Core Insights - The report from JPMorgan highlights that the escalation of conflicts in the Middle East and Iran's closure of the Strait of Hormuz are fundamentally reshaping the Asian transportation and industrial ecosystem due to geopolitical shocks, tightening regulations, and shifts in trade flows [1] Group 1: Industry Opportunities - Companies with scale advantages, flexibility, and strategic positioning in container shipping, tankers, bulk shipping, ports, supply chains, defense, and aviation are poised to capitalize on upward opportunities [1] - Container shipping and regional operators are benefiting from their network coverage and pricing power, while tankers and bulk shipping are gaining from supply tightening and disciplined capital allocation strategies [1] - Leading ports and supply chain companies are profiting from route diversions and warehousing revenues, while the defense industry is entering a structural upcycle due to the global shift in strategic focus [1] Group 2: Air and Sea Transport Effects - The spillover effects in air and sea transport are expanding, as shippers turn to air freight to avoid bottlenecks in sea transport [1] - Airlines such as Cathay Pacific and Singapore Airlines are well-positioned to capture new demand due to their prudent fuel hedging strategies, mature route network management, and unique access to Russian airspace by Hong Kong/Mainland carriers, with both rated as "overweight" [1] Group 3: Preferred Companies - In the container shipping sector, JPMorgan favors COSCO Shipping, Orient Overseas International, and Evergreen Marine due to their global scale and network flexibility [1]

Group 1 - The short-term uncertainty in energy supply has increased due to the closure of the Strait of Hormuz, which carries about 20% of global oil supply, leading to a rise in Brent crude oil prices from $72.9 per barrel on February 27 to $77.7 per barrel on March 2 [1][6] - The cost and risk premium in global shipping have risen as tensions escalate in the Red Sea, with the Suez Canal being a critical trade route that handles over 15% of global goods trade and more than 30% of container traffic [2][7] - The global aviation and tourism industries are experiencing short-term structural impacts, with many flights canceled and airspace closed in the Middle East, affecting travel plans and leading to adjustments in airline and travel agency operations [3][8] Group 2 - Inflation risks in the US and Europe have increased, with uncertainty surrounding monetary policy paths as geopolitical risks from the Middle East lead to rising oil prices and increased supply chain costs [4][9] - Global risk aversion has risen, with precious metals gaining attention as safe-haven assets amid inflation concerns, while the safe-haven function of US Treasuries and the Japanese yen has diminished [5][11] - The focus on "global security deficits" has increased, with geopolitical risks prompting discussions on economic autonomy, trade diversification, and national defense security [6][13] Group 3 - Certain export sectors in China are facing short-term impacts, emphasizing the importance of expanding domestic demand and building a strong domestic market, particularly in machinery and automotive exports to the Middle East [7][14] - The economic resilience of major economies will face objective testing, with the South Korean market showing significant adjustments due to its trade dependency and the impact of a rebounding US dollar on emerging market liquidity [8][15] - External uncertainties are increasing, highlighting the resilience of domestic demand in China as a key factor, with some Chinese assets benefiting from structural pricing advantages amid global narrative shifts [9][16]

