GEMS FIRST TO MARKET

Research evidence excerpt

Global Equity Research

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GEMS First To Market

20 August 2026

Top Stories

Indonesia Equity Strategy (Khoi Vu, CFA/Rajiv Batra/Benny Kurniawan, CFA), Indonesia

Prudent Budget, Defensive Allocation

A conservative 2027 budget with a smaller target fiscal deficit/GDP (2.4% vs. 2.85% in 2026) would reduce the volatility in

Indonesia's equities and currencies, in our view. However, headwinds remain ahead. Although 1H26 aggregate earnings grew

6% y/y and results were broadly in line with our expectations, consensus has already cut 2026E EPS and now expects a 0.9%

decline before a 8.7% rebound in 2027. Low foreign positioning, high domestic cash holdings and undemanding valuations

should limit further drawdowns, but MSCI/FTSE index risk and elevated global yields could cap upside for Indonesia stocks.

We shift to a more defensive sector allocation, upgrading Telecom to OW from Neutral and downgrading Industrials

from OW to Neutral. Most preferred stocks: BBCA, ANTM, ICBP, ISAT, ASII, and MAPA.

SK hynix (Jay Kwon) (000660 KS, OW, PT W2,750,000), South Korea

W40trn buyback has arrived sooner than expected; what's next for the stock

SK Hynix formally announced the long-awaited shareholder return policy, where the company plans to buyback and cancel

W40trn of treasury shares to boost shareholder returns over the next 3 months. Consequently, this share buyback plan

announcement is consistent with our view that an announcement was imminent within the next two months with more details

likely to be shared during the 3Q26 earnings call. Overall, we view this progressive buyback announcement as positive for the

stock sentiment given the size and duration of the buyback and expect the company to pursue additional shareholder returns

over the next 2 years. Following this announcement, we believe the worst is behind us and expect share price sentiment to

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