J.P. Morgan ASEAN FTM 10 Jul 26 JSMR: Valuation alone won't drive outperformance, d/g to N; ISAT: Low-teens 2Q growth; VHM: Strong momentum; Consumer: Don't trade the weather; PH Banks: Support from fee waivers

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J.P. Morgan ASEAN FTM 10 Jul 26 JSMR: Valuation alone won't drive outperformance, d/g to N; ISAT: Low-teens 2Q growth; VHM: Strong momentum; Consumer: Don't trade the weather; PH Banks: Support from fee waivers

Aditya Srinath AC Asia Pacific Equity Research

(65) 6882-7138 10 July 2026 J P M O R G A N

aditya.srinath@jpmorgan.com

ASEAN Consumer (Jeanette Yutan), Philippines, Thailand, Indonesia, Malaysia

El Niño: Don’t trade the weather; watch the margins

The impact of the ongoing El Niño —which is expected to intensify into a moderate-to-strong episode and potentially persist

through November 2026 (link, link) —is less a direct equity signal for the ASEAN Consumer space and more a second-order

effect transmitted through higher input costs and inflation pass-through, in our view. Earnings risks due to the weather-induced

commodity price volatility are not yet priced in, as recent price performance is reflecting market reactions to geopolitical (the

Middle East conflict) and market idiosyncratic (elections in Malaysia, stronger-than-expected Thailand GDP growth) catalysts.

The most actionable investment strategy, in our view, is to be overweight on consumer names with pricing and demand

resilience, as they look best positioned to defend margins and capture demand in volatile conditions. We would avoid names

with concentrated commodity exposure and weak pricing power, as the lagging margin impact of weather-driven cost pressures

is not yet discounted. Our OWs are: Indonesia – MAPA, INDF; Thailand – CPALL, MRDIYT; Malaysia – FFB, 99SMART;

and the Philippines – CNPF.

Philippine Banks (Daniel Andrew Tan, CFA/Harsh Wardhan Modi), Philippines

Fee waivers support the longer-term case for the sector