Investment Rating - The report assigns an "Overweight" rating for the aviation industry [6]. Core Insights - The demand for air travel during the 2026 Spring Festival is robust, with post-holiday ticket prices continuing to rise, indicating a promising Q1 profitability for airlines. The escalation of geopolitical tensions in the Middle East has led to oil price risks, but this does not alter the long-term value and cyclical logic of airlines, suggesting a strategic opportunity for reverse positioning [3][6]. Summary by Relevant Sections Industry Overview - The Spring Festival demand is strong, with a year-on-year increase in overall passenger flow of 5.8% as of March 1, 2026. Specifically, air travel saw a 6.9% increase, while rail and road transport grew by 8.1% and 5.6%, respectively. The limited increase in flight schedules and strict control over capacity by authorities have contributed to a rise in passenger load factors [6][9]. Passenger Flow Trends - Pre-holiday air travel increased by 5.1%, with mid-holiday growth reaching 7.6% due to extended holiday periods boosting family visits and travel. Post-holiday, the growth rate further increased to 9.8%, driven by concentrated return travel and a gradual recovery in business travel [6][9]. Ticket Pricing Dynamics - Ticket prices have shown a positive trend post-holiday, with domestic ticket prices estimated to rise by 4-5% year-on-year. The high load factors during the holiday period have supported a significant price increase of nearly 8% during the mid-holiday period. The report anticipates that ticket prices will continue to rise in March, supported by a low base effect and high load factors [6][9]. Profitability Outlook - The report estimates that the average load factor for January and February 2026 increased by approximately 1-2 percentage points year-on-year, with domestic ticket prices (including fuel) rising by about 6%. Despite a 9% year-on-year decrease in average fuel prices, the net profit for major airlines is expected to improve significantly in Q1 2026, potentially leading to industry-wide profitability [6][9]. Geopolitical Oil Price Risks - The report highlights that the escalation of geopolitical tensions has led to an increase in oil prices, with the average crude oil price rising from $60 to $70 per barrel. The impact of oil prices on airline profitability is significant, as fuel costs account for nearly 40% of airline expenses. However, the report suggests that the strong demand and high load factors in the Chinese aviation market may mitigate the adverse effects of rising oil prices [6][9]. Long-term Industry Outlook - The report emphasizes that the long-term growth logic of the aviation industry remains intact, with expectations of a "super cycle" driven by sustained demand growth and a shift towards market-oriented pricing. The report recommends strategic investments in major airlines such as Air China, Spring Airlines, China Eastern Airlines, China Southern Airlines, and Juneyao Airlines [6][9].

周二，随着美伊紧张局势持续升级，亚太市场普遍低开，而日韩股市领跌。 截至发稿， 韩国基准股指Kospi指数跌幅扩大至3.6%，盘中一 度跌超4% 。韩国金融衍生品市场波动更为剧烈 ， 韩国综合股价指数（KOSPI）200期货跌幅达5%后触发熔断机制，程序化交易暂停5分 钟。 韩国金融市场昨日因假期休市。 大韩航空股价大跌逾8%，据报道，由于美国对伊朗发动袭击，大韩航空已暂停仁川至迪拜航线，停飞将持续至3月5日。 韩国国防类股票普遍大幅上涨。韩国最大航空航天与防务企业韩华宇航股价一度大涨逾22%。韩国军工电子企业LIG NEX1的股价一度触及 每日30%的涨幅限制。 日本股市则延续了前一日的跌势。截至发稿， 日经225指数和东证指数双双跌超2% 。 根据Kpler的数据，去年通过该海峡的原油日均运输量超过1400万桶，占全球海运原油出口总量的近三分之一。 摩根大通经济学家认为，伊朗冲突对全球经济的影响主要取决于敌对行动持续时间，油价上涨被视为最可能造成重大连锁反应的经济传导渠 道。 日股制药股、汽车股重挫，截至发稿，住友制药跌超16%，丰田汽车跌近6%。 该行报告指出，若冲突短暂，油价可能迅速回归此前运行轨迹， ...

Group 1 - Haizhi Technology Group (02706) saw a mid-day increase of over 4.1% following the announcement of a strategic cooperation framework agreement with Zhipu, focusing on model training and application scenarios [1] - NetEase-S (09999) rose nearly 3% after receiving a notification from the Hong Kong Stock Exchange indicating that over 55% of its global transaction volume for the fiscal year 2025 will be completed on the Hong Kong Stock Exchange [1] - Oil stocks continued their upward trend, with China Petroleum (00857) up 3.73%, CNOOC Services (02883) up 3.43%, and CNOOC (00883) up 2.32%, amid reports of the Strait of Hormuz being closed by Iran [1] Group 2 - CNOOC Chemical (03983) increased nearly 5% after signing a management agreement with CNOOC Refining and Fudao Chemical for daily operations from March 1, 2026, to February 28, 2029 [2] - Tianlun Gas (01600) surged nearly 8% after Qatar Energy announced a suspension of LNG production due to drone attacks from Iran, causing European natural gas futures to rise over 50% [2] - Guotai Junan International (01788) rose over 4% after receiving approval from the SFC to use the ISDA Standard Initial Margin Model for OTC derivatives trading starting February 12, 2026 [3] Group 3 - Xpeng Motors (09868) fell over 4.5% after announcing the launch of its second-generation VLA, with February deliveries dropping to 15,256 units, a 49.9% year-on-year decline [4] - China Duty Free Group (01880) dropped nearly 5%, with a cumulative decline of over 30% post-holiday, attributed to losing some operating rights at Shanghai Airport [4] - Lithium mining stocks fell, with Ganfeng Lithium (01772) down 6.93% and Tianqi Lithium (09696) down 3.75%, as lithium carbonate futures hit a limit down of 13% [5] Group 4 - U.S. stocks in the storage sector fell, with Seagate Technology (STX.US) down 6.94% and Western Digital (WDC.US) down 3.44% [6] - Cryptocurrency stocks surged, with Circle (CRCL.US) up 15.22% and Coinbase (COIN.US) up 5.34% [6] - Corning (GLW.US) rose 4.97% after launching a new generation of Gorilla Glass with enhanced drop resistance [6] Group 5 - Nokia (NOK.US) increased by 6.99% after announcing an expanded partnership with TIM Brasil and Deutsche Telekom to utilize NVIDIA's AI-RAN platform [7] - Oil and gas stocks generally rose, with Occidental Petroleum (OXY.US) up 2.13% as oil prices surged due to escalating Middle East conflicts [7] - Airline stocks fell, with United Airlines (UAL.US) down 2.91% as rising oil prices impact profitability [7] Group 6 - Optical communication stocks rose significantly, with Applied Optoelectronics (AAOI.US) up 21.7% following a strategic agreement between NVIDIA and Lumentum [8] - The defense sector saw gains, with Raytheon Technologies (RTX.US) up 4.71% as geopolitical tensions increase demand for defense technologies [8]

