Core Viewpoint - First Solar is expected to maintain strong revenue from its eco-efficient solar modules despite a challenging policy environment for renewables from the current administration [1] Group 1: Company Performance - First Solar continues to generate significant revenue from the sales of its solar modules [1] - The company is positioned to benefit from the ongoing ramp in data and market dynamics [1] Group 2: Industry Context - The current administration's "drill, baby, drill" policy is creating a hostile backdrop for renewable investments, which may dampen overall investment sentiment in the sector [1] - Despite the negative sentiment, there is a focus on long-term wealth creation in the renewable energy sector, particularly for undervalued and high-growth companies [1]

Investment Rating - The report maintains an "Overweight" (OW) rating for Denso, Aisin, and Nifco, while downgrading Jiangsu Hengli Hydraulic to "Neutral" [6][8]. Core Insights - The report emphasizes a structural increase in defense spending, with upcoming catalysts such as the NATO summit in June likely to agree on higher defense budgets [1]. - Denso's price target is lowered to ¥2,300 due to slowing earnings growth and tariff impacts, while Aisin is still viewed as a core auto parts stock despite revisions [4][8]. - Bharat Electronics is noted for stronger margins, with a revenue of ₹91.5 billion reported, slightly below expectations but with significant EBITDA growth [7][8]. Summary by Relevant Sections Japan Auto - Denso's price target is revised down to ¥2,300 from ¥2,400, reflecting a change in growth potential due to sluggish demand for BEVs and stagnant HEV inverter sales [4][6]. - Aisin's estimates are revised down due to tariff impacts and production cuts, but it is still expected to see significant growth in electric-drive parts sales [8]. - Nifco is expected to maintain stable profit growth despite tariff uncertainties, with a lowered price target of ¥4,600 from ¥4,700 [8]. Bharat Electronics - Bharat Electronics reported revenue of ₹91.5 billion, which was 2% below JP Morgan's estimates but 3% above consensus [7]. - The EBITDA margin improved to 30.8%, significantly above expectations, indicating strong operational performance [7]. Jiangsu Hengli Hydraulic - Jiangsu Hengli Hydraulic's estimates are cut by approximately 9% on average, with a downgrade to "Neutral" due to balancing growth prospects with ramp-up costs and trade policy uncertainties [8]. - The company is currently trading at a P/E of 35x/30x for FY25/26E, reflecting a balanced view amid opportunities and challenges [8]. General Market Sentiment - Investor sentiment remains strong for Bharat Electronics, driven by expectations of benefiting from increased Indian defense spending [8]. - The report highlights the importance of strategic initiatives such as factory automation and production shifts to Mexico for maintaining competitiveness in the US market [8].