J.P. Morgan sees machine-tool and semiconductor investment supporting automation in Taiwan, but has cut its earnings forecasts for Chinese automakers; company results also show that revenue growth and improvements in profit quality do not always move in step.
The growth drivers of four industries are diverging: physical AI depends on collecting real-world data, optical connectors already have earnings and orders to support them, refrigerants rely on quota constraints to stabilize prices, and overseas auto expansion is shifting from an export rush to local production.
Nomura believes the US auto market will remain relatively strong in the near term, but actual demand has exceeded levels implied by macroeconomic indicators. For Japanese automakers’ earnings, the focus is on how raw material costs flow into profits, while European local manufacturing policies could put further pressure on Mazda.
Goldman Sachs has cut its earnings forecasts because of weaker domestic demand and higher tax costs. BYD and NIO benefit from new products and an improved product mix, while XPeng, Li Auto and Hesai face pressure on gross margins or R&D spending; sales growth may not translate into profit growth.