1 March 2026 | 4:04PM EST Economics Research Global Markets Comment: Market Thoughts Following the Strikes in Iran Dominic Wilson +1(212)902-5924 | dominic.wilson@gs.com Goldman Sachs & Co. LLC Kamakshya Trivedi +44(20)7051-4005 | kamakshya.trivedi@gs.com Goldman Sachs International George Cole +44(20)7552-1214 | george.cole@gs.com Goldman Sachs International Michael Cahill +44(20)7552-8314 | michael.e.cahill@gs.com Goldman Sachs International William Marshall +1(212)357-0413 | william.c.marshall@gs.com Gol ...

Market Overview - US stock market showed mixed results with the Dow Jones down by 73.14 points (0.15%) at 48,904.78, while the Nasdaq rose by 80.65 points (0.36%) to 22,748.86, and the S&P 500 increased by 2.74 points (0.04%) to 6,881.62 [3] Oil and Gold Prices - Oil prices surged over 6% due to concerns about potential supply disruptions from escalating US-Iran tensions. Brent crude futures rose by $4.87 (6.68%) to $77.74 per barrel, while WTI futures increased by $4.21 (6.28%) to $71.23 per barrel [5] - Gold prices also saw an increase, with spot gold rising by 0.97% to $5,330.12 per ounce and COMEX gold futures up by 1.81% to $5,342.80 per ounce [6] Energy Sector Performance - Energy stocks generally performed well, with ExxonMobil up over 1%, Chevron rising more than 1%, and ConocoPhillips increasing by over 4%. However, Schlumberger saw a slight decline of 0.15% [5][6] Shipping and Airline Industry - Maersk announced the suspension of certain bookings in the Middle East to ensure safety and stability in trade services, affecting shipments to several countries including the UAE and Saudi Arabia [7] - Airline stocks mostly declined, with American Airlines dropping over 4% and Delta Airlines falling by more than 2% [7] Technology Sector Developments - Nvidia announced a $4 billion investment in two photonics technology companies to strengthen its R&D pipeline and support large-scale AI infrastructure [8][10] - Major tech stocks showed mixed performance, with Nvidia rising nearly 3% and Microsoft increasing over 1%, while Google and Amazon experienced declines of over 1% and 0.77%, respectively [8][9]

