Specialist Sales APAC Specialist Sales 10 June 2025 J P M O R G A N KR Defense (Stay Bullish), JPM EU Industrial Conf, JP Auto, Mitsubishi Elec, Key inbounds & feedback Joann Kim +852 2800 8016 joann.kim@jpmorgan.com Hitachi is hosting Investor Day today from 2pm HKT. Its IR material out and initial impression from investors was nothing really stands out, the net debt/ebitda leverage of 1-2x should continue to be favored for a Y1trn buyback but limited to Y300bn and ROIC of 12-15% indicated this time is on ...

J P M O R G A N Japan Megabanks (Mizuho>MUFG>SMFG), China Banks (CRCB downgrade), Japan Consumer Finance, Asia Credit Conference (Survey) Ayano Tsunoda +81 3 6736 7628 ayano.tsunoda@jpmorgan.com 4 key highlights today: Specialist Sales APAC Specialist Sales 10 June 2025 J P M O R G A N | Date | | Bank | Insurance | Diversified | Macro | | --- | --- | --- | --- | --- | --- | | 11-Jun | Wed | | CPIC AGM | | Japan May PPI, South Korea U-Rate US May CPI, US10Y Acution | | | | | | | VivaTech Summit (Nvidia CEO s ...

Specialist Sales APAC Specialist Sales 09 June 2025 Taiwan Insurance (KGI downgrade), India Insurance (HDFC Life), SMFG (Olive seminar), JGB roundtable Ayano Tsunoda +81 3 6736 7628 ayano.tsunoda@jpmorgan.com Today: Australia June Consumer Confidence (8:30), Indonesia May Foreign Reserves (11:00), Japan May Machine Tool Orders (14:00) Call highlight: JGB supply/demand roundtable @ TOMORROW (6/11) 15:30 HKT/8:30 GMT (30 min) w/ rates sales & JGB & Insurance analysts 3 key highlights today: | Date | | Bank | ...

Specialist Sales APAC Specialist Sales 10 June 2025 J P M O R G A N JPM APAC Technology - Coforge/QCOM/AAPL/BESI/CLS Duncan Wagner +852 2800 8874 duncan.wagner@jpmorgan.com Ankur Rudra hosted a CEO fireside chat - mgmt. was bullish, no signs of macro concerns. Large deals won in FY25, robust growth in FY26. Samik Chatterjee highlights Qualcomm acquisition of Alphawave strengthens their Data Center portfolio (CPUs, inferencing NPUs) and adds another competitor to the custom AI ASIC market. Key Asia competito ...

TATA Motor, Koito (7276), Toyota Industries AGM, Key inbounds Specialist Sales APAC Specialist Sales 10 June 2025 J P M O R G A N Joann Kim +852 2800 8016 joann.kim@jpmorgan.com We note a recent correction in global defense names (RHM -2.5%, Hanwha Aerospace -2.7%) despite the absence of negative headlines. While investors see no fundamental issues in the defense sector, they expect defense names to take a breather after a strong year-to-date rally. It is worth noting the outperformance of building material ...

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies covered. Core Insights - The impact of China's rare-earth export ban is significant, affecting key Asian automakers like Suzuki and Ford, with production halts reported [1][5] - The sentiment around BYD has improved, with investors noting a bottoming out in sentiment, while concerns remain for Geely and Great Wall Motor [1][12] - The Indian defense sector is poised for growth, with expectations to increase defense spending to 2.5% of GDP by FY30, indicating a potential doubling of defense spending [1][11] - The EU building materials sector is showing signs of improvement, driven by positive factors such as increased defense spending and a potential recovery in residential construction [1][13] Detailed Highlights - **Japan Auto**: Suzuki halted production of its Swift model due to the rare-earth export ban but resumed operations shortly after, indicating that the situation may not be as severe as initially thought [1][5] - **China Auto Feedback**: Pricing competition has moderated, and BYD's sales volume has responded positively without significant price cuts, improving investor sentiment [1][10][12] - **Indian Defense**: The Ministry of Defense's commentary suggests that conditions are aligning for a significant increase in defense spending, attracting investor interest in various defense companies [1][11] - **EU Building Materials**: The sector is experiencing a strong move, with cement shares leading the way, supported by positive results from companies and a firming sentiment for construction recovery [1][13] Sector Key Newsflow - US auto suppliers are urging immediate action to address China's rare earth restrictions [1][13] - Suzuki's production of the Swift is set to return to normal from June 16 [1][13] - Chinese officials have summoned EV executives to discuss self-regulation in the ongoing price war [1][13] - BYD plans to nearly triple its dealer network in South Africa, reflecting its growth strategy [1][13] - China's NEV retail sales increased by 30% year-on-year in May, indicating strong market demand [1][13]

