Know Asia's
Business changes,before it hits your market.

Tomorrow, the most important political event of the year begins in Beijing: The "Two Sessions" (Lianghui).

Analysts expect a historic premiere: For the first time in three years, Beijing is likely to lower its GDP target – from "around 5%" to a range of 4.5-5%.

The new realism

21 of 31 Chinese provinces have already lowered their growth targets. The signal from the regions is clear: The era of double-digit growth rates is definitively over.

• Flexibility: Range target provides room for reforms instead of pure growth chasing

• Demographics: Aging population makes high targets unrealistic

• Geopolitics: Iran conflict and US trade war increase uncertainty

15th Five-Year Plan: tech instead of consumption

The Two Sessions mark the start of China's new blueprint (2026-2030). Central is the promotion of "New Quality Productive Forces":

• Technological sovereignty: Massive investments in AI, quantum computing, semiconductors, and 6G are intended to make China independent of Western export controls.

• Industrial upgrading: Instead of cheap mass goods, the focus is on producing high-end equipment and new materials.

• Problem zone consumption: It remains to be seen whether Beijing will provide real fiscal resources for households or continue to primarily subsidize the supply side (industry).

Trump factor

US President Donald Trump is expected in Beijing at the end of March. Experts therefore expect moderate diplomatic rhetoric to avoid jeopardizing the negotiating basis for tariffs.

PayPay, Japan’s dominant payment app with more than 72 million users, filed for its U.S. IPO on Monday.

Target: up to $1.1 billion on the Nasdaq. That would make it the largest U.S. listing of a Japanese company in history. At the top end of the price range, the valuation would reach $13.4 billion. SoftBank founder Son had originally aimed for $20 billion.

The details

PayPay is offering 31.1 million shares (ADRs) on Nasdaq, while SoftBank’s Vision Fund II is selling an additional 23.9 million. Price range: $17 to $20 per share.

According to PayPay’s SEC filing (April to December 2025): the company posted $656 million in profit on $1.77 billion in revenue. In the same period a year earlier, profit stood at $184 million — meaning it has more than tripled.

Anchor investors include Visa, the Qatar Investment Authority, and the Abu Dhabi Investment Authority. Together, the three will take 10% to 20% of the offering.

• Visa and PayPay signed a strategic partnership in February and plan to launch a joint U.S. venture for digital wallets supporting NFC and QR-code payments.

Why Japan’s payment market is so attractive

Since its founding in 2018 as a joint venture with India’s Paytm, PayPay has reshaped Japan’s payment landscape — paying via QR code at checkout instead of cash or credit card.

• QR-code payments now account for 9.6% of all cashless transactions in Japan, up from just 0.2% in 2018.

• With 72 million users in a country of 123 million people, penetration is close to 60%. Credit cards still account for 83%.

For SoftBank, the deal is part of a broader portfolio reshuffle: between June and December alone, the group sold $13 billion worth of T-Mobile shares to finance its AI push. Now PayPay is next.

The anchor-investor strategy has worked before: during the 2023 Nasdaq listing of chip designer Arm, SoftBank brought in Apple, Samsung, and Nvidia as investors — who were also customers. With PayPay, Visa plays that role.

👉 Sources: Bloomberg, Nikkei

The death of Iran's leadership through US-Israeli airstrikes has left Asia in a state of shock.

Beijing condemns the attacks as a violation of international law, and in the economic metropolises from Tokyo to Seoul, fear is growing of a total supply shutdown.

Diplomatic rupture

Beijing and Moscow sharply criticize the military escalation and the attempted "regime change." Concern is equally great in Southeast Asia:

• China: Describes the targeted strikes as unacceptable and calls for an immediate ceasefire to prevent a wider conflict in the Persian Gulf.

• Southeast Asia: Malaysia and Indonesia warn of a global catastrophe and see the stability of the entire "Global South" at risk.

• Japan: Caught in a dilemma between loyalty to ally USA and massive dependence on Iranian energy sources.

Economic consequences

Brent crude could rise from $73 to $100 if Iran permanently blocks the Strait of Hormuz. This would increase global inflation by 0.6-0.7 percentage points.

• Japan particularly affected: 90% of crude oil imports come from the Middle East. Nomura Research estimates a GDP drop of 0.65 percentage points with an oil price jump to $140.

Summit meeting in Beijing

The planned meeting between Donald Trump and Xi Jinping at the end of March is gaining massive significance. China will likely use the crisis as leverage to force concessions on trade tariffs.

$7 billion in revenue, 31,000 stores, but the delivery bill is coming due

The numbers Luckin Coffee reported last week tell two stories at the same time. One sounds like the greatest success story in Chinese coffee history. The other sounds like an expensive problem.

The success story

Luckin generated annual revenue of 49.2 billion yuan, $7.1 billion, in 2025, up 43% year over year.

• Net profit rose 22% to 3.6 billion yuan, $525 million.

• 8,708 new stores opened, bringing the total to 31,048.

• 160 international locations: 81 in Singapore, 70 in Malaysia, 9 in the United States.

