Goldman Sachs has taken a cautious stance on Tencent Holdings, removing it from its Asia-Pacific “conviction list” following its inclusion on the U.S. Department of Defense’s list of “Chinese military companies.” This designation restricts procurement from Tencent after June 2026. Alongside Tencent, the firm also excluded Japan’s Sumitomo Mitsui Financial Group and China’s Sungrow Power Supply, while adding Kotobuki Spirits, JD.com, and Iluka Resources to its select list of recommended stocks.
Goldman Sachs highlights Kotobuki Spirits for its strong brand-driven growth, anticipating a 30% sales increase due to rising inbound tourism and expanding airport facilities in Japan. JD.com is valued for its growth potential and improved revenue visibility, with a forecast for a 34.1% share price increase. Analyst support stems from favorable policies and cost reductions. Lastly, Iluka Resources is noted for its robust free cash flow and growth in rare earths, with projections indicating a doubling of EBITDA by 2028. Goldman sees Iluka’s shares potentially rising by nearly 50%. Overall, these adjustments reflect Goldman’s focus on stocks offering high risk-adjusted returns amid evolving market dynamics.
