J.P. Morgan Asia Technology Tracker 20 Jul 26

Research evidence excerpt

J.P. Morgan Asia Technology Tracker 20 Jul 26

Asia Pacific Equity Research

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Asia Technology Tracker 20 July 2026

US Reports/Notes

Alcoa (Neutral), United States

2Q Results: Cost Headwinds and Supply Fears Overshadow Solid Execution (Bill Peterson)

Alcoa’s 2Q adj EBITDA of $901M slightly missed pre-print BBG by 2%, largely due to aluminum price

volatility at quarter-end. Overall, it was a solid print, with record Aluminum earnings, highest FCF since

2Q22 ($422M), and numerous production records. While guidance implies incremental cost pressures, in-

line with our expectations (link), management continues to optimize the footprint (>20% curtailed capacity

restarted) and capitalize on commericial opportunities, including in value-add products where premiums

remain resilient despite the pressured MWTP (-9% T1M). Shares were trading -3% after hours, which we

feel may be overdone and driven by fears around China capacity creep and Middle East impacts (capacity

restarts/cost headwinds). While China is on track to exceed its 45Mt production cap, we view this as

opportunistic, and concerns around ME restarts may be overblown given the Strait’s reclosure. On the S32

deal (link/ link), now referred to as “AliGroup”, management highlighted >$200M contribution from the

locked-box mechanism in 2Q alone. On spot pricing, we estimate >$600M in total and only ~$225M in

CVRs, implying a relatively attractive 4.5x 1yr-FWD deal multiple (Figure 2). Looking ahead, costs remain a