20 November 2025 12 stocks for 2026 Equity Strategy Ideas in Asia that look beyond AI In 2025, Asian markets were driven by AI and a Chinese equity rebound. In 2026, we think it will be all about growth beyond AI, dividends and forgotten Asia stories. We present 12 actionable stock ideas that reflect these themes and which are also recommended by our equity analysts. For more details on these 12 stocks, see page 2. We update our index targets for 14 markets across Asia in 2026e in The year ahead in 2026 – I ...

Core Viewpoint - The current earnings season highlights significant supply constraints across various industries, which is leading to better-than-expected earnings for companies like Intel and others in the tech sector [1][2]. Technology Sector - Intel reported earnings that exceeded expectations due to supply constraints, allowing the company to raise prices, which is advantageous in any industry [2]. - Companies such as SanDisk, Western Digital, and Sea are experiencing strong stock performance due to their pricing power amid supply constraints, which have historically hindered their profitability [3]. - Micron is also noted for its supply constraints, which have led to a reevaluation of demand expectations [5][6]. - AMD's stock rose 7.6% following discussions about its supply constraints and partnerships in quantum computing [4]. Aerospace Industry - Boeing is expected to report on supply constraints affecting all its aircraft, particularly the 737 models, due to regulatory challenges and past mishaps [7]. - Major suppliers to Boeing, including General Electric, RTX, and Honeywell, are benefiting from increased demand for aircraft and maintenance services [7]. Energy Sector - Genova is highlighted for its supply constraints in power equipment, particularly large turbines used in data centers, suggesting potential for growth [8]. - The high cost of these machines, which can reach up to $100 million, positions Genova favorably in the market [9]. Precious Metals - The supply of gold remains constrained despite high prices, with foreign supplies becoming increasingly difficult to access due to tougher terms from host countries [10][11]. - The overall trend indicates a persistent imbalance between demand and supply across multiple industries, which is favorable for stock performance [11].

Summary of Techtronic Industries (0669.HK) Earnings Review Company Overview - **Company**: Techtronic Industries (TTI) - **Ticker**: 0669.HK - **Industry**: Power Tools and Equipment - **Market Size**: US$39 billion global power tool market in 2024 Key Financial Results (1H25) - **Revenue**: US$7,833 million, up 7% year-over-year (yoy) [1] - **Operating Profit**: US$2,921 million, up 14% yoy [1] - **Net Profit**: US$550 million, up 14% yoy [1] - **Gross Profit Margin**: 40.3%, an increase of 0.3 percentage points (pp) yoy [1] - **Operating Margin**: 9.0%, an increase of 0.5 pp yoy [1] - **Net Profit Margin**: 8.0%, an increase of 0.5 pp yoy [1] Segment Performance - **Power Equipment Revenue Growth**: +7.9% yoy [1] - **Floor Care & Appliances Revenue Growth**: -4.6% yoy [1] - **Geographical Performance**: - North America: +8% yoy - Europe: +12% yoy - Rest of the World (ROW): +6% yoy [1] - **Brand Performance**: - Milwaukee: +12% yoy - Ryobi: +9% yoy [1] Management Insights - **Long-term EBIT Margin Target**: Management reiterated a target of 10% [2] - **2H Growth Moderation**: Anticipated due to self-imposed shipping reductions for certain Milwaukee SKUs produced in China [2] - **China Capacity**: Expected to support non-US markets still growing at double digits [2] Tariff Mitigation Strategies - **Production Shift**: Over 95% of Ryobi production for the U.S. market has shifted to Vietnam, now subject to a 20% tariff [10] - **Milwaukee Production**: Less than 15% of total sales involve China-to-U.S. exports, with a full relocation targeted by the end of 2025 [10] - **Cost Management**: TTI has implemented selective price increases and other cost-cutting measures to maintain profitability [6] Financial Outlook - **Earnings Outlook Revision**: 2025E-2030E earnings outlook revised up by 5-8% mainly due to margin improvements [3] - **12-Month Price Target**: Updated to HK$110.1 based on a 2026E P/E of 19x [3] - **Dividend Payout Ratio**: Expected to increase to close to 50% [7] Risks and Considerations - **Downside Risks**: - Slowdown in U.S. businesses/residential fixed asset investment (FAI) - Slower product innovation - Changes in international trade/tax policy - U.S.-China tariff impacts [12] Additional Insights - **Cash Flow and Balance Sheet**: Strengthened with a net cash position of 3% to equity at the end of 1H25 [7] - **Market Position**: TTI's strong pricing power and market leadership in cordless tools are expected to drive growth despite tariff challenges [11] This summary encapsulates the key financial metrics, management insights, and strategic outlook for Techtronic Industries, highlighting both opportunities and risks in the current market environment.

Summary of Conference Call Notes Industry Overview - The conference call primarily discusses the **data center industry** and its dynamics, particularly focusing on the demand for AI computing power and related infrastructure developments. Key Points and Arguments Data Center Demand and Pricing - The demand for data centers has expanded beyond major companies (BBAT) to various industries due to the introduction of **DeepSeek**, which has increased training and inference needs across sectors [1][2] - There is a strong belief that data center prices will rise by the end of Q2, driven by supply-demand dynamics and new applications [2][3] - The supply of data centers, especially in regions like North China and East China, is tight, with no available stock for large-scale data centers (over 30 MW) [1] Long-term Contracts and Pricing Strategies - Major companies are signing long-term contracts (up to 10 years) with data center providers to lock in prices at the current low levels, indicating a strategic move to mitigate future price increases [3] - The contracts often include penalties for early termination, ensuring a minimum commitment period [3] AI Computing Power Trends - The demand for domestic AI computing power remains strong, with significant advancements in model development and applications since March [4][5] - Recent updates in AI models, such as **Dipstick v3** and **GDP 4.0**, have led to increased interest and usage in image generation and other applications [6][7] Agent Development and Its Impact - The evolution of AI agents is expected to drive a surge in computing power demand due to their complexity and the need for extensive model calls [9][10] - The agent's ability to handle complex tasks will significantly increase the computational requirements compared to traditional chatbots [9] Supply Chain and Infrastructure Developments - The construction of computing centers in China continues unabated, with over 800 projects reported, indicating robust demand from major companies [11][12] - The capital expenditure (KPEX) in the industry is accelerating, with a notable increase in spending on power and cooling systems, which constitute a significant portion of data center costs [26][27] Market Outlook and Investment Recommendations - Companies involved in power equipment and data center infrastructure are expected to perform well, with specific recommendations for firms like **麦克尼特** and **旺电器** due to their strong earnings potential [15][20] - The overall market for energy storage is projected to grow significantly, with estimates suggesting a demand of 300 GWh by 2024, driven by advancements in green energy solutions [24][25] Technological Innovations and Future Directions - The introduction of **green electricity direct connection** projects is anticipated to enhance the efficiency of data centers and related power systems [22][23] - The potential for long-duration energy storage solutions is being explored, which could reshape the energy supply landscape for data centers [23] Additional Important Insights - The pricing of critical components like **柴发** (diesel generators) and cooling systems is on the rise due to increased demand and supply constraints [26][27] - The market for AI computing power and related infrastructure is expected to see continued growth, with companies adapting to meet the evolving technological landscape [19][20] This summary encapsulates the key insights and developments discussed during the conference call, highlighting the current state and future prospects of the data center industry and AI computing power demand.