Goldman Sachs The 720: Consumer and internet names remain broadly positive; gold stays constructive, and oil is supported by geopolitical conflict

Overview

This is a Goldman Sachs The 720 multi-topic research roundup, covering Asia-Pacific company research, earnings reviews, strategy views and commodity views. Core assets include Yum China, Recruit, Bank of Japan, Miniso, Eastroc Beverage, Babi Food, Bank of China, CR Mixc Lifestyle, CR Land, Meitu, Meituan, GS Yuasa and Mainfreight, while also discussing oil, gold, and AI disruption and adoption in Asia's software and services sector.

Core views

Overall, the report believes most Chinese consumer and internet companies still have fundamental support. Although some companies face pressure from margins, product mix or spending, Goldman tends to view short-term volatility as a disturbance that does not change the medium-term growth logic. Japan's banks' new medium-term plans may lift ROE expectations and provide re-rating support. On the AI theme, Goldman expects the market to further distinguish between traditional software business models genuinely exposed to AI substitution risk and high-quality AI applications with proprietary data, system-of-record advantages or defensive moats. On commodities, oil prices are supported by geopolitical risks in the Red Sea and the Strait of Hormuz, while gold, after a recent pullback, is still seen as having medium-term upside.

Analysis framework

The report uses a multi-company quick-comment format, combining earnings previews, earnings reviews, management guidance, target price changes, valuation levels, supply-demand conditions, geopolitics and thematic strategy. For the equity section, it focuses on comparing revenue growth, margin changes, spending, store expansion, asset quality, shareholder returns and valuation multiples; for the commodity section, it tracks supply shocks, inventory impacts, policy rates and central-bank gold buying.

Methodology notes

• Equity factor analysisGS Factor Profile

  Growth, financial returns, valuation multiples and composite factor

  Goldman Sachs' factor framework calculates percentiles using forward sales, EBITDA, EPS, ROE, ROCE, CROCI, P/E, P/B and EV/EBITDA, and is used to compare individual stocks' relative growth profile, return profile and valuation position versus the market and peers.

• M&A probability assessmentM&A Rank

  Acquisition target probability tiers

  Goldman uses M&A rank from 1 to 3 to assess the probability of a company becoming an acquisition target, with 1 representing high probability, 2 medium probability and 3 low probability; when the rank is 1 or 2, M&A factors may be incorporated into the target price.

• Rating and target priceTotal Return Potential

  Total return potential

  Stock ratings and target prices are based on total return potential relative to the covered universe, including upside or downside to the target price versus the current share price as well as expected dividends.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• YUM CHINA HOLDINGS INC / US.YUMC

  Core company research name

  Strengths

  Stable execution and new growth initiatives support visibility into 2026 growth, with target price of US$57.7/HK$450.

  Weaknesses

  In 1Q26, a high margin base, rising delivery mix and labor costs pressured restaurant margins.

  Comparison

  Compared with short-term share price volatility, the report focuses more on full-year growth visibility and operating execution.

  Risks

  Slower same-store sales growth, persistent cost pressure and a weaker-than-expected margin recovery.

• MINISO GROUP HOLDING LTD / US.MNSO

  Consumer retail Buy-rated name

  Strengths

  IP products, store upgrades, North America openings and global expansion potential are growth drivers.

  Weaknesses

  Margin pressure from product mix changes led 2026-27E adjusted net profit forecasts to be cut 6%-8%.

  Comparison

  The current roughly 10x 2026E P/E is seen as not fully reflecting its global expansion potential.

  Risks

  Execution of overseas expansion, product mix changes and slower-than-expected valuation rerating.

• Eastroc Beverage / 605499.SS

  Consumer beverage Buy-rated name

  Strengths

  Evolving from an energy drink company to a multi-category beverage company, with strong new product momentum and expected 24% growth in both 2026 sales and net profit.

  Weaknesses

  4Q25 energy drink sales slowed quarter on quarter; a higher share of lower-margin new products and investment in coolers may weigh on margins.

  Comparison

  The report thinks the recent roughly 10% share price decline is overdone.

  Risks

  Slower-than-expected new product ramp-up, higher channel spending and lower-than-expected raw material or logistics savings.

• Busy Ming

  Chain consumer Buy-rated name

  Strengths

  FY25 adjusted net profit rose 194% YoY; stores expanded rapidly while 4Q25 adjusted net margin improved to 4.5%.

  Weaknesses

  Rapid expansion may pressure same-store GMV and operating efficiency.

  Comparison

  The report highlights its value positioning and healthy unit-store model as support for scale compounding.

  Risks

  Too-rapid store expansion, declining same-store or single-store GMV, and weaker-than-expected cost control.

• Bank of China

  Bank Buy-rated name

  Strengths

  4Q25 NPAT grew 5% YoY and beat expectations; retail bad debt formation has improved gradually since 2H25.

  Weaknesses

  Net interest margin is still in a down cycle, and property-related risks still need to be absorbed.

  Comparison

  The report believes the decline in net interest margin in 2026 should narrow significantly, and net interest income could return to positive growth.

  Risks

  Asset yield declines, funding cost improvement falling short, and renewed property-related stress.

• Meituan / 03690.HK

  Internet local services Buy-rated name

  Strengths

  Leading delivery market share, improving unit economics, and international Keeta plus instant retail Ella Supermarket provide new growth drivers.

  Weaknesses

  Delivery is still loss-making, and industry subsidies and regulatory changes affect the pace of profitability.

