Goldman Sachs' The 720: constructive on selected Asian consumer, internet and bank stocks; maintains a constructive view on oil prices and gold

Overview

This is a multi-theme research roundup from Goldman Sachs Global Investment Research, covering Asia company earnings reviews, corporate events, AI disruption and adoption, and oil and gold price moves. The report is not centered on a single company, but on Asia consumer, internet, banking, software services, energy and precious metals assets, with 12-month target prices, earnings estimate revisions and investment rating views. The overall tone is constructive: Goldman Sachs continues to favor companies with execution, scale advantages, shareholder returns or AI adoption capability, while remaining cautious on geopolitical risk, margin pressure, AI substitution risk and macro uncertainty.

Core views

The core views are: first, several companies including Yum China, Miniso, Eastroc, Busy Ming, Bank of China, CR Mixc, CR Land, Meitu and Meituan remain Buy-rated, even though earnings estimates for some names were trimmed modestly because of margin or expense pressure. Second, on oil, Goldman Sachs believes widening geopolitical conflict and Red Sea and Hormuz-related flow risks will keep Brent crude above $110/bbl. Third, on gold, Goldman Sachs maintains a constructive base case of $5,400/toz by end-2026, arguing that the recent pullback mostly reflects liquidation triggered by Middle East conflict and hawkish Fed pricing. Fourth, on Asia AI strategy, Goldman Sachs expects the market to increasingly distinguish between traditional software and services models that are genuinely exposed to AI substitution risk and high-quality AI applications that have proprietary data, system records and defensive moats.

Analysis framework

The report uses a multi-asset, multi-company quick-note format, combining earnings previews, earnings reviews, corporate events, management discussions, commodity supply-demand shocks and thematic strategy views. At the company level, the judgment mainly relies on sales growth, same-store sales, margins, net profit, store openings, shareholder returns, asset quality, subscriber counts and narrowing EBIT losses. At the commodity level, the focus is on geopolitics, oil flows, commercial inventories, central bank gold buying, Fed rate cuts and speculative positioning. At the thematic strategy level, the focus is on the impact of AI on software-services valuations and earnings expectations.

Methodology notes

• Equity factor frameworkGS Factor Profile

  Growth, financial returns, valuation multiples and composite percentile

  Goldman Sachs factor profiling uses forward sales, EBITDA, EPS, ROE, ROCE, CROCI, P/E, P/B and EV/EBITDA, among other metrics, to compute standardized percentiles used to compare a stock's growth, return profile and valuation against the market and sector peers.

• M&A probability frameworkM&A Rank

  Acquisition probability score

  Goldman Sachs uses an M&A ranking from 1 to 3 to assess the likelihood that a company becomes a takeover target, where 1 indicates a higher probability, 2 a medium probability and 3 a lower probability; when the rank is 1 or 2, M&A factors may be incorporated into the target price.

• Research databaseQuantum

  Financial history, forecasts and ratios database

  Quantum is Goldman Sachs' proprietary database for reviewing company financial statement history, forecasts and ratios, and can support deep single-name analysis or cross-industry and cross-market comparisons.

Asset mapping & comparison

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

• YUM CHINA HOLDINGS INC / US.YUMC

  Earnings preview and Buy rating

  Strengths

  Execution remains solid, new growth initiatives support 2026 visibility, and sales and operating profit are still expected to grow YoY.

  Weaknesses

  1Q26 faces a high base, and rising delivery mix and labor costs weigh on restaurant margins.

  Comparison

  KFC same-store sales are expected to grow only 1%, while Pizza Hut is expected to be flat YoY, indicating softer near-term same-store momentum.

  Risks

  Weak consumer demand, rising costs, changes in delivery mix and high-base pressure.

• MINISO GROUP HOLDING LTD / US.MNSO

  Earnings review and Buy rating

  Strengths

  IP products, North America openings and larger-store upgrades support high-quality growth, and management guides for high-teens revenue growth in 2026.

  Weaknesses

  Product-mix changes create margin pressure, and adjusted net profit estimates for 2026-27E were cut by 6%-8%.

  Comparison

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

  Risks

  Store-opening execution, overseas expansion, product mix and margin pressure.

• Meituan / 03690.HK

  Management roadshow feedback and Buy rating

  Strengths

  Food delivery scale leadership and unit economics improvement, with Keeta international expansion and Ella Supermarket instant retail providing additional growth drivers.

  Weaknesses

  Food delivery remains loss-making, and investment in new businesses could weigh on profits.

  Comparison

  Goldman Sachs expects food delivery EBIT losses to narrow from Rmb24bn in FY25 to Rmb12bn in FY26E.

  Risks

  Industry subsidy competition, regulatory changes, international expansion execution and instant retail investment.

• Gold

  Commodity strategy view

  Strengths

  Central bank diversification, normalization of speculative positioning and Fed rate cuts support the medium-term target price of $5,400/toz.

  Weaknesses

  The price has recently retreated about 15% from highs due to liquidation related to Middle East conflict and hawkish Fed pricing.

  Comparison

  The chart shows the price path from the current approximately $4,550/toz to the end-2026 target of $5,400/toz.