Investment Rating - The report maintains an Underweight (UW) rating on Lynas Rare Earths and a Neutral (N) rating on MP Materials [2][9]. Core Insights - The rare earths industry is facing significant supply chain disruptions due to China's export restrictions on key heavies like Terbium and Dysprosium, which are critical for electric vehicles and advanced technologies [9]. - Despite potential trade negotiations between the US and China, the damage to the supply chain may be lasting, prompting a shift towards developing non-Chinese sources of rare earths [9]. - The oil sector is expected to see strong refining margins, with a projected surplus of 2.6 million barrels per day (mbd) in Q4 2025, leading to a price floor for Brent crude between $55-60 and WTI between $50-55 [3][15]. Rare Earths Sector Summary - China controls approximately 70% of rare earth production, 85% of processing capacity, and 99% of heavies production, which has led to a scramble for alternative sources among automakers [9]. - Lynas Rare Earths and MP Materials are identified as key beneficiaries of the push for ex-China supply, with Lynas having over 85% exposure to NdPr, which is not currently restricted [9]. - The report expresses caution regarding the sustainability of the current rally in rare earth prices and the timing of commercial production volumes from alternative sources [9]. Oil Sector Summary - The report highlights five conditions necessary for crude prices to decline, with only two expected to materialize: a surge in OECD inventories and a flattening crude curve [15]. - Refining margins are anticipated to remain strong due to limited new capacity coming online, influenced by China's export restrictions and closures of US/EU plants [3][15]. - The report suggests that product stocks are expected to build, but low starting levels should support prices and margins [15].

Investment Ratings - Broadcom: Overweight (O/W) with a price target (PT) of $250 [4] - TSMC: Overweight (O/W) with a price target (PT) of $1275 [6] - Hon Hai: Overweight (O/W) with a price target (PT) of $210 [7] - Wistron: Neutral (N) with a price target (PT) of $118 [9] - Ciena: Overweight (O/W) with a price target (PT) of $86 [10] - Lumentum: Overweight (O/W) with a price target (PT) of $87 [11] - TIS: Neutral (N) with a price target (PT) of Y4,700 [12] - SCSK: Neutral (N) with a price target (PT) of Y4,400 [13] Core Insights - Broadcom is expected to see significant AI XPU growth, with AI revenues projected to rise from $12.2 billion in 2024 to $31.2 billion by 2026, surpassing street consensus [5] - TSMC maintains strong gross margins (GMs) and anticipates a revenue compound annual growth rate (CAGR) of approximately 20% through 2029, supported by price increases and a faster ramp of N2 technology [6][8] - Hon Hai's sales in May were impacted by TWD appreciation, but AI demand remains strong, with expectations of reaching 2,000 rack shipments in Q2 [7][9] - Wistron is focusing on GDR issuance to support AI system growth, with expectations of sustained revenue driven by robust demand for Dell's GB200 systems [9][15] - Ciena's revenue and order strength indicate robust growth in the optical market, driven by cloud and service provider investments [10] - Lumentum is updating its revenue expectations due to strong demand in optics, forecasting a quarterly revenue target of $500 million ahead of schedule [11] Detailed Highlights - Broadcom's AI revenue growth is expected to significantly exceed consensus estimates, with a bullish outlook for the AI sector overall [5] - TSMC's pricing strategy includes anticipated price hikes for leading-edge nodes, with a focus on maintaining high gross margins [6][8] - Hon Hai's revenue growth is expected to continue, driven by AI server demand, despite short-term currency impacts [7][9] - Wistron's capital raise is aimed at supporting AI system growth, with expectations of increased shipments in the coming months [9][15] - Ciena's strong sales trends are attributed to increased cloud investments, indicating a positive outlook for the optical market [10] - Lumentum's demand strength is leading to an upward revision in revenue forecasts, reflecting robust drivers in the optics sector [11]

Investment Rating - The report maintains an "Overweight" rating for Anta Sports [1] Core Insights - Anta Sports has continued the stable trend observed in the first quarter of this year, supported by healthy inventory levels and optimistic sales and performance [1] - The target price for Anta Sports has been raised from HKD 140 to HKD 142 [1] - The retail sales guidance for Anta Sports remains unchanged, with expected growth rates of high single digits for Anta, mid single digits for Fila, and over 30% for other brands [1] - The operating profit margin guidance is maintained, with expected margins of 20% to 25% for Anta, approximately 25% for Fila, and 25% to 30% for other brands [1] - Due to increased investment in MaiaActive and the planned acquisition of JackWolfskin to be completed in June, the earnings forecast for Anta Sports for 2025 to 2027 has been raised by 1% to 2% [1]

Investment Rating - The report assigns a "Neutral" rating to Hong Kong Exchanges and Clearing Limited (00388) with a target price of HKD 340 for the next 12 months [1] Core Insights - The report highlights that improvements in the new stock listing channels for Hong Kong Exchanges are a significant long-term benefit for the Greater China stock market, as the Stock Connect programs have fundamentally changed the investment landscape for both Hong Kong and mainland Chinese investors since their launch in 2014 [1] - It mentions that there are 26 Chinese concept stocks, which are constituents of the MSCI China and FTSE China indices, that have not yet been listed in Hong Kong, with a total market capitalization of USD 237 billion and an average daily trading volume of USD 2 billion over the past three months, representing approximately 5% and 6% of Hong Kong Exchanges' current market capitalization and daily trading volume, respectively [1] - According to sensitivity analysis, if all these stocks were to list in Hong Kong, it is anticipated that the earnings per share for Hong Kong Exchanges would increase by 6% by 2026 [1]