  Comparison

  The report expects FY26E delivery EBIT losses to narrow sharply versus FY25.

  Risks

  Renewed competitive subsidy pressure, regulatory changes and higher-than-expected investment in overseas expansion.

• Gold

  Commodity allocation view

  Strengths

  Central-bank diversification, a potential 50 bp Fed cut and low speculative positioning support medium-term upside.

  Weaknesses

  Recently pulled back about 15% due to liquidation linked to Middle East conflict and hawkish Fed repricing.

  Comparison

  The report maintains a constructive base case of $5,400/toz by end-2026.

  Risks

  If equity markets continue to correct, near-term downside risk to gold prices remains elevated.

• Brent crude oil

  Commodity risk view

  Strengths

  Geopolitical risks related to the Red Sea, Bab el-Mandeb Strait and the Strait of Hormuz support oil prices at elevated levels.

  Weaknesses

  Some oil flows are being rerouted through Yanbu and Fujairah ports, and pipelines running near full capacity can cushion part of the shock.

  Comparison

  The current estimated inventory net shock is 1.4 mb/d higher than the assumption used when entering the 2026 Brent annual average forecast of $85/bbl.

  Risks

  Easing conflict could compress the risk premium; if the conflict escalates, supply disruption risk could rise further.

Key data

• Yum China 1Q26 expectationsSales, restaurant profit and operating profit are expected to grow +8.7%, +6.4% and +9.1% YoY, respectivelyKFC same-store sales are expected to grow 1% YoY; Pizza Hut is expected to be flat; restaurant margin is expected to decline 0.3 percentage point YoY.
• Yum China target priceUS$57.7 / HK$4502026-28E net profit forecasts were cut by less than 2%; rating Buy.
• Brent oil viewAbove $110/bblGeopolitical conflict has broadened and affected the Bab el-Mandeb Strait; the estimated net shock to global commercial oil inventories is 11.4 mb/d.
• Gold forecast$5,400/toz by end-2026Although gold prices recently fell about 15% to around $4,580 on liquidation tied to Middle East conflict and hawkish Fed repricing, Goldman remains constructive.
• Recruit buybackUp to ¥350bnWell above the prior assumption of ¥200bn per year; rating Buy, 12-month target price ¥9,100.
• Miniso target priceUS$21.3 / HK$422026-27E adjusted net profit forecasts were cut 6%-8% because of margin pressure from product mix, but the Buy rating was maintained.
• Eastroc Beverage target priceRmb300Goldman expects sales and net profit to both grow 24% in 2026, maintaining Buy and keeping it on the Conviction List.
• Babi Food FY25 adjusted net profitUp 194% YoYStore count reached 21,948, and 4Q25 adjusted net margin reached 4.5%.
• Bank of China target priceRmb6.69 / HK$5.354Q25 results beat expectations, with NPAT up 5% YoY; rating Buy.
• Meituan target priceHK$112FY26E delivery EBIT loss is expected to narrow from Rmb24bn in FY25 to Rmb12bn.
• GS Yuasa rating changeUpgraded from Sell to Neutral, target price ¥4,800Reflects price increases for lead-acid batteries, the divestment of the loss-making Turkey business, and an improved outlook for ESS demand.
• Mainfreight initiationNeutral, target price NZ$63.65A high-quality operator is at the cycle low, but Middle East conflict and macro uncertainty limit near-term earnings.

Impact & implications

For investors, the main takeaway is that Asia-Pacific consumer, internet and some financial names can still secure re-rating opportunities through execution, store expansion, unit economics improvement, shareholder returns or higher ROE; the AI theme is not simply bearish for software and services, but will instead increase differentiation between companies; and on commodities, geopolitical conflict may continue to support oil prices, while gold still has medium-term portfolio value amid central-bank diversification and potential rate cuts.

Risks

• Consumer company margins may continue to be affected by delivery, labor, product mix, store investment and promotional spending.
• The substitution risk from AI agents to traditional software and services business models may continue to pressure valuations, and industry differentiation may intensify.
• Geopolitical risks may create divergent short-term shocks for oil and gold at the same time, with price volatility likely to rise materially.
• Bank stock re-rating depends on higher ROE, the interest-rate path and asset-quality improvement; if policy rates or credit risks move unfavorably, re-rating could stall.
• Internet and local services companies still face uncertainty over competition, subsidies, regulation and the pace of new-business investment.
• The report is a multi-theme quick comment piece; some companies only provide summary information and lack full model details and current share prices, so upside cannot be verified item by item.

What to watch

• Whether Yum China's 1Q26 same-store sales, restaurant margins and full-year growth guidance validate Goldman Sachs' growth visibility view.
• Miniso's IP product mix, North America opening pace and per-store output after large-store renovations.
• Eastroc Beverage's new product sell-through, PET price-lock benefits, logistics savings and cooler rollout spending.
• Meituan's subsidy intensity, regulatory changes, the path to narrowing FY26E delivery EBIT losses, and the expansion of Keeta and instant retail.
• Whether the new medium-term plan for Japanese banks' ROE, ROTE and shareholder return targets is repriced by the market.
• The actual impact of AI agents on the revenue models and earnings forecasts of Asian software and services companies.
• The impact of changes in oil flows through the Red Sea, Bab el-Mandeb Strait, Hormuz and the Persian Gulf on global commercial oil inventories.
• Support for gold prices from the Fed's rate-cut path, the pace of central-bank gold buying and private-sector diversification demand away from non-Western assets.