Goldman Sachs: Goldman Sachs adds three stocks to Asia-Pacific focus list, backing AI copper-clad laminate upgrades, tire cost cuts and steel capacity expansion

Which companies changed on the November focus list?

Goldman Sachs added Elite Material, Yokohama Rubber and JSW Steel to its Asia-Pacific focus list, while removing NYPCB, Shengyi Tech and Hong Kong Exchanges.
The list is selected from buy-rated stocks covered by Goldman Sachs and is usually updated monthly. Reasons for removal may include a catalyst having passed, expectations already being reflected in the price, or more attractive opportunities emerging; a list change does not necessarily mean the analyst has changed the rating.

Goldman Sachs is upbeat on upgrades to copper-clad laminates for AI servers: M9 products began mass production in the third quarter of 2026, while M10 is undergoing customer qualification, with shipments targeted for the second half of 2027. Goldman expects M10 to sell for 50% more than M9.
The new copper-clad laminate business for ABF substrates is seen as another source of profit. The report says its average selling price is about 1500 US dollars per sheet, versus around 130 dollars and 180 dollars for M7 and M8, respectively; the gross margin on ABF products is 50%–70%.
Contributions from capacity are a key condition: Goldman expects the business's capacity to expand by 100% in each of the fourth quarter of 2026 and 2027, and to capture 20%–30% of the segment market in 2028. Some investors are concerned about the timing of contributions from new capacity, while Goldman says the expansion is supported by long-term customer agreements and subsidies.
Goldman expects the company's earnings per share to rise year on year by 138% in 2027 and 83% in 2028. Meanwhile, co-packaged optics could reduce switch demand for high-end copper-clad laminates; the bank estimates that even under an extreme downgrade scenario, the loss to the potential copper-clad laminate market in 2028 would be less than 10%.

Goldman expects the company's business profit to grow year on year by 15% in 2027 and 12% in 2028, about 9% and 13% above market consensus, respectively. Its view is supported by the China factory lowering costs through higher output and the use of local equipment and raw materials, and extending the low-cost model to Mexico.
Exports by Chinese automakers are another source of demand: the company guides that sales to Chinese automakers will rise from 0% of its China business sales in 2023 to 24% in 2026; Goldman notes that the company has supplied the BYD SEALION 6.
The industry backdrop remains challenging: global tire capacity utilization is below 70%. Goldman believes relocating older capacity, building low-cost factories and closing high-cost plants in the US and Israel can help offset oversupply pressure.

JSW Steel aims to increase capacity from 31.9 million tonnes per year in the second quarter of fiscal 2027 to 53.8 million tonnes in fiscal 2031. Goldman expects EBITDA to grow by 38% and 14% in fiscal 2027 and 2028, respectively, driven by year-on-year growth of 6%–7% in Indian domestic steel consumption and a higher share of value-added products.
Expansion requires substantial funding: the report puts remaining cumulative capital expenditure at 1.48 trillion Indian rupees, with estimated annual spending of 220 billion–240 billion rupees through fiscal 2027. Goldman believes internal cash generation and deleveraging following the sale of BPSL can provide support; the company's net debt-to-EBITDA ratio has fallen to 1.28 times, below management's cyclical threshold of 2.5 times.
EBITDA growth does not mean earnings per share will grow in tandem: Goldman's model forecasts fiscal 2027 earnings per share of 68.97 rupees, below 92.81 rupees in fiscal 2026. Higher coking coal prices and additional domestic supply also pose pressures, and Goldman's profit outlook depends on demand absorbing capacity and an improved product mix.