Happy Chinese New Year – Year of the Horse

Tian Xuan Zhou (Oliver)
Bachelors Student, New European College – Munich

Happy Chinese New Year!

Asia markets

Japan – One interesting point that I want to point out in the snap election that may be overlooked by many. Other than the right wing populist party Sanseitō that made somewhat of a breakthrough in this general election winning 15 seats. Another party that made a similar breakthrough is a technocratic party Team Mirai, whose name translates to ‘Team Future’, winning 11 seats.

Now 11 seats out of 465 are unable to do anything in the house. Their manifesto aligns closely to this “responsible, proactive fiscal policy” that Prime Minister Sanae Takaichi pledged. Stimulate economic growth via strategic government spending, which I would assume children, education, tech, scientific research, new industries, and energy sectors to improve long-term national prospects and growth.

Where to look? Tech is an obvious one but it already feels late entering. Fanuc 6954, one of the world’s largest industrial automation and robotics manufacturers, already saw a huge jump in volume in December of last year. With the stock price already increased by around 30%, DO NOT become exit liquidity.

The defense sector is one that I like. This has to rely on going over or raising the 2% of GDP defense spending limit. Judging by the geopolitical tension that currently exists, this is widely expected. Also feels somewhat late but maybe some opportunities. IHI corporation 7013, although not specifically defense, has huge defense and aerospace exposure, one to watch.

Construction is also an obvious one. Obayashi 1802, one of five super general contractors in Japan, third in market cap of the four super general contractors that are publicly traded but seeing the highest trading volume.

Mitsubishi Heavy Industry 7011, a heavy industry and engineering conglomerate, covers a lot of the sectors I mentioned, a good long term hold for me – feels late but, buy.

China – Any underperformance can be easily explained. I cannot believe that I have not mentioned before (maybe I have), a slow bull market. This is very controlled, so who is selling? The China’s “national team”, well known term for the collective state-backed financial institutions that intervene in Chinese equity markets to stabilize prices, especially during periods of volatility or market stress, have been constantly supporting weak tech and property stocks to stabilize key indices. Therefore, after years of buying and supporting Chinese stocks and indices, selling in this period to prevent a very volatile bull market.

• Home appliance. The wait continues. Haier Smarthome 6690HK, flat for the week. TCL Electronics 1070HK, -3.13%, I think this is retail profit taking since volume is very weak, so not much to worry about.
• E-commerce. The weakness continues. Good job to those that sold off this sector last week. Alibaba 9988HK reported earnings on Thursday and margins and EBIT/EBITDA was super disappointing. A drop of 84.99% in EBITDA for the quarter ending September 30, 2025. I would stay off China internet stocks in general in the next weeks or so.
• Xiaomi 1810HK. Rather unfortunate. Started off the week strong but fell back to trading flat and the end of the week, mirroring the risk‑off sentiment in China tech.

US Market

“Private-Credit Warning Signs Flash After Blue Owl Unloads $1.4 Billion in Assets” – Wall Street Journal. Very interesting read this morning, and perhaps the bigger story is the incoming Nvidia earnings next week, expect much of this volatility to stay in the short term.

• Lam Research. Very steady amid tech weakness. +2.5% at the time of writing for the week (still trading on Friday)
• Cooling technology. I am quickly jumping ships here, no more Eaton, buying Daikin Industries 6367 in Japan. Not only the Japanese tech exposure but also Japan leaning into more domestic reliance. Although needs to improve on margin and EBIT. Still good buying volume on the 5th and 6th of February, buy.
• Novo Nordisk. Re-entered a long position. The European Commission has approved a higher 7.2 mg weekly dose of the obesity drug Wegovy. This expands dosing options for patients who need greater weight loss beyond the previous 2.4 mg maximum. Could be a positive kick start for recovery. I am not that worried about downside as there is active share buy back to support stock price at current level and as I have mentioned before, they are trading at prices as if GLP-1 was never invented in the first place, it cannot possibly get worse, right?