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Investing.com - JPMorgan has initiated coverage of TS Tech Co Ltd (7313:JP) with an underweight rating and a price target of JPY1,300.00 through December 2025.
The rating reflects concerns about Honda (NYSE:HMC)’s new battery electric vehicle model for China, which has underperformed, and significant challenges for TS Tech in expanding sales to local Chinese automakers, according to JPMorgan.
The investment bank expects prolonged weakness in TS Tech’s China business, while noting that returns on automation investments in the Americas are gradually materializing, though longer-term risks of down-trading remain a concern.
In Asia and Europe, JPMorgan anticipates TS Tech’s business with MSIL will expand, but points out that Honda’s weak sales in ASEAN countries are worsening the deterioration in model mix.
The firm also highlighted potential share supply/demand risks if banks and insurers among TS Tech’s shareholders continue unwinding their strategic holdings, despite the company’s high levels of net cash and equity ratio.
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