Asia Pacific equity research top stories Report Interpretation

Overview

This is a JPMorgan Asia Pacific Equity Research digest of recent company, sector, strategy and economic notes. Its most developed views favor AI-related semiconductor and power-infrastructure opportunities, while identifying weaker demand and competitive pressure in selected consumer and EV-battery names.

Core views

MediaTek is retained at Overweight with a NT$5,300 target. JPMorgan raises FY27 and FY28 EPS estimates by 8% and 7%, respectively, reflecting stronger ASIC momentum and operating leverage. The report expects greater clarity on the TPUv9 Humufish ramp, possible confirmation of a second SpaceX customer, and growing supply-chain evidence that MediaTek could be the primary participant in TPUv10. Google Cloud revenue growth of more than 80% in 2Q26, led by TPUs, and potential new Gemini-model launches in 2H26 are cited as sentiment supports. JPMorgan’s supply-chain checks indicate that TPUv10’s Icefish model could retain MediaTek’s high-speed Serdes and Die-to-Die interconnect IP despite market concern over a full customer-owned-tooling model. Commercialization of 448G Serdes IP remains on track for 2H27. Smartphone revenue remains challenging, but the report says price increases and a better product mix are helping MediaTek manage gross margins. GUC is upgraded to Overweight with a Jun-27 NT$5,500 target, valued at 34x 12-month forward P/E. JPMorgan raises FY26-28 EPS estimates by 20%, 24% and 14%, mainly because it expects Google CPU revenue to rise fourfold between 2026 and 2028. The report describes GUC as a pure-play beneficiary of the AI CPU ramp because more than 60% of revenue exposure is to Google Axion CPUs, with a meaningful revenue ramp expected in 2027 and 2028. Google’s increased use of customer-owned tooling for AI ASICs could also create design-service opportunities in TPUv10 and other ASIC projects. The report identifies 3nm allocation at TSMC for Google CPUs in 2027, further Microsoft Cobalt CPU volume growth, and clarity on GUC’s role in Google TPUv10 as catalysts. It models only a modest Tesla AI5 ramp because of uncertainty over automotive adoption, Optimus robotics timing and foundry share allocation. In contrast, Ecopro BM is downgraded to Underweight after its 2Q operating profit missed JPMorgan and Bloomberg expectations. Weaker US and European EV cathode revenue, together with a sharp decline in ESS-bound revenue as Samsung SDI appears to dual-source cathodes with Posco Future M, point to a contracting addressable market and more intense competition. The report sees potential volume and profit dilution as Posco Future M takes ESS share and seeks entry into cylindrical cathodes. It also flags downside risk to Ecopro BM’s Hungary expansion from the cost competitiveness of Korea-made cathodes and possible regulatory relaxation. JPMorgan reduces its valuation multiple to 25x down-cycle EV/EBITDA from 40x and cuts its Dec-27 target price to W62,000 from W120,000. For China equities, JPMorgan views the July Politburo readout as incrementally positive because it emphasizes near-term fiscal execution and greater counter-cyclical support. Although the report does not characterize this as large-scale stimulus, it expects the policy intention to cushion macro downside to support earnings growth. It cites consensus 2026/27 EPS growth of 13%/15% for MXCN and 24%/16% for the CSI 300. The central policy theme is the "six networks" initiative—AI, grid, telecom, water supply, urban underground pipelines and logistics—which represents Rmb7 trillion-plus of investment this year and is framed by the NDRC as part of the 2026-2030 modern-infrastructure system. The report also draws constructive data-center read-throughs for industrial names. For Techtronic Industries, positive results from Quanta Services, Stanley Black & Decker and Makita support the view that professional tools demand and AI-data-center workflows are durable and margin-accretive. Quanta reported record backlog, accelerating data-center activity, and technology and load-center revenue growth of 220-240% year on year, alongside a stated US$565 billion data-center total addressable market through 2030. For Weichai, updates from Generac and KION, plus earlier read-throughs from Bloom Energy, Innio and GE Vernova, support a constructive view of its global AI-data-center and industrial-power platform. The cited companies reported robust 2Q orders, higher capacity or delivery guidance, persistent supply constraints and multi-year order visibility, with no evidence of a material oversupply or demand cliff despite investor concerns over behind-the-meter capacity and AI/data-center capital spending. Across the broader rating and target-price changes, the digest records downgrades of Eastroc Beverage A and H to Underweight, Ecopro BM to Underweight, and Mankind Pharma to Neutral. It records target-price increases for, among others, GUC to NT$5,500 from NT$4,400, MediaTek’s forecast revisions, Ping An H to HK$95 from HK$90, Silicon Motion to US$350 from US$260, and Standard Chartered Hong Kong to HK$310 from HK$295. Major target reductions include Eastroc Beverage A to Rmb120 from Rmb177, Eastroc Beverage H to HK$118 from HK$205.50, and Ecopro BM to W62,000 from W120,000.

