J.P. Morgan Taiwan FTM 15 May 26 Taiwan Equity Strategy; Asia Vital Components; Hon Hai Precision; Lotes; Pegatron Corp and More

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J.P. Morgan Taiwan FTM 15 May 26 Taiwan Equity Strategy; Asia Vital Components; Hon Hai Precision; Lotes; Pegatron Corp and More

Asia Pacific Equity Research

Taiwan First to Market 15 May 2026

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Taiwan Equity Strategy (Mixo Das)

Staying with the momentum in the most pure-play exposure to AI buildout

As perhaps the most pure-play exposure to the global AI buildout, the Taiwan market has grown in magnitude and importance

in recent years. Total market cap has increased from US$1.5tn in late 2022 to nearly US$5tn now (fourth largest in the world).

Taiwan’s weight in the MSCI EM index is now the largest - surpassing China’s last month. And TSMC is the seventh-largest

stock in the MSCI World index - attracting global attention. As we highlighted across the region last month, following the easing

of AI monetization concerns YTD and the shift in global macro conditions resulting from the Iran conflict, we recommend

staying with the momentum in the AI hardware space (embracing the inherent concentration risks). As such, we raise our

TWSE index base/bull/bear case targets to 47,000/50,000/40,000 and we remain OW Taiwan. Top picks in the market

include TSMC, Unimicron, Wiwynn, Alchip, Hon. Precision, CTBC . Across meetings in the US, HK and Singapore over the

past three weeks, we found investors on aggregate to be cautiously optimistic but less-than-fully positioned in the market.

FAQs typically revolved around markers of an eventual top in AI stocks, the general lack of credible short ideas, relative

preference among segments within Tech, long-term implications of AI, risks from the rapid buildup in retail leverage, wealth

effect spillovers and assessments of energy security.

Asia Vital Components (William Yang) (3017 TT, OW)