Morgan Stanley Greater China Technology Hardware: Cross-Industry Automation Read-Through from September 2026 Preliminary Orders
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Morgan Stanley reviews the Japan Machine Tool Builders' Association (JMTBA) preliminary orders for September 2026, which point to an industry upcycle. Total machine tool orders reached ¥223.0 billion, up 13% month-over-month and 60% year-over-year. Domestic orders of ¥64.0 billion rose 24% MoM and 46% YoY, while overseas orders of ¥159.0 billion gained 9% MoM and 67% YoY. The bank views the sequential overseas increase as consistent with seasonality, with strong YoY momentum reinforcing the upcycle thesis. China and Europe may outperform other regions, supported by manufacturing PMI readings, whereas North America looks comparatively soft, with manufacturing PMI edging down from 54.6 in August to 54.5 in September. Morgan Stanley maintains Overweight ratings on AirTAC (1590.TW) and Hiwin (2049.TW), arguing company-specific drivers should compound with the industry recovery. AirTAC screens attractively at 18x 2027E P/E versus its roughly 25x average since 2020, with the price target based on 29x 2027E earnings; Hiwin is expected to deliver margin expansion over the coming quarters on rising capacity utilization and price increases, and its target is based on 38x 2027E EPS.
Key exhibits
Exhibit 1
