The 720: TSMC, MiniMax, China Data Centers, Yum China, Li Ning, CR Beer, Japan Autos, FMG downgrade, CICC

Research evidence excerpt

The 720: TSMC, MiniMax, China Data Centers, Yum China, Li Ning, CR Beer, Japan Autos, FMG downgrade, CICC

Goldman Sachs The 720

Japan Automobiles – Earnings Forecasts Revised Upward. We revise upward our

FY3/27-FY3/29 earnings forecasts for the five automakers in our coverage, driven by

favorable US sales, lower crude oil prices, and a weaker yen assumption of ¥160, which

offset higher memory prices. Specifically, our FY3/27 and FY3/28 earnings estimates rise

by 20% and 5% on average, respectively, as automakers secure profits ahead of

anticipated cost-push inflation. Consequently, we raise our 12m TPs for Buy-rated

Honda to ¥1,850, Buy-rated Subaru to ¥3,550, and Neutral-rated Mazda to ¥1,300,

while leaving Toyota and Nissan unchanged. We remain constructive on automakers

benefiting from the structural shift toward hybrid vehicles in the US market. Kota Yuzawa

China Consumer | Yum China, Li Ning, CR Beer

Yum China – 2Q26 Preview: SSSG Improvement on Track – Buy (on CL). We expect Yum

China to deliver sequential same-store sales growth improvement in 2Q26, forecasting

+1% year-over-year for both KFC and Pizza Hut despite a softer macroeconomic

backdrop. We project 11% year-over-year sales growth and anticipate profitability will

be supported by cost control capabilities, offsetting a high margin base and headwinds

from an increasing delivery mix. We fine-tune our 2026-28 net income forecasts by less

than 1% to reflect revised FX assumptions and higher revaluation losses. We maintain

our 12m TPs of US$58/HK$452. Michelle Cheng

Li Ning – Muted Near-Term Demand with 2H-Weighted Brand Investments – Buy. We

maintain our Buy rating and HK$26.7 12m TP following management meetings that

highlighted a soft second-quarter demand backdrop and deeper industry discounting.