Of the 31,048 locations, 20,234 are company operated, the rest run by franchise partners. That gives Luckin more stores than Starbucks worldwide.

For context: 4.1 billion freshly made drinks in one year. From June onward, monthly active customers exceeded 100 million for five consecutive months. Same store sales swung from minus 17% back into positive territory, averaging +7.5% for the year.

The problem: delivery is eating the profits

Q4 2025 tells a different story. Quarterly revenue rose 33% to 12.8 billion yuan, but profit dropped 39%.

The reason: a subsidy war between China’s delivery platforms Meituan and Ele.me starting in Q2 sharply increased delivery volumes in China. More customers ordered via app instead of buying in store.

• Delivery costs surged to 1.6 billion yuan, up 94.5% year over year. Same store growth slowed to just 1.2% in Q4, down from 14.4% in Q3.

Why this matters

Luckin is living proof that China can build homegrown consumer brands at global scale.

But the Q4 numbers highlight the dilemma: growth in China’s hypercompetitive delivery market does not come for free. 2026 will be the year Luckin has to prove whether its international expansion can scale fast enough to offset margin erosion in its home market.

👉 Sources: Yicai Global, DealStreet Asia, Caixin

In a spectacular policy shift and despite ongoing US sanctions, Chinese tech giant Huawei is teaming up with its sharpest US rivals like OpenAI, Google, and Microsoft.

Details

Huawei has joined the Agentic AI Foundation (AAIF) – an alliance to develop open AI standards. Co-founders: OpenAI, Google, Microsoft, Anthropic.

• Alliance goal: Establishing global open-source standards for the next big wave of artificial intelligence – agentic AI.

Why the alliance matters

Systems like OpenClaw (OpenAI) or Claude Code (Anthropic) mark the transition to tools that can independently code, plan, and execute complex workflows.

• Huawei sees this as a core pillar of its future business model and wants to prevent being left behind on standards.

Huawei has been on US sanctions lists for years. Export controls prohibit global deployment of Huawei's Ascend chips.

Huawei's strategy

The Shenzhen corporation is already a global standard-setter for 4G and 5G. Experts warn that excluding China from important bodies could bring disadvantages for the EU and US, as China now produces the most AI research results.

"Huawei serves as a paradigm for technological catch-up through standardization – from latecomer to leading multinational corporation."

The Hong Kong Stock Exchange (HKEX) released figures on Thursday that show: the supposedly doomed exchange is alive. And how.

The headline numbers:

• Net profit +36% to HK$17.8 billion ($2.3 billion), second record year in a row

• Revenue +30% to HK$29.2 billion ($3.7 billion)

• Dividend +23% to HK$12.52 per share

• 119 new listings, HK$286.9 billion ($36.7 billion) raised, up 226% year over year

With that, Hong Kong has reclaimed its position as the global No. 1 for IPOs.

What is driving the rally

Trump’s tariff policy has paradoxically played into Hong Kong’s hands. Trading volume on HKEX rose 93% in 2025. Through the Southbound Stock Connect program, which allows mainland investors to trade in Hong Kong, volume even surged 151%.

At the same time, foreign investors are looking for alternatives to the US market and are rediscovering Chinese tech stocks.

The pipeline: more than 400 active listing applications are currently filed with HKEX. Among the largest IPOs in 2025 were CATL, Mixue, and AI companies such as Zhipu AI and MiniMax.

Average first-day gains: around 40%. Next in line as a mega deal is Syngenta. The Basel-based agrochemical group, controlled by China’s Sinochem, is planning an IPO of up to $10 billion in Q2 2026.

Regulators watch closely

The financial regulator SFC has asked 13 IPO sponsors to conduct internal reviews due to “serious deficiencies” in the preparation of listing documents. These sponsors handle 70% of all IPO applications in Hong Kong.

Nevertheless: while all eyes are currently on Korea’s KOSPI rally, Hong Kong is quietly building the comeback of the decade.

👉 Sources: Asia Financial, DealStreetAsia, Caixin Global

Friedrich Merz traveled to Beijing with 30 corporate chiefs and secured a major Airbus order – but also made clear statements about overcapacity and unfair competition.

The Airbus coup: 120 planes for China

The most important economic news of the trip: Chinese leadership will order up to 120 additional aircraft from European aircraft manufacturer Airbus.

• Signal effect: The major order secures European jobs and serves as a political token at a time when Beijing often uses its aviation orders as a diplomatic instrument.

• Delegation: Merz is accompanied by a 30-person economic delegation, including the CEOs of VW, BMW, Mercedes-Benz, and Siemens Energy.

The demands

Merz spoke plainly at the Advisory Committee of German-Chinese Business:

• Currency appreciation: "Stronger domestic demand would facilitate trade without barriers"

• Reduce subsidies: "Reduce market-distorting subsidies"

• Reduce overcapacity: "Market consolidation where necessary"

• Market opening: German companies report "incomplete market opening"

The context: Germany's trade deficit with China reached a record €89 billion in 2025 – for the first time more than double the imports than exports.

