The 720: China Strategy, Wiwynn, Eternal, DISCO, Prada, Gigadevice, China Healthcare, Korea Insurance, JP Building Materials

In Focus: China Musings argues cash return is the best hedge to higher US (and lower China) rates. GS reaffirms Overweight A-shares vs Marketweight H-shares, upgrades Banks to Overweight and lowers Insurance to Marketweight. As US and China rate cycles diverge, higher US rates are expected to restrain valuation upside and portfolio flows for offshore equities, while A-shares remain supported by an elevated equity risk premium, supportive capital market policies, easy financial conditions and 20% yoy 2Q26 CSI300 profit growth. The recommended approach is a barbell pairing stable Value, Dividend and Cash Return proxies with structural growth themes such as AI. The note also updates views on Wiwynn (Buy, TP raised to NT$4,000 on a strong September revenue beat and AI server expansion), Eternal (Buy, TP Rs400), DISCO (Buy, TP ¥105,000 on added production support signalling strong demand), Prada (Buy, TP HK$53 on Q3 share gains), Gigadevice (Buy, TP raised to Rmb413 on specialty DRAM mix up