GEMS FIRST TO MARKET

Research evidence excerpt

GEMS FIRST TO MARKET

Global Equity Research AC Global Equity Research

10 July 2026 J P M O R G A N

gr_publications@jpmorgan.com

“Red-free” drones are going for gold as Taiwan scales its manufacturing base and wins overseas orders. Taiwan exported more

drones in Q1 this year than it did all of 2025, with the Czech Republic and Poland major buyers. A €3.5 - 5bn drone and

counter-drone project (DECODER) from the European Commission announced last week suggests a positive outlook, as does

a signed Letter of Intent with AUVSI - which provides de-facto drone certification for the US DoD. Government funding for the

drone program remains up in the air, but could eventually materialize at US$6.5bn, helping the sector to grow to a projected (by

the MOEA) US$1.3bn in size, but continued ramps in military spend for drone procurement by Western nations suggests there

could be long-term upside.

Brazil Oil & Gas (Milene Clifford Carvalho)

Export Tax Extension: Negative Headline, Limited Impact - Reiterate OW on PBR and PRIO

In an unexpected move, the Brazilian government extended the 12% crude oil export tax established under MP 1,340 for 60

days - with the possibility of an additional 30-day extension - citing renewed volatility in global oil markets and the need to

safeguard domestic fuel supply. The decision runs counter to recent signals that the measure was approaching its end, and it

was implemented through a mechanism that raises some procedural questions, extending the tax beyond the framework that

originally enabled it, which effectively lapses today. From a sector perspective, the extension is negative for crude producers in

the near term, particularly PRIO and Petrobras, though we estimate a relatively limited impact on valuation (-1.1% for PRIO and