The summit results at a glance

The Japanese chemical manufacturer Taiyo Holdings is close to a going-private deal with KKR. The board has deemed KKR’s offer acceptable.

Share price: around ¥6,000 – the takeover offer is expected to come in slightly below that level.

This deal underscores the latest chapter in a historic transformation.

Japan’s Stock Market Is Shrinking – For the First Time in Over a Decade

In 2025, 124 companies were delisted from the Tokyo Stock Exchange. It marks the second consecutive record year, 30 more than in 2024. The total number of listed firms declined by 58 to 3,778.

• For comparison: Japan has almost as many publicly listed companies as the United States, with only one-seventh of the economic output.

The driver: Since 2023, the Tokyo Stock Exchange has aggressively pushed for better capital efficiency. Companies trading below book value and failing to improve have come under pressure.

The result: Tender offers reached a record $68 billion in 2025. Total M&A volume involving Japanese companies hit around $350 billion.

The Take-Private Pipeline

KKR’s move on Taiyo is far from an isolated case. Just in recent weeks:

• Hisamitsu Pharmaceutical: $2.55 billion MBO (January 2026) – The Japanese pharma manufacturer wants to leave public markets to restructure long-term without analyst pressure.

• MCJ (PC manufacturer): $1.3 billion MBO with Bain Capital (February 2026).

• Raksul: $770 million buyout with Goldman Sachs (December 2025) – Goldman is returning half of the voting rights to management.

Japanese companies are chronically undervalued compared to international peers, sit on large cash reserves, but remain weak in shareholder orientation. PE firms buy cheaply, optimize governance and capital structure, and aim for value creation.

The Concern

Japan’s crown jewels, especially in pharmaceuticals and critical technologies, could fall into the wrong hands through foreign buyouts.

Goldman Sachs, however, sees no slowdown ahead: innovative financing structures using private credit are expected to enable even larger deals in 2026.

👉 Sources: BT SG, Bloomberg

The US company Anthropic accuses three Chinese AI firms of massively stealing data from its Claude model.

The irony: The company itself paid $1.5 billion in September 2024 for copyright violations.

The accusation

According to Anthropic, DeepSeek, Moonshot AI, and MiniMax created over 24,000 fake accounts and interacted with Claude 16 million times – to train their own models.

• The technique: "Distillation" – a large "teacher" model trains a smaller "student" model. Legal when done with your own system. Illegal when tapping into foreign systems.

China's "AI tigers" in the crosshairs

The accused companies belong to China's absolute elite and challenge US market leaders like OpenAI and Anthropic:

"How the turn tables"

The reactions on the internet were consistently critical.

Why? Because of Anthropic's own history:

• September 2024: $1.5 billion settlement – largest copyright settlement in US history

• Accusation: 500,000 books illegally downloaded and scanned from shadow libraries

• Payment: ~$3,000 per book to authors

OpenAI also made similar accusations against DeepSeek – and is meanwhile itself embroiled in 16 consolidated copyright lawsuits.

Private equity is sweeping through North Asia’s beauty sector — from Japan’s legacy brands to K-Beauty and Chinese high-end studios. Financial investors are systematically buying into high-margin consumer brands.

The logic: established brands + operational efficiency + international rollout = predictable value creation.

Japan: Governance Meets Capital

In Japan, corporate governance reforms have paved the way for take-privates and carve-outs. CVC and KKR are currently locked in a bidding war for Mandom. At the same time, Bain is acquiring FineToday for around 200 billion yen (~$1.3 billion).

• FineToday was estimated by the market at roughly ~15x EBITDA.

Japan offers less of a demographic growth story — but strong structural valuation levers.

South Korea: K-Beauty Becomes a Financial Asset

In 2025, nearly every major beauty transaction in Korea was PE-driven. Blackstone acquired Juno Hair, CLSA invested in Jung Saem Mool, and KKR bought packaging manufacturer Samhwa for $528 million.

Notably, many deals involve OEM/ODM players, packaging, and devices. Whoever controls production controls global scaling. Financial investors are using this to internationalize Korean brands.

Next phase: Beauty + Tech. Virtual makeup tools, at-home devices, digital skin analysis. Expected market growth through 2030: ~4.8% CAGR.

China: Premium & Platform

China represents premiumization: particularly in high-end beauty and spa services. International investors are positioning early in brands with pricing power and export potential.

Why Capital Is Flowing Now

1. Predictable cash flows

   Beauty is more recession-resistant than many other consumer segments.

2. Globalizable brands

   K-Beauty and J-Beauty resonate in the US and Europe.

3. Fragmented markets

   High consolidation potential — ideal for buy-and-build strategies.

4. Exit windows remain open

   Strategic buyers and IPO markets are still accessible for strong consumer brands.

Many transactions were completed at ambitious multiples. Private equity is betting that North Asian beauty brands will become the next global consumer export category.

• 2025 marked a peak multiple environment.

• In 2026, we are seeing early signs of multiple compression, especially for pure D2C players without clear profitability.

👉 Sources: DealStreetAsia, Caixin Global