Core Insights - The report highlights a focus on various sectors, including real estate, transportation, and renewable energy, with specific stock recommendations for March 2026 [1][4][5][10][13]. Stock Recommendations - The report lists a selection of stocks for March 2026, including Poly Real Estate Group (0119.HK), CITIC Hainan Airlines (000099.SZ), and Mindray Medical (300760.SZ) among others [1]. Market Performance - The Shanghai Composite Index closed at 4182.59, up by 0.47%, while the Shenzhen Component Index decreased by 0.20% to 14465.79 [1]. - The performance of various industry indices shows significant gains in sectors like oil and petrochemicals (up 7.95%) and coal (up 3.77%), while sectors like media and computer saw declines [1]. Renewable Energy Sector Insights - The report anticipates a robust growth in global electric vehicle sales in 2026, which will drive demand for batteries and materials [4][9]. - The report notes a significant price increase in lithium carbonate due to Zimbabwe's ban on lithium ore exports, emphasizing the importance of monitoring the supply chain [4][9]. - The solar energy sector is expected to see increased investment driven by trends like "anti-involution" and "space solar power," with a focus on domestic manufacturers [4][9]. Transportation Sector Insights - The report discusses the impact of geopolitical tensions, particularly the U.S. military actions against Iran, on global oil transportation, predicting increased shipping costs due to supply chain disruptions [5][13][14]. - The introduction of Tesla's Cybercab is noted as a significant advancement in autonomous vehicle technology, marking a shift towards dedicated Robotaxi services [5][13][14]. Investment Recommendations - The report suggests focusing on opportunities in the shipping sector due to geopolitical tensions, recommending stocks like China Merchants Energy (601872.SH) and COSCO Shipping (601919.SH) [16]. - It also highlights potential investments in the low-altitude economy and autonomous driving sectors, recommending companies like CITIC Hainan Airlines and others in the logistics space [16][17].

Market Response - The military strikes by the United States and Israel against Iran have led to a global negative market response, with stocks declining and a "risk-off" sentiment prevailing [1] - Major indexes in Asia and Europe fell by nearly 1% or more by Monday, following the initial news of the strikes [1][8] Oil Prices - Oil prices have surged, with Brent crude rising more than 7% to nearly $80 per barrel, and analysts suggest it could reach $100 if the conflict continues [5] - Iran's military capabilities pose a risk to oil facilities in the Middle East, and the closure of the Strait of Hormuz, through which almost a third of the world's seaborne oil flows, adds to the uncertainty [3][4] Economic Impact - The conflict is expected to push average gasoline prices in the U.S. above $3 per gallon, impacting consumer spending and energy-intensive industries [7] - Higher oil prices could lead to increased costs for sectors such as airlines, trucking, chemical and steel manufacturing, and farming, potentially acting as a drag on economic growth [9]

Fixed Income/Banking - The total bond custody scale increased by 0.76 trillion yuan to 179.3 trillion yuan in January 2026, with a net increase of 0.46 trillion yuan compared to December 2025 [8] - Long-term bonds experienced a pullback at the end of February, primarily due to profit-taking by brokers and funds following the relaxation of real estate policies in Shanghai, presenting a potential opportunity for investors [8][11] - The report anticipates that the 10-year government bond yield may reach a low of 1.75% in Q1 and 1.70% in Q2, with an expected range of 1.6%-1.9% for the year [11] Transportation - The Middle East conflict may significantly increase oil shipping rates, with the potential for a substantial rise in oil transport prices due to geopolitical tensions [12][13] - The express delivery sector in Zhejiang province reported a record high of 56.3 million packages processed in a single day during the Spring Festival, reflecting a 10% year-on-year increase in package volume [16][17] - The civil aviation sector transported 22.05 million passengers during the 2026 Spring Festival, marking a 7.7% increase compared to the previous year [20] Pharmaceutical - The pharmaceutical index rose by 0.50% in late February, with a focus on cyclical sectors like chemicals and non-ferrous metals, while innovative drugs continued to adjust [28] - Eli Lilly's oral weight-loss drug, Orforglipron, is expected to lead the global commercialization of small molecule GLP-1RA drugs in 2026, showing significant advantages in efficacy and convenience over competitors [30] - The report suggests focusing on companies with strong Q1 performance and undervalued innovative drug stocks, as well as those with potential for price increases [28][32] Media - Perfect World’s new game "Yihuan" is set to launch in April 2026, featuring innovative gameplay that differentiates it from mainstream competitors [5] - The release of Nano Banana2 has improved image generation speed and efficiency, with a significant reduction in output costs [5] Real Estate - New housing policies in Shanghai aim to stimulate demand, including increased loan limits for first-time homebuyers and subsidies for multi-child families [6] - In January 2026, new home transactions in 42 key cities totaled 760,000 square meters, a 282.1% increase from the previous month [6] Public Utilities and Environmental Protection - The report emphasizes the importance of "dual carbon" assessments and highlights key hydrogen energy projects as part of the energy sector's transition [6] - The hydrogen industry is expected to move from demonstration to industrial-scale promotion in 2026, supported by favorable policies and capital [6]