Goldman Sachs has released a research report titled "The 720: Investing in a Differentiated Asia." In this report, Goldman Sachs points out that investing in Asia is not a homogeneous investment decision. The investment environment across different markets, sectors, and themes is increasingly showing differentiation. By market capitalization, the region has now become the world's second-largest market after the United States, with a total market value of US$50 trillion, stronger market liquidity, and more pronounced technology-driven characteristics.

Goldman Sachs notes that after 15 years of below-potential growth, it expects Asia's earnings to grow 34% during the 2026 to 2028 period, primarily driven by the technology sector. The bank forecasts a compound annual growth rate (CAGR) of 20% for the information technology sector over the next five years. This expectation is mainly based on extraordinary growth in the memory industry in 2026, as AI-driven computing demand is propelling a strong and long-lasting technology hardware cycle. Accordingly, Goldman Sachs has raised its 10-year annual earnings growth forecast for the MSCI Asia ex-Japan Index (MXAPJ) to 10%, one percentage point higher than its previous estimate. The bank maintains a constructive view on the region, expecting a 26% US dollar-denominated price return over the next 12 months and an average annual US dollar-denominated total return of 14% over the next decade.

Goldman Sachs is overweight on technology-heavy North Asian markets, including South Korea, Taiwan, Japan, and China A-shares. To balance portfolio concentration risk, the bank recommends selectively allocating to certain non-AI themes that offer high earnings visibility, such as power, defense, and areas with continuously improving shareholder returns.

Investment Target Analysis and Ratings

Samsung Electronics -- Q3 2026 Operating Profit In Line, HBM Average Selling Price Forecast Raised

Goldman Sachs raised its 12-month price target for Samsung Electronics from 490,000 Korean won to 500,000 Korean won, and lifted its earnings per share (EPS) forecasts for 2026 to 2028 by 0.3%, 2.2%, and 0.1%, respectively, after the company reported preliminary Q3 operating profit of 10.74 trillion Korean won, broadly in line with expectations. Its resilient operating profit was mainly driven by strong DRAM and NAND margins and HBM bit shipments growing nearly 50% quarter-on-quarter on HBM4 momentum. Meanwhile, smartphone business losses were better than market concerns due to a favorable high-end product mix. Given that memory supply tightness is expected to persist, Goldman Sachs significantly raised its blended HBM average selling price (ASP) forecast for next year, expecting HBM revenue to grow 321% year-on-year and account for 20% of DRAM revenue.

Fast Retailing -- FY8/27 Guidance Above Expectations

Goldman Sachs maintained its "Buy" rating on Fast Retailing and its 12-month price target of 88,000 Japanese yen. The company reported FY8/26 operating profit of 718.4 billion Japanese yen, in line with expectations, while its FY8/27 operating profit and ordinary profit guidance both came in better than expected, with operating profit guidance at 830 billion Japanese yen. Goldman Sachs expects earnings expansion to continue as the LifeWear concept penetrates globally, mainly supported by strong sales performance in Uniqlo's international business and management's increased confidence in the expanding middle-class consumer base in Southeast Asia. Following the earnings announcement and the company's declaration of raising its dividend payout ratio to 50%, Goldman Sachs kept its FY8/27 to FY8/28 operating profit forecasts unchanged, expecting FY8/27 operating profit of 870 billion Japanese yen, 7% above market consensus. This forecast is mainly supported by strong overseas same-store sales growth, although the bank expects gross margins in markets excluding China to be flat or decline.

LG Energy Solution -- Q3 2026 Preliminary Operating Profit Massively Beat on ESS Ramp-Up

Goldman Sachs maintained its "Buy" rating on LG Energy Solution and its 12-month price target of 520,000 Korean won. The company reported preliminary Q3 results with operating profit of 756 billion Korean won, massively exceeding market consensus of 267 billion Korean won. Excluding the U.S. Advanced Manufacturing Production Credit (AMPC), the company's operating margin turned positive at 3.7%. Goldman Sachs believes this was mainly driven by improved fixed cost absorption from faster North American energy storage system (ESS) ramp-up and potential OEM "take-or-pay" compensation. The bank believes that core margin improvement and sequential revenue growth further support its investment thesis that accelerating ESS shipments will drive capacity utilization recovery and double EBITDA by 2028E.

Japanese Chemicals -- Earnings Forecast Adjustments for Three Major Chemical Companies

Goldman Sachs adjusted its earnings forecasts for major Japanese chemical companies, raising the 12-month price target for "Buy"-rated Resonac to 27,560 Japanese yen and lifting its FY26 to FY28 core operating profit forecasts by 1% to 8% after its petrochemical business divestiture and strong semiconductor materials demand. Goldman Sachs downgraded Asahi Kasei to "Neutral" and lowered its 12-month price target to 2,010 Japanese yen, while cutting its FY28 to FY29 operating profit forecasts by 3% to 8% due to increasing competition for its IgA nephropathy treatment Tarpeyo and the impending patent expiration of Envarsus XR. Goldman Sachs also downgraded Mitsui Chemicals to "Sell" and lowered its 12-month price target to 2,250 Japanese yen. Although the bank raised its FY27 core operating profit forecast by 35% due to naphtha-driven inventory gains, it expects these gains to reverse in FY28 as petrochemical imports from China create price pressure.

