The Point for Asia Pacific

Citi Research maintains a cautiously optimistic outlook for China in 2H26 while highlighting strong AI-related growth across regional technology and infrastructure sectors.

Key Takeaways

• 1.Citi is cautiously optimistic on China's 2H26 outlook, favoring A-shares over H-shares due to higher technology exposure and liquidity.
• 2.The AI infrastructure cycle remains a primary driver for hardware manufacturers like Hon Hai and Quanta, despite potential margin headwinds.
• 3.Chinese Cloud Service Providers (CSPs) are ramping up AI capex, further supported by U.S. clearance of limited Nvidia H200 chip sales to China.

Table of Contents

• Top Call
• China Equity Strategy - Cautiously Optimistic 2H26 Outlook; Prefer A to H; Upgrade Insurance
• Hon Hai Precision (2317.TW) - AI Pivot Continues to Gain Momentum with OPM Upside
• Laopu Gold (6181.HK) - Recent investor feedback more positive than expected; 30D +ve CW on 618 promotion
• China Datacenters - Quick Thoughts on Chinese CSP Capex Up in 1Q26 & H200 China Sales Clearance
• OmniVision (603501.SS) - What's New from Citi 2026 China Elite Corporate Day - Recovery Expected From 2Q26
• Country Top Calls
• WUS Printed Circuit (002463.SZ) - What's New from Citi's 2026 China Elite Corporate Day
• Tata Motors Passenger Vehicles (TAMO.BO) - 4QFY26 Results Above Estimates, But JLR Margins Face Headwinds
• TES (095610.KQ) - 1Q26 Review: Beneficiary of Strong Memory WFE Capex Cycle
• Quanta Computer (2382.TW) - Stronger general-purpose server demand but GM headwinds
• Singapore Airlines (SIAL.SI) - FY25/26 core profits in-line with Street, Air India associate loss looks worsening
• Public Bank (PUBM.KL) - 1Q26 Call Takeaways: Capital return plan affirmed; Yield compression to drive upside
• Airports of Thailand (AOT.BK) - MarQ-26 core profits +12% YoY, a 10% beat and what's next?
• PLDT (TEL.PS) - 1Q26: A Slight Beat w/ 2Q Momentum So Far Still intact
• Key Rating and Target Price Changes

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