Nomura Asia morning report focuses on NIFA takeaways, AI cloud, consumer electronics, EV, and macro divergence

Overview

"Morning News & Views - Asia" is Nomura's summary of selected global markets research for Asia published on June 9, 2026. It includes NIFA 2026 conference takeaways, quick company notes, Asia sector strategy, macro fund flows, and rating disclosures. Rather than a deep dive on a single company, the report presents the latest views across multiple companies and sectors in one place.

Core views

The core view is that opportunities in Asian markets are structurally differentiated: demand for AI cloud and infrastructure remains strong, with the share and growth rate of AI businesses at Alibaba and Baidu becoming key highlights for the internet sector; Bilibili is benefiting from user maturation and advertising growth, though the short-term drag from gaming still bears watching; Sunway and Largan are favored in consumer electronics and the satellite supply chain; Indian EV wiring, paint, pharmaceuticals, and steel show differing levels of momentum; Korean cathode material companies are moving toward European capacity and high-nickel product strategies; at the macro level, rising US rates and changes in Japanese market fund flows are key risk constraints.

Analysis framework

The report mainly relies on management meeting takeaways, industry research, breakdowns of financial and operating indicators, price/volume trends, fund-flow data, and a target price/rating framework. The company sections are more focused on fundamentals and management guidance, while the macro sections focus on rate expectations, cross-border securities transactions, and shifts in risk appetite.

Methodology notes

• 会议纪要NIFA管理层交流

  Extracting operating and strategic signals from management meetings during the Nomura Investment Forum Asia.

  Alibaba, Baidu, Bilibili, Motherson Sumi Wiring, and Korean cathode material companies all came from NIFA 2026 discussions, with emphasis on AI monetization, margins, demand, capacity, and product roadmaps.

• 基本面分析增长驱动与利润率拆解

  Using revenue growth, pricing, volume, product mix, costs, and capacity utilization as the main variables for judging earnings trends.

  For example, WIIM net profit CAGR, Alibaba cloud margins, Baidu AI cloud revenue, Indian paint volumes, and MSUMI wiring content per vehicle were all used to assess medium-term growth.

• 估值与评级Nomura目标价和评级体系

  Buy indicates expected outperformance versus the benchmark over the next 12 months, Neutral indicates broad in-line performance, and the target price reflects the analyst's estimate of intrinsic fair value.

  The report discloses that multiple stocks are maintained at Buy and some target prices are raised, while also noting that target prices may be affected by deviations in macro conditions, market moves, and company earnings.

• 宏观策略资金流、利率预期与政策风险分析

  Assessing market risk appetite through cross-border securities transactions, employment data, rate-hike probabilities, and trade policy timelines.

  Japanese investors' May securities transactions, the nearly 65% probability of a US October rate hike, and the suspension deadline in the China-US shipbuilding dispute were all used to evaluate macro risk.

Asset mapping & comparison

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

• Alibaba Group Holding (BABA US)

  Main commercialization theme of AI cloud and B2B AI agents

  Strengths

  LLMs, cloud infrastructure, and T-Head chips form a full-stack AI capability, while AI products account for 30% of external cloud revenue and are growing rapidly.

  Weaknesses

  Industry supply constraints still exist, and keeping frontier Qwen models closed-source may limit some ecosystem spillover.

  Comparison

  Compared with the traditional e-commerce narrative, the report places greater emphasis on the impact of cloud and AI businesses on valuation and margins.

  Risks

  If cloud demand, MaaS monetization, price increases, and T-Head cost reductions fall short of expectations, margin expansion could be delayed.

• Baidu (BIDU US)

  AI transformation and AI Cloud Infra revenue growth

  Strengths

  1Q26 AI-driven business revenue exceeded CNY13.6bn, accounting for 52% of BGB revenue, while AI Cloud Infra revenue rose 79% YoY.

  Weaknesses

  The influence of traditional search advertising on the growth profile is diminishing, but the quality of growth after the transformation still needs continuous validation.

  Comparison

  The report believes Baidu's growth is no longer primarily driven by traditional search advertising, with AI business becoming the core variable.

  Risks

  Fluctuations in AI cloud infrastructure demand, commercialization pricing, and capex efficiency would affect earnings leverage.

• Bilibili (BILI US)

  Maturing users, ad growth, and gaming recovery

  Strengths

  Users are entering stronger consumption age groups, 1Q advertising revenue rose 30% YoY, and AI integration improves ad conversion while bringing operating savings.

