companies differ a great deal in what they offer in their modernization packages. The Big Four offer full modernization where the elevator can be completely replaced with new systems. Smaller companies like Japan Elevator Service tend to offer more cost-competitive options, such as replacing only the control cabinet with minimal downtime. Even smaller companies might offer maintenance only, but no modernization at all. ![](https://storage.ghost.io/c/2c/05/2c053c06-80c0-447b-904b-e324017b1293/content/images/2026/09/image-182.png) What surprised me a bit in my research process was the differences in the dominance of the OEMs by geography: ![](https://storage.ghost.io/c/2c/05/2c053c06-80c0-447b-904b-e324017b1293/content/images/2026/09/image-178.png) Independent service provider market share by country China stands out with a 70% non-OEM market share. The Big Four have lost most of their maintenance contracts to independents. Why? Most likely because China has historically required maintenance once every 15 days, making the industry highly labor-intensive and therefore less profitable. Also, the availability of spare parts is excellent, taking away the advantage of the OEMs. So while the elevator market is a slow-growth industry, there might be opportunities to take market share for individual companies: - In China, big OEMs like KONE should be able to take back market share from independents over time. - In the rest of Asia, independents might be able to take market share from the OEMs, provided that they're able to match the service offering, in terms of modernization packages, service density and remote monitoring systems. Here's what the investable universe of stocks looks like: ![](https://storage.ghost.io/c/2c/05/2c053c06-80c0-447b-904b-e324017b1293/content/images/2026/09/image-186.png) Source: TIKR I've mentioned before that [**Hyundai Elevator**](https://finance.yahoo.com/quote/017800.KS/?ref=asiancenturystocks.com) is seeing insider buying. I suspect that it's related to the new value-up plan, which targets 50% capital returns on top of the sell-down of non-core assets. The stock trades at 13.7x P/E. The problem is that South Korea's construction market has been in a clear downturn. [**Japan Elevator Service**](https://finance.yahoo.com/quote/6544.T/?ref=asiancenturystocks.com) has been the darling of the industry, slowly taking market share thanks to its low-price modernization packages and excellent remote monitoring support. The stock trades at 35.0x P/E. Hong Kong's [**Analogue Holdings**](https://finance.yahoo.com/quote/1977.HK/?ref=asiancenturystocks.com) trades at a low P/E of just 5.4x with a high dividend yield. However, the company is hardly growing anymore. The wild card among these stocks, in my view, is freight elevator OEM [**Hong-Wei Electrical**](https://finance.yahoo.com/quote/4565.TWO/?ref=asiancenturystocks.com) in Taiwan. Its earnings per share has been rising, and the stock trades at 14.7x P/E. However, it trades on the OTC market (Taipei Exchange) and is not accessible through Interactive Brokers. It's also vulnerable to a slowdown in capex by Taiwanese companies both domestically and in Mainland China. ![](https://substackcdn.com/image/fetch/$s_!G3nA!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F6f96653e-67cf-48ea-8fa2-6721ec448e28_1100x51.png)