CH Auto Update on EU Policy, KR Defense; Rotem Preview, CATL Preview, EU Cap Good Feedback

This report summarizes APAC industrials and autos developments. EU leaders agreed a hard annual import quota of 350k HEV/PHEV units, effective Dec 1, 2026 for four years with 6% annual expansion from year two; combined with China's April 2027 NEV export VAT rebate cut from 13% to 9%, JPM estimates 2027 earnings hits of 12–15% for BYD, 10–12% for Chery and 6–9% for Leapmotor, and remains cautious on China autos into 2027 while preferring Sinotruk, Chery and GAC. Korea's September defense exports were US$1.4bn (+74% q/q), with Hanwha Aerospace shipping 22/10 K9 SPHs to Poland/Romania and Hyundai Rotem another six K2 tanks; the sector view stays positive with Hanwha Aerospace as top pick. CATL's 3Q26 net profit is forecast at RMB24.5bn on 260–265GWh volume versus buyside expectations of RMB23–24bn. European capital-goods feedback was bearish and low-conviction, with Europe still preferred over the US.