  Weaknesses

  1Q gaming revenue fell 12% YoY, so the gaming business still weighs on overall growth in the short term.

  Comparison

  Compared with the AI cloud themes of Alibaba and Baidu, Bilibili relies more on ad conversion, user spending power, and the IP gaming cycle.

  Risks

  There are execution risks around 4Q26E gaming recovery, launch performance of key IPs, and the 15-20% non-GAAP operating margin target.

• Wismilak Inti Makmur (WIIM IJ)

  Indonesian tobacco consumption and price/volume growth

  Strengths

  2025-28F net profit CAGR is projected at 26%, SKT output remains below its ceiling, and the filter business has shown strong historical growth.

  Weaknesses

  Annual SKM output has already reached the 3bn-stick cap for its category, so future pricing strategy depends more on ASP improvement.

  Comparison

  The company's Wismilak Slim flavor profile is more oriented toward younger consumers, which the report sees as differentiated versus peers.

  Risks

  Tobacco regulation, price acceptance, shifts in young consumer behavior, and production limits may affect growth.

• Shenzhen Sunway Communication (300136 CH)

  Higher content value in satellite communications and AI devices/consumer electronics

  Strengths

  It may receive qualification requests for new components from US customers, and intensive satellite launches in China improve demand visibility.

  Weaknesses

  Growth depends on customer qualification, ground-segment construction, and the rollout of second-generation satellite tenders.

  Comparison

  The report positions it as a beneficiary of both the satellite story and consumer electronics growth.

  Risks

  If launch cadence, tender timing, customer orders, and higher content value fall short of expectations, target price realization will be affected.

• Motherson Sumi Wiring India (MSUMI IN)

  India EV penetration and higher wiring harness content

  Strengths

  EV wiring harness content is higher than ICE, at about 1.6x for cars and 4-5x for two-wheelers; SUVs and greater feature content lift value per vehicle.

  Weaknesses

  Rising minimum wages and the stabilization period of greenfield projects create cost pressure.

  Comparison

  Compared with general auto components, wiring harnesses have greater content elasticity in EVs and highly equipped models.

  Risks

  OEM production schedules, new model launches, price pass-through, and cost control may disappoint.

• LG Chem (051910 KS), L&F (066970 KS), EcoproBM (247540 KS)

  Korean cathode materials and the European EV supply chain

  Strengths

  All three companies are maintained at Buy, and EcoproBM's Hungary capacity plus its high-nickel cathode strategy could benefit from a recovery in the European EV/battery industry.

  Weaknesses

  The companies have different strategic paths, and the pace of earnings recovery and capacity utilization may diverge.

  Comparison

  EcoproBM stands out more for its Hungary plant and high-nickel products, while the others need to be assessed in combination with their own customer bases and product roadmaps.

  Risks

  European subsidies, demand recovery, onshore supply chain regulation, line ramp-up, and product transitions all carry uncertainty.

• Largan Precision (3008 TT)

  CPO components, PMLA, and FA automation potential

  Strengths

  PMLA and FA shown at COMPUTEX achieved +/-0.3um precision and have full automation potential, with the target price raised to TWD4,310.

  Weaknesses

  For CPO optical engines to move from a niche market to mass production, bottlenecks in FA/FAU production and test automation still need to be solved.

  Comparison

  The report believes its integrated prism plus microlens solution helps reduce efficiency loss and assembly yield loss.

  Risks

  CPO mass-production timing, customer adoption, automation yield, and competing solutions could all affect valuation.

