Summary of the 2026 Asia Economics Outlook Conference Call Industry Overview - The report focuses on the economic outlook for Asia, particularly the recovery from technology to non-technology sectors, highlighting the expansion of recovery across various industries [3][4][13]. Key Points and Arguments 1. **Recovery Expansion**: The recovery is broadening, with non-technology exports rebounding, leading to improved capital expenditure momentum and better labor market conditions, which in turn boosts consumption [3][4]. 2. **GDP Growth Projections**: - Asia's real GDP growth is expected to rise from 4.3% in Q4 2025 to 4.7% in Q4 2026 [3][35]. - Nominal GDP growth for Asia (excluding China) is projected to rebound from 5.5% in Q4 2025 to 7.2% in Q4 2026 [3][35]. 3. **Inflation Trends**: - Inflation pressures are expected to ease in 2026, with overall inflation in Asia (excluding Japan) projected to rise slightly but remain within central banks' comfort zones [3][4][49]. - In China, inflation is anticipated to improve moderately, with a complete exit from deflation expected by 2027 [3][4][51]. 4. **Monetary Policy Outlook**: Central banks are nearing the end of the rate-cutting cycle, with most expected to maintain rates steady in 2026, except for Australia, which may need further easing [4][35]. 5. **Risks to Growth**: - Upside risks include stronger private sector spending in the U.S. and faster-than-expected adoption of AI, which could enhance productivity [4]. - Downside risks involve a potential mild recession in the U.S. that could negatively impact non-technology exports in Asia [4]. Additional Important Insights 1. **Technology vs. Non-Technology Exports**: - While technology exports have been strong, they account for only about 25% of total exports, limiting their spillover effects on the broader economy [3][13]. - Non-technology exports, which make up 75% of total exports, are expected to benefit from easing trade tensions and monetary easing effects [3][4][13]. 2. **Capital Expenditure**: - The improvement in non-technology exports is anticipated to positively influence capital expenditure, with growth expected to rise to 3.7% in H1 2026 and further accelerate to 4.4% in H2 2026 [27][29]. 3. **Consumer Spending**: - A dual recovery in exports and capital spending is expected to enhance labor market conditions, leading to a rebound in previously weak disposable income consumption [31][33]. 4. **Country-Specific Insights**: - **China**: Expected to see real GDP growth improve but nominal GDP growth remains subdued due to ongoing real estate weakness [45]. - **India**: Projected to have the strongest nominal GDP growth in Asia, driven by tax cuts and improved consumer sentiment [45]. - **Japan**: Expected to maintain strong nominal GDP growth supported by expansionary fiscal policies [46]. - **Korea**: Anticipated recovery in consumption driven by improved real income and fiscal support [46]. - **ASEAN**: Economic performance is expected to be mixed, with Malaysia and Singapore benefiting from non-tech export recovery, while Indonesia and Thailand face challenges [47]. Conclusion The 2026 Asia Economics Outlook presents a cautiously optimistic view of the region's economic recovery, driven by a shift from technology to non-technology sectors, with significant implications for GDP growth, inflation, and consumer spending across various Asian economies [3][4][35].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company reported a 67% year-on-year increase in net profit attributable to shareholders for Q3 2025, driven by the expansion of NAS new products and significant growth in overseas markets [7] - The company's total revenue for Q1-Q3 2025 reached 6.36 billion yuan, a 48% increase year-on-year, with Q3 revenue alone at 2.51 billion yuan, reflecting a 60% year-on-year growth [7] - The gross margin and net margin for Q3 2025 were 37.2% and 7.7%, respectively, showing improvements due to high growth in overseas business [7] Financial Performance Summary - Revenue projections for the company are as follows: - 2023A: 4.803 billion yuan - 2024A: 6.170 billion yuan - 2025E: 9.183 billion yuan - 2026E: 12.494 billion yuan - 2027E: 16.379 billion yuan - Net profit projections are: - 2023A: 387.52 million yuan - 2024A: 462.28 million yuan - 2025E: 688.32 million yuan - 2026E: 957.84 million yuan - 2027E: 1,273.62 million yuan [1][8] - The report indicates an upward revision of net profit expectations for 2025-2027, now projected at 6.9 billion, 9.6 billion, and 12.7 billion yuan, respectively [7] Market and Product Insights - The company has become the leading online market player in the NAS segment in China, with a 125% year-on-year revenue growth in storage products for H1 2025 [7] - The introduction of new products, including upgraded charging devices and AI headphones, has contributed to revenue acceleration [7] - The company has successfully expanded its distribution channels, entering major retail markets in the US and Europe [7]