Xiaomi -- SkyNomad Product Mix Points to ASP Upside

Goldman Sachs stated that although the 70,000 confirmed orders in the first month of Xiaomi (01810) first SkyNomad model launch fell short of the market's most optimistic expectations, the bank believes underlying demand remains healthy and maintains its 12-month price target of HK$39 and its 2026 sales forecast of 450,000 units unchanged. Goldman Sachs noted that the initial product mix was significantly better than expected, with the high-end N90 version accounting for two-thirds of orders, implying a potential vehicle average selling price (ASP) of 260,000 RMB, about 10% above its estimate. Additionally, high take rates for premium optional configurations will also provide a boost to automotive profitability. Goldman Sachs believes that sustained order momentum, upcoming model refreshes, and overseas expansion in the second half of 2027 will drive the delivery growth trajectory in 2027 to 2028.

Hanwha Aerospace -- Transitioning to a Defense Technology Supplier

Given strong long-term fundamentals and a business transformation that the market has not yet fully recognized, Goldman Sachs believes the recent share price decline in Hanwha Aerospace presents an attractive entry point. Following the successful launch of the privately-led Nuri rocket, Goldman Sachs focuses on the company's transition to its "Defense AI 3.0" strategy. This strategy integrates space satellites, data centers, and advanced weapons to deliver highly optimized end-to-end tactical solutions. Although the share price may face short-term volatility due to weak Q3 results from delivery delays, Goldman Sachs expects earnings momentum to continue through 2030, driven by accelerating Middle East orders and increasingly clear potential project opportunities in the U.S. market. Goldman Sachs rates Hanwha Aerospace as "Buy" with a 12-month price target of 1.81 million Korean won.

China Resources Beer -- Cautious Near-Term Volume Outlook, but Premiumization Resilience Can Buffer Impact

Management expressed a cautious view on near-term beer demand, noting that Q3 2026 volumes declined quarter-on-quarter due to weakening on-premise channel consumption, which could lead to a slight full-year FY26 volume decline (Goldman Sachs estimates -0.7%). However, premiumization remains a long-term growth driver, and this trend remains intact, supported by Heineken beer sustaining year-to-date volume growth of over 20% and continuous product mix expansion. Although declining operating leverage and rising aluminum costs will pressure margins in 2H26, strict cost-saving measures in channel and brand investment should partially offset these effects. Goldman Sachs maintained its 12-month price target of HK$26.8 for China Resources Beer (00291) unchanged.

Ninebot -- Q3 2026 Performance Outlook and Earnings Forecast Adjustments

Ahead of the Q3 2026 earnings release, Goldman Sachs cut its 2026E to 2028E EPS forecasts for Ninebot (689009.SH) by 4% to 6% and lowered its 12-month price target from 64 RMB to 58 RMB to reflect slower sequential revenue growth and margin contraction. The bank expects Q3 revenue to still achieve strong but decelerating 18% year-on-year growth, mainly due to lower revenue contribution from high-margin robotic mowers entering the European off-season. In contrast, driven by peak-season seasonality, easing cost pressures, and continued market share gains, domestic electric two-wheeler (E2W) revenue growth is expected to accelerate to 18% year-on-year, with market demand also gradually recovering. Despite the recent share price pullback, the bank maintains a positive view because the company's structural growth logic remains intact, overseas expansion potential still exists, and the current risk-reward ratio is attractive.

China Consumption

Goldman Sachs believes that domestic tourism demand during Golden Week was relatively weak, but outbound tourism demand was stronger than expected. Due to rising airfares, tourists flowed more to short-haul destinations and neighboring Hong Kong and Macau. As tourists adjusted travel arrangements around the earlier Mid-Autumn Festival, cross-regional passenger flows grew only 0.7% year-on-year; meanwhile, cross-border outbound passenger flows grew 6.7%, benefiting from a stronger RMB. Goldman Sachs stated that China's National Day holiday consumption performance was broadly in line with cautious expectations but distorted by calendar changes -- the holiday was extended and long-distance travel demand was brought forward. Services consumption continued to outperform goods consumption, but performance diverged across sub-sectors: tourism and cultural activities achieved strong growth, while movie box office revenue hit a decade low. Goods consumption remained weak, with baijiu sell-through weaker than expected and sportswear retail trends under pressure, both highlighting consumer weakness. However, trade-in subsidies drove strong growth in home appliance sales, while IP retailers such as Miniso (09896) and Pop Mart (09992) maintained strong consumer engagement. Goldman Sachs remains cautious on airlines because fuel costs have not yet fully recovered. For China Tourism Group Duty Free (01880, 601888.SH), the bank maintains a "Neutral" rating due to declining average spending on duty-free shopping. However, the bank prefers Trip.com (09961, TCOM.US) given its optimistic revenue outlook and expects H World Group (01179) and Atour (ATAT.US) to report solid third-quarter results.

Macau Gaming -- Q3 Outlook

Goldman Sachs expects Macau's Q3 2026 gaming industry EBITDA to rebound 5% quarter-on-quarter to US$1.95 billion, mainly driven by stronger seasonal non-gaming revenue, stabilizing promotional intensity, and strict cost control, despite gross gaming revenue being flat quarter-on-quarter. With leisure tourists returning and favorable gaming win rate factors, Goldman Sachs expects Sands China and Galaxy Entertainment to achieve the strongest EBITDA quarter-on-quarter growth and market share gains; meanwhile, due to declining operating leverage and market share losses, the bank expects relatively weaker trends for Melco International and Melco Resorts (MLCO.US), and SJM Holdings (00880). Given that the sector currently trades at about 7 times EV/EBITDA versus a mid-cycle average of 11 to 12 times, with average dividend yields exceeding 6%, Goldman Sachs maintains "Buy" ratings on Galaxy Entertainment (00027), Sands China (01928), Wynn Macau (01128), and Melco Resorts.