Key data

• Report date2026-06-09Both the file name and the main text point to June 9, 2026.
• Alibaba AI cloud metricsAI products account for 30% of external cloud revenue, have grown at triple-digit rates over the past 11 quarters, and are expected to reach 50% within a year.Management said MaaS, price increases, and T-Head chips will drive cloud margins to 11-12% within two quarters, with a long-term target of 20%.
• Baidu AI business inflection point1Q26 AI-driven business revenue exceeded CNY13.6bn, up 49% YoY, accounting for 52% of BGB revenue.AI Cloud Infra revenue was CNY8.8bn, up 79% YoY, making it the largest and fastest-growing component of the AI business.
• Bilibili operating cadence1Q advertising revenue rose 30% YoY, while gaming revenue fell 12% YoY.Management expects gaming growth to turn positive in 4Q26E and proposed a medium-term non-GAAP operating margin target of 15-20%.
• WIIM growth assumptions2025-28F net profit CAGR is projected at 26%, and filter business sales CAGR for 2020-25 was 54%.Target price was raised from IDR3,550 to IDR3,950, with Buy maintained.
• Japanese investor May fund flowsBought JPY3,086.1bn of foreign bonds and sold JPY2,718.1bn of foreign equities.Banks continued to slightly reduce foreign bond holdings, while pensions shifted from foreign equities into foreign bonds and Japanese bonds.
• US rate riskProbability of an October rate hike is close to 65%.A stronger-than-expected US jobs report made a rate hike this year look more realistic, and the report believes risk-off flows are dominating.
• China shipbuilding order shareAbout 63% for full-year 2025 and nearly 70% in 1Q26.The suspension arrangement for China-US Section 301 port fees will expire on November 10, 2026, and there is currently no follow-up framework.
• Sunway satellite value chainChina's full-year satellite launches in 2026 may exceed 200, with total launches potentially above 300.The report believes high-frequency launches of the Spacesail/G60 and GW constellations could support higher content value for the company, with the target price raised from CNY87 to CNY138.
• India paint 4QFY26Volume, sales, and EBITDA grew 11.1%, 7.6%, and 19.3% YoY, respectively.Growth exceeded the average of the past eight quarters, and the report believes the return of price growth could drive sales growth.
• Korean cathode material capacityEcoproBM total cathode capacity is 244ktpa, including 54ktpa in Hungary.The first line is planned to start production in June, while the second line is expected to begin in 2H26E; recovery in the European EV/battery industry is the main support.
• Largan CPO componentsTarget price was raised from TWD3,290 to TWD4,310, implying about 22% upside.PMLA and FA demonstrated +/-0.3um precision and fully automated potential at the COMPUTEX showcase.

Impact & implications

For portfolios, the report suggests shifting Asian opportunities away from broad market beta toward more specific fundamentals: AI cloud infrastructure, satellite/consumer electronics, the EV supply chain, and selected Indian consumption chains have clearer growth drivers; however, repricing of US rates, BOJ and Fed meetings, the expiry of shipbuilding trade policy arrangements, falling steel prices, and company execution progress will affect risk-reward.

Risks

• Strong US employment has raised the probability of rate hikes this year, and higher long-end yields may pressure risk-asset valuations.
• After the BOJ and FOMC meetings, the market may again worry that the BOJ is behind the curve, putting both Japanese equities and bonds under pressure.
• The suspension arrangement for China-US shipbuilding Section 301 port fees will expire on November 10, 2026, and the lack of a follow-up framework will increase policy uncertainty.
• AI cloud, satellites, CPO, and the EV supply chain all depend on customer orders, capacity rollout, and technology roadmap execution, implying high execution risk.
• Indian long steel prices continue to fall, creating pressure on steel profits and sector momentum.
• If price increases by Indian consumer goods companies suppress volumes, the continuity of growth after 4QFY26 may weaken.
• Recovery in Korean cathode materials depends on European EV demand, subsidies, and local supply chain regulation; if policy or demand underperforms, earnings will suffer.
• The report contains multiple summaries, and some target prices and ratings lack full valuation detail, so the original in-depth reports should be consulted before using it for standalone investment decisions.

What to watch

• Whether AI products as a share of Alibaba's external cloud revenue rise from 30% to 50% as management expects.
• Whether Baidu AI Cloud Infra revenue growth and the share of AI-driven business can continue to outpace traditional search advertising.
• Whether Bilibili's gaming revenue turns positive in 4Q26E, and how IP launches such as Lumi Master and San Wang perform.
• The 2026 launch cadence of the Spacesail/G60 and GW constellations, second-generation satellite tenders, and Sunway customer qualification progress.
• The probability of a US October rate hike, and changes in yields and risk appetite after the FOMC and BOJ meetings.
• Whether the suspension arrangement in the China-US shipbuilding dispute is extended or replaced with a new framework before November 10, 2026.
• The impact of post-April price increases by Indian paint companies on volume and revenue growth.
• The production ramp of EcoproBM's first and second Hungary lines and European orders for high-nickel cathodes.
• Whether Largan's FA/FAU automation yield and CPO optical engine production scale expand beyond the niche market.
• Whether Japanese investors continue rotating from foreign equities into foreign bonds and Japanese bonds.