Institutional Research

Morgan Stanley forecasts China WFE spending to rise from US$45.6bn in 2026 to US$68.6bn in 2028, led by memory investment and domestic-tool qualification. It remains Overweight on NAURA, AMEC and ACMR, while lowering their price targets for R&D costs, delivery constraints and AMEC's share split.

• China WFE TAM is forecast to grow 9% in 2026 and 23% in both 2027 and 2028.
• CXMT and YMTC capacity additions underpin the memory-equipment outlook.
• The proposed MATCH Act could delay fab ramps but accelerate domestic equipment qualification.
• Morgan Stanley remains constructive on localization while cutting targets for NAURA, ACMR and AMEC.

Morgan Stanley argues that a slower China and US demand outlook, fading pricing power and changing consumer behavior challenge luxury's historic premium valuation. It remains positive on Ferrari, Richemont and Brunello Cucinelli because of their exposure to AI-related wealth creation and high-net-worth consumers.

• Morgan Stanley sees little scope for sector multiple expansion over the next 12 months.
• China luxury spending could grow only low single digits next year, while US spending could be about 5% at best.
• The report models LVMH Fashion & Leather Goods organic sales growth of 3% in 2027, below consensus of 4.6%.
• The institution retains Overweight narratives on Ferrari, Richemont and Brunello Cucinelli.
• Europe Luxury carries an In-Line industry view.

The report summarizes management discussions with Incyte, Regenxbio, AgomAb, Attovia, Compass Pathways and Arcutis. Key themes are de-risking clinical pipelines, advancing regulatory paths and expanding commercial opportunities across oncology, gene therapy, immunology, dermatology and psychiatry.

• Incyte outlined a post-Jakafi growth framework built around five major assets and business development.
• Regenxbio reiterated confidence in an accelerated approval path for RGX-202 in DMD and expects Phase 3 wet AMD data for RGX-314 in 4Q26.
• AgomAb advanced ontunisertib into Phase 2b for fibrostenotic Crohn’s disease using endoscopic passability as the primary endpoint.
• Attovia outlined a large chronic-pruritus opportunity for ATTO-1310, with additional Phase 1b data due in 4Q26.
• Compass remains on track to complete its COMP360 NDA submission in Q4 and potentially launch in treatment-resistant depression in 1H27.
• Arcutis cited continued Zoryve growth, expanding reimbursement and several upcoming dermatology pipeline decisions.

Goldman Sachs sees study initiation and initial human data from Sana’s hypoimmune islet-cell therapy SC451 and in vivo CAR-T candidate SG293 as the central potential value drivers. The report emphasizes encouraging supporting evidence for SC451, while noting SG293’s initial data timeline has moved to the first half of 2027.

• SC451 clinical transition in type 1 diabetes is planned for 2026 after remaining IND work and manufacturing technology transfer.
• Management expects an initial SC451 cell-survival readout around one month after implantation.
• UP421 investigator-sponsored data showed 14-month transplanted-cell survival and function without immunosuppression.
• Initial SG293 lymphoma data from an investigator-initiated China study is now expected in 1H27 rather than 2026.
• Management may consider capital raising after positive proof-of-concept data or partnerships.

The report argues that Horizon Robotics can sustain strong shipment growth through BYD programs, retain a leading China ADAS position, and build optionality from licensing, global projects and robotics.

• Management expects shipments above 7 million units, or about 40% year-on-year growth.
• Horizon targets more than 50% ADAS market share, with advanced-AD volumes exceeding those of the leading global player.
• Morgan Stanley assigns an HK$8.70 target price, implying 111% upside from HK$4.13.

Goldman Sachs reiterates Buy on Weichai Power's A- and H-shares after Generac's long-term Amazon supply agreement. The institution sees the deal as supporting demand for Weichai's Baudouin large diesel engines and easing concerns about post-2028 data-center power-business sustainability.

• Generac expects initial Amazon generator deliveries of $2.4bn in 2027-28, alongside a supply commitment tied to up to $8bn of aggregate payments.
• Goldman Sachs estimates the initial deliveries represent more than 7GW of generator sets, or over 2,500 to 3,000 units depending on unit size.
• Channel checks point to potential upside to Weichai's 2027 power-generation volume target and higher ASPs from larger backup-power units.
• The institution maintains 12-month targets of Rmb48.00 for A-shares and HK$55.00 for H-shares.

The report argues that port and logistics constraints, longer voyages and fragmented supply chains keep effective shipping capacity tight. It favors diversified Japanese shippers, Korean shipbuilders and engines, Chinese yards, and selected ports as structural beneficiaries.

• Container orderbooks exceed 30% of fleet, but port capacity has lagged vessel ordering and congestion remains widespread.
• Shanghai vessel waiting times are about 12 days, while the Clarksons global congestion index is at all-time highs.
• SCFI is up 162% year-on-year and more than 120% year-to-date, according to the report.
• Korean shipbuilders have earnings visibility through at least 2029, supported by AI data-center engines and naval demand.
• VLCC earnings on the Middle East Gulf-to-China route exceeded US$1 million per day, around 20 times last year’s level.

Morgan Stanley’s conference feedback highlights a sustained bullish tanker market driven by China’s crude restocking, capacity consumed by STS transfers and rerouting around regional disruptions. The report carries an Overweight rating on the Hong Kong-listed shares, with a HK$26.00 target price.

• Management sees sharp tightening in effective VLCC capacity alongside rising shipment demand.
• September’s rate spike should be reflected mostly in 4Q26 earnings, while 3Q26 earnings should improve sequentially.
• CSE has shifted most capacity to Middle East–Far East routes, including TD34, to capture higher spot rates.
• The company has six VLCCs on order and six bareboat charter-in VLCCs scheduled for 2027–28 delivery.

JPMorgan stays Overweight on GenScript after its collaboration with Lilly's TuneLab platform, seeing the arrangement as a route to more biotech customers and deeper integration of AI drug discovery with wet-lab validation.

• GenScript will provide standardized gene synthesis, protein expression, purification and testing services to TuneLab member companies.
• TuneLab had more than 100 biotech member companies as of June 2026, creating a potential customer-acquisition channel.
• JPMorgan sees possible future catalysts from customer wins, infrastructure sharing and research publications.
• The Dec-2027 target price is HK$41.00, based on a DCF valuation.

July retail sales fell by high single digits or more, but August improved as offline trends became less negative and livestreaming supported online sales. Morgan Stanley retains an Overweight rating and HK$22.50 target price.

• August retail sales were relatively stable year on year after a weak July.
• Offline discounting deepened in July-August amid competition and a greater outlet mix, but was not driven by inventory destocking.
• The firm projects 2026-28 sales and adjusted net-profit CAGRs of 6% and 7%, respectively.
• The HK$22.50 target is based on 17x Morgan Stanley's 2026 EPS estimate and implies 79% upside.