J.P. Morgan ASEAN FTM 10 Jun 26 SG Banks: Many moving parts, d/g DBS to N; D/g WLCON to non-consensus UW; IATA outlook: Structural divergence in Asia; PH Utils: El Niño sector impact; KEP: Almost 1GW DC capacity

Research evidence excerpt

J.P. Morgan ASEAN FTM 10 Jun 26 SG Banks: Many moving parts, d/g DBS to N; D/g WLCON to non-consensus UW; IATA outlook: Structural divergence in Asia; PH Utils: El Niño sector impact; KEP: Almost 1GW DC capacity

James R. Sullivan, CFA AC Asia Pacific Equity Research

(65) 6882-2374 10 June 2026 J P M O R G A N

james.r.sullivan@jpmorgan.com

differentiated: Singapore Airlines (OW) and Cathay Pacific (OW) remain preferred beneficiaries of rerouted premium

demand and cargo flows through Changi and HKIA, while Chinese airlines face a more challenging mix of high fuel exposure,

weak pass-through and price-sensitive domestic demand. Recent China industry color reinforces this caution, with domestic

industry flight capacity down around 10% Y/Y in May, June still seeing cuts, and the domestic fuel surcharge staying high, at

Rmb80/Rmb150 for routes under/over 800km, creating further pressure on leisure demand and load-factor quality. We are UW

on China Eastern-H/A and China Southern-H/A, as sustained high fuel prices could drive ~Rmb4B in net losses for each of

the Big 3 airlines under a scenario of Brent near US$100/bbl, with limited offset from fuel surcharge, given effective pass-

through around 30% and no fuel hedging. The IATA downgrade also argues for caution for Chinese airports, as global capacity

cuts directly pressure international traffic, which carries higher aero charges and duty-free monetization, though we recently

upgraded Beijing Capital Airport to Neutral after de-rating, while maintaining a selective stance, with Shanghai Airport (OW)

preferred and Guangzhou Airport (N) and Shenzhen Airport (UW) constrained by cost drag or weaker monetization.

Philippine Power & Water Utilities (Jelline Gaza, CFA), Philippines

El Niño: Riding the heat, holding the tap