Goldman Sachs is cautious on Chinese tech behemoth Tencent Holdings , removing it from its Asia-Pacific “conviction list” of top picks. The company was added to the U.S. Department of Defense’s list of “Chinese military companies” on Jan. 7. That means that the government body will be prohibited from procuring goods or services directly from entities in the list in June 2026, and indirectly from June 2027, according to the National Defense Authorization Act for fiscal year 2024 . Goldman also removed Japan’s Sumitomo Mitsui Financial Group and China’s Sungrow Power Supply from its Asia conviction list for January, and added Kotobuki Spirits , JD.com and Iluka Resources . The stocks are featured in the investment bank’s “Conviction List – Directors’ Cut,” which it says offers a “curated and active” list of buy-rated stocks. They are selected by a subcommittee in each region which “collaborate with each sector analyst to identify top ideas that offer a combination of conviction, a differentiated view and high risk-adjusted returns,” Goldman Sachs says. Kotobuki Spirits Goldman likes Kotobuki Spirits for its “strong growth driven by brand power.” The company manufactures premium sweets that are typically sold at the airport, department stores, railway stations and other locations with high pedestrian traffic. Goldman analyst Norihiro Miyazaki expects its inbound sales to grow by at least 30% in the next few years on the back of “an increase in the total number of inbound visitors to Japan, as well as sales growth accompanying the expansion of regional airports (Fukuoka Airport in March 2025, Kansai International Airport in the summer of 2026).” The analyst also noted that prices of Kotobuki’s main brands have risen by a cumulative 30% to 40% over the last 10 years, adding that it’s a sign of its “strong ability to command prices” at a time of deflation in Japan. The company’s shares are listed on the Tokyo Stock Exchange and are have lost nearly 2.9% over the last 12 months. Goldman has a 12-month target price of 2,800 Japanese yen ($17.71) on the stock, implying 37.9% potential upside. JD.com Goldman also added Chinese e-commerce player JD.com to its list, citing factors such as a growth pick-up and “significant room for further valuation re-rating.” The bank’s analyst Ronald Keung says a rerating would be supported by “visibility of revenue acceleration from 4Q24,” policy support measures and lower procurement costs, among other things. Shares in JD.com are listed on the Hong Kong Exchange and trade as as American Depositary Receipt in the U.S under the ticker JD. Goldman has a 12-month target price of 181 Hong Kong dollars ($23.27) on the stock, implying 34.1% potential upside. Iluka Resources Also on Goldman’s list is Australian mining company Iluka Resources, thanks to its “compelling[free cash flow] story” and “rare earths growth potential.” The company has a 30% market share in the production of zircon, which is used to make ceramics and chemicals, analyst Paul Yong noted. That makes it the “world’s largest zircon producer,” he said, adding that the top three global producers have a market share of around 65%. He added that the company is also “a significant producer of high grade TiO2 feedstock,” which is used in paint. Yong is positive on Iluka’s project pipeline and forecasts a doubling in its EBITDA (earnings before interest, depreciation, taxes, depreciation and amortization) by 2028. Iluka’s shares are listed on the Australian Securities Exchange and trade as an ADR in the U.S. under the ticker ILKAY. Goldman has a target price of 7.7 Australian dollars ($4.79) on the stock, implying nearly 50% upside potential. — CNBC’s Michael Bloom contributed to this report.