  Risks

  If equities keep correcting, near-term downside risk remains elevated.

• Brent crude oil

  Commodity supply-demand and geopolitics view

  Strengths

  Escalating geopolitical conflict and Red Sea and Hormuz flow risks support high oil prices.

  Weaknesses

  Some oil flows are being rerouted through Yanbu and Fujairah ports, and pipelines are operating close to full utilization, which partly offsets the shock.

  Comparison

  Goldman Sachs expects Brent to remain above $110/bbl, above its 2026 annual average assumption of $85/bbl.

  Risks

  Easing conflict, greater efficiency in supply rerouting or weaker demand could reduce support for oil prices.

• Asia AI infrastructure and high-quality AI applications

  Thematic strategy view

  Strengths

  AI applications with proprietary data, system records and defensive moats become more attractive after valuation compression.

  Weaknesses

  Traditional software and services business models may face displacement by AI agents and earnings downgrades.

  Comparison

  The Asia-Pacific software and services sector has de-rated significantly since late January, and the market is beginning to distinguish AI substitution risk.

  Risks

  AI commercialization falling short of expectations, continued earnings forecast cuts and insufficient valuation re-rating.

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 slow to 1%, while Pizza Hut is expected to be flat YoY; restaurant margin is expected to decline by 0.3 percentage points.
• Yum China target priceUS$57.7 / HK$450Goldman Sachs maintains Buy; 2026-28E net profit forecasts were cut by less than 2%.
• Brent crude oil viewAbove $110/bblGeopolitical risks related to the Red Sea and Hormuz support the oil price view; the estimated net shock to global commercial oil inventories is 11.4mb/d.
• Gold target priceEnd-2026 $5,400/tozSupport comes from normalization of speculative positioning, a 50bp Fed rate cut and continued central bank diversification.
• Recruit buybackUp to ¥350bnThe scale is significantly above the prior annual assumption of ¥200bn, reflecting management's confidence in shareholder returns and long-term profitability growth at Indeed.
• Miniso target priceUS$21.3 / HK$42Goldman Sachs maintains Buy, although adjusted net profit estimates for 2026-27E were cut by 6%-8% due to product-mix margin pressure.
• Eastroc Beverage target priceRmb300Goldman Sachs maintains Buy and expects both sales and net profit to grow 24% in 2026.
• Busy Ming store count21,948 storesStore openings accelerated in 2H25, and adjusted net margin reached 4.5% in 4Q25.
• Bank of China target priceRmb6.69 / HK$5.354Q25 results beat expectations; NPAT grew 5% YoY, and retail NPL formation is expected to improve gradually from 2H25.
• Meituan target priceHK$112Goldman Sachs expects food delivery EBIT losses to narrow from Rmb24bn in FY25 to Rmb12bn in FY26E.
• GS Yuasa rating changeUpgraded from Sell to Neutral, target price ¥4,800Reflects domestic lead-acid battery price increases, the divestment of loss-making Turkish operations and improving ESS demand prospects.
• Mainfreight initiationNeutral, target price NZ$63.65A high-quality operator is at the bottom of the cycle, but the Middle East conflict and macro uncertainty limit near-term earnings.

Impact & implications

For portfolios, the report supports tilting toward Asian stocks with visible growth, shareholder returns, scale advantages or AI adoption capability, while remaining selective on traditional software and services assets that face a higher risk of being displaced by AI agents. On commodities, the oil view is driven by geopolitics and could affect energy, transport and inflation expectations; the medium-term upside scenario for gold reinforces its allocation value as a diversification tool for central banks and private-sector investors.

Risks

• Escalation or de-escalation of geopolitical conflict could significantly alter pricing for oil, gold and transport-related assets.
• AI agents may create structural pressure on the existing monetization models of traditional software services and hiring platforms.
• Consumer companies face slower same-store sales, product-mix shifts, labor cost, delivery cost and store expansion execution risks.
• Banks and property-related assets remain affected by net interest margin, asset quality, property risk cleanup and the macro policy path.
• If Fed rate cuts fall short of expectations or risk-asset declines continue, gold may remain under short-term pressure.
• Some target prices and earnings forecasts have already been cut, showing that margin and expense-investment pressure has not fully disappeared.

What to watch

• Yum China 1Q26 actual same-store sales, restaurant margins and full-year growth guidance.
• Miniso's 2026 net new store target of 510-550, progress on larger-store upgrades and the pace of North America expansion.
• Meituan's food delivery subsidy intensity, pace of EBIT loss narrowing, Keeta international rollout and Ella Supermarket scaling.
• Whether the Japanese banks' new medium-term plans can reprice market expectations for ROE and ROTE targets.
• Changes in oil flows in the Red Sea, Hormuz and the Persian Gulf, as well as rerouting capacity through Yanbu and Fujairah.
• Gold speculative positioning, the Fed rate-cut path, central bank gold purchases and the trend of private-sector diversification away from Western assets.
• Whether earnings forecasts for the Asia software and services sector continue to be cut and whether AI application companies can demonstrate proprietary data or system-record moats.