GEMS FIRST TO MARKET

Research evidence excerpt

GEMS FIRST TO MARKET

Global Equity Research

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GEMS First To Market 27 July 2026

Top Stories

China: A preview of the July Politburo (Tingting Ge), China

The July Politburo is likely to prioritize faster deployment of the existing budget rather than a new fiscal package, with 4.7% 1H

GDP within 4.5–5.0% target range.

| Hyundai Rotem (Simon Han) (064350 KS, N, PT W180,000), South Korea

Downgrade to N; 2Q OP miss and lack of near-term order clarity

We downgrade Hyundai Rotem to Neutral and cut our Dec-27 PT to W180K (from W300K) on limited near-term order catalysts.

2Q26 OP missed Street/our estimates by 18%/29%, driven by weaker Poland EC1 mix, lower-than-expected Poland EC2 sales

(vs. our prior aggressive EC2 ASP assumptions), and softer domestic defense margins. While Peru remains the most imminent

pipeline, management provided limited incremental updates, and we see a low probability of meaningful pipeline conversion

before late-2026, potentially keeping the stock range-bound. Reflecting the miss and lower visibility, we cut 2026E/2027E OP

by 21%/16%, and lower our 2027E target P/E multiple to 17x (from 23x; ~20% discount to global defense peers), driving the PT

cut. Upside risks include a sector re-rating tied to Middle East developments and improved political/procurement visibility in

Romania/Iraq/Poland.

| Weg (Marcelo Motta) (WEGE3 BZ, OW, PT R$56.00), Brazil

Setting Dec-27 PT at R$56.00 and Upgrading to OW; High Quality at Attractive Valuation