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On Thursday, Goldman Sachs updated its Asia-Pacific (APAC) Conviction List, a curated selection of stocks the firm believes have high potential. Axis Bank (NSE:AXBK), Horizon Robotics, and NextDC were added to the list, while HDFC Bank, JD.com, Murata, and AAC were removed. The changes reflect Goldman Sachs’ analysts’ views on the evolving market dynamics and company-specific growth prospects in the region. Despite JD.com’s removal, InvestingPro data shows the company maintains a "GREAT" financial health score and trades at an attractive P/E ratio of 8.8x, with analysis suggesting significant undervaluation relative to its Fair Value.
Axis Bank is recognized for its potential improvement in profitability in the second half of fiscal year 2026 through fiscal year 2027, as the bank’s net interest margins (NIMs) are expected to recover, coupled with better systemic liquidity and a controlled cost-to-income ratio. For deeper insights into financial institutions and other sectors, InvestingPro offers comprehensive analysis of over 1,400 stocks, including detailed Pro Research Reports that transform complex Wall Street data into actionable intelligence. Analysts anticipate these factors to drive an acceleration in pre-provision operating profit (PPOP) growth. Axis Bank currently trades at a price-to-earnings (PE) multiple of 12 times on a 12-month forward basis, which is below its 10-year mean and at a discount compared to peers HDFC and ICICI. Analysts expect the valuation gap to narrow as the bank’s profitability strengthens.
Horizon Robotics, a leader in advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions, is poised for growth with its Journey 6 chips set to ramp up in 2025-2026. The chips are expected to cover a wider range of functions, leading to a diversification of the customer base and product mix upgrade. Analysts predict the company will announce more customer wins and benefit from product upgrades, resulting in a significant average selling price (ASP) and margin enhancements. Revenue growth for Horizon Robotics is forecasted to reach a compound annual growth rate (CAGR) of 54% from 2024 to 2030, achieving RMB 32 billion in 2030.
NextDC’s inclusion on the list is based on its significant data center investment program, which is expected to yield attractive and sustainable returns. With a first-mover advantage and a strong enterprise ecosystem, NextDC’s growth is supported by its contracted order book, which could potentially double the company’s EBITDA once the projects are constructed. The company’s expansion in the APAC market and imminent new contracts in Australia are additional growth drivers. Despite recent share price weakness, NextDC is trading at a significant discount compared to historical averages and peers, indicating a potential undervaluation.
Goldman Sachs also highlighted upcoming catalysts for stocks on the APAC Conviction List and provided insights into key strategy and sector reports, including Global Macro (BCBA:BMAm), China Strategy, and the China Export Tracker, which may influence the APAC markets and the selected companies. Looking at JD.com’s fundamentals through InvestingPro, the company shows strong financial metrics with revenue growth of 6.8%, a healthy debt-to-equity ratio of 0.38, and robust cash flows. InvestingPro subscribers have access to 13 additional ProTips and extensive financial metrics for making informed investment decisions.
In other recent news, JD.com has announced plans to hire 100,000 full-time riders in the next three months to bolster its food delivery services, intensifying competition with industry leader Meituan. This development follows a strategic move by JD.com to counteract a rival’s restriction on riders accepting delivery orders from JD, as detailed in a statement shared on WeChat. Additionally, JD.com is taking steps to ensure that affected riders have sufficient orders and is exploring job opportunities for their partners to enhance household income. In a separate development, Citi analysts have adjusted their outlook on JD.com by lowering the price target from $56 to $51 while maintaining a Buy rating. This adjustment comes amid a significant increase in JD.com’s order volume, doubling from 5 million to 10 million in just ten days, signaling a robust push into the food delivery sector. Despite the price target reduction, Citi analysts remain optimistic about JD.com’s potential for expansion in food delivery and on-demand retail, citing its strengths in supply chain and logistics. Furthermore, Chinese authorities have reportedly requested e-commerce platforms, including JD.com, to stop the practice of requiring vendors to offer refunds without product returns, aiming to reduce financial pressure on merchants. JD.com, along with other major e-commerce players, has yet to comment on this regulatory development.
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