Analysis framework

JPMorgan compiles company-specific earnings, guidance, supply-chain checks, peer read-throughs, policy developments and estimate revisions. It translates these inputs into changes to earnings forecasts, ratings, target prices and, where stated, valuation multiples.

Methodology notes

• Valuation methodsP/E and PEG Valuation

  Forward P/E valuation

  JPMorgan values GUC at 34x 12-month forward P/E when setting its Jun-27 NT$5,500 target.

• Valuation methodsEV/EBITDA valuation

  Down-cycle EV/EBITDA valuation

  For Ecopro BM, the report lowers the applied multiple from 40x to 25x to reflect tighter risk appetite and a weaker cyclical outlook.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Supply-chain and peer read-through analysis

  The report uses customer, partner and peer results to assess downstream data-center, AI infrastructure, EV-cathode and tools demand for covered companies.

Asset mapping & comparison

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

• MediaTek Inc. (2454.TW)

  Covered semiconductor company benefiting from ASIC momentum and potential TPU program participation

  Strengths

  Rising ASIC estimates, operating leverage, TPU-related IP exposure and gross-margin management

  Weaknesses

  Near-term smartphone revenue remains challenging

  Comparison

  Potentially the primary player in the TPUv10 generation

  Risks

  Uncertainty over TPUv10 business-model structure and customer-program timing

• GUC (3443.TW)

  Covered ASIC design-service company upgraded to Overweight

  Strengths

  More than 60% revenue exposure to Google Axion CPUs and potential Google ASIC opportunities

  Weaknesses

  Only a modest Tesla AI5 revenue ramp is modeled

  Comparison

  Described as a leading pure-play on the AI CPU ramp

  Risks

  Uncertain automotive bundle rate, Optimus timing and foundry share allocation

• Ecopro BM (247540.KQ)

  Covered EV-cathode producer downgraded to Underweight

  Weaknesses

  Weaker US and European EV cathode demand, declining ESS revenue and intensified competition

  Comparison

  Posco Future M appears to be taking ESS share and targeting cylindrical cathodes

  Risks

  Hungary expansion downside and potential regulatory relaxation

• Techtronic Industries (0669.HK)

  Covered tools company with positive data-center and professional-tools demand read-throughs

  Strengths

  Milwaukee brand is increasingly specified in professional-grade tools and workflow systems

  Comparison

  Differentiated from peers that are not directly pursuing the AI-data-center opportunity

• Weichai Power A/H

  Covered industrial-power company supported by US data-center and European industrial read-throughs

  Strengths

  Exposure to global AI-data-center and industrial-power demand

  Comparison

  Supported by results and guidance from Generac, KION and other sector leaders

  Risks

  Investor concerns include behind-the-meter overcapacity and possible AI/data-center capital-spending reductions

Key data

• MediaTek FY27 EPS revision+8%Raised on stronger ASIC momentum
• MediaTek FY28 EPS revision+7%Raised on stronger ASIC momentum and operating leverage
• MediaTek target priceNT$5,300Overweight maintained
• GUC FY26/27/28 EPS revisions+20% / +24% / +14%Primarily reflects stronger Google CPU momentum
• GUC target priceNT$5,500Jun-27 target, up from NT$4,400
• Google CPU revenue growth assumption for GUC4x from 2026 to 2028Key basis for the GUC upgrade
• China six-networks investmentRmb7 trillion-plusInvestment program cited for this year
• Ecopro BM target priceW62,000Dec-27 target cut from W120,000
• Quanta technology and load-center revenue growth220-240% year on yearCited as a positive data-center demand read-through

Impact & implications

The report links AI compute, ASIC design services, data-center power demand and policy-led infrastructure investment to potential earnings support for selected Asian technology and industrial companies. It contrasts these with companies facing weaker EV demand, intensifying competition, slower consumer growth or margin pressure.

Risks

• MediaTek faces continued near-term weakness in smartphone revenue and uncertainty over TPUv10 program structure.
• GUC faces uncertainty around Tesla AI5 automotive adoption, Optimus ramp timing and foundry share allocation.
• Ecopro BM faces subdued US EV volumes, limited European visibility, ESS share loss and potential Hungary-expansion downside.
• Data-center-linked industrial names remain exposed to concerns over behind-the-meter overcapacity and possible AI/data-center capital-spending cuts.

What to watch

• MediaTek’s TPUv9 ramp, a possible second customer in SpaceX, TPUv10 role clarity and 448G Serdes commercialization in 2H27.
• GUC’s 3nm allocation for Google CPUs in 2027, Microsoft Cobalt CPU volumes and engagement in Google TPUv10.
• China’s fiscal execution and implementation of the six-networks infrastructure program.
• Order books, capacity guidance, pricing power and margin resilience across data-center power and infrastructure suppliers.
• EV and ESS cathode demand trends and competitive developments involving Posco Future M.