Executive Summaries

Summary: The tariff overhang can be felt across regions in July. For HK, we believe low local interest rates can lend the market strong support amid tariff impact. Exporters could be good investment choices for July. We also replace T.S Lines with Chow Tai Fook Jewellery for HK, after the former exceeded our target price. US economic data is likely to weaken in July, which coincides with the coming earnings season for TAIEX stocks. We expect related Taiwan companies to generally see pressure from F/X losses, as well as weak 2H25F sales despite positive seasonality. Investors should thus watch for risk of greater stock market volatility. The Korea market in July is highly likely to enter a time correction phase, cooling off after the sharp rise in share price/valuation/supply and demand, while monitoring developments in internal and external variables. We advise using this period as an opportunity to overweight major AI value chain stocks, and leading sectors including shipbuilding, trade/capital goods (defense), media/entertainment, bio, and software. In China, attention should continue to be paid to new tech sectors, such as unmanned driving, robots & AI applications, as well as sectors seeing a rebound, such as new consumption and new business models.

In the Vietnam market, we maintain our view that green energy players should benefit from the updated energy policies, and PC1 (BUY) remains our top pick. Other plays on the green energy theme include GEG, REE, and HDG (all Not Rated). Meanwhile, upstream O&G services providers should also benefit as achieving the goals laid out in PDP8 will require increased exploration and production activity, with PVD (BUY) and PVS (Not Rated) among the beneficiaries. We maintain a neutral outlook on Thailand’s SET Index (SET) for July. The direction of the market will hinge greatly on the final outcome of trade negotiations with the US. In our analysis we outline three potential scenarios related to tariffs. For the Indonesia market, we remain skeptical about 3Q25 performance due to signs of weaker purchasing power. Therefore, the equity market is expected to move sideways in the range of 6,800-7,200, with a potential positive catalyst of a trade resolution with the US.

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