12 June 2025

COLLABORATIVE RESEARCH - EQUITY STRATEGY

DEGLOBALIZATION

A New Global Trade Order: Leaders and Laggards

©iStock

Bernstein contributors Societe Générale contributors

Head of Research Head of US Equity Strategy Global Head of Equity Strategy
Colin McGranahan Manish Kabra Charles de Boissezon
+19173448367 +44 20 7762 4243 +33 1 42 13 58 41
[email protected] [email protected] [email protected]

Director of Research, Asia ex-India Head of Asia Equity Strategy Head of Europe Equity Strategy
Neil Beveridge Frank Benzimra Roland Kaloyan
+852 2123 2648 +85221664309 +33 1 58 98 04 88
[email protected] [email protected] [email protected]

Director of Research, India European Equity Strategist Asia Equity Strategist

Venugopal Garre Kevin Redureau Makhdoom Muteeb Raina
+65 6326 7643 +33 1 58 98 02 30 +91 80673 11232
[email protected] [email protected] [email protected]

Head of Research, APAC and EMEA Global Chief Economist

Michael W. Parker Klaus Baader
+442077624090 +44 20 7762 4714
[email protected] [email protected]
Global Head of Economics, X-Asset &
Co-Head of Research, EMEA Head of Research Asia Pacific Quant Research
Emmanuel Turpin Wei Yao Kokou Agbo Bloua
+442076766869 +852 2166 4983 +44 20 7762 5433
[email protected] [email protected] [email protected]

This material is provided to you as part of your current research subscription

Societe Generale (“SG”) does and seeks to do business with companies covered in this research report. As a result, investors should: (i) be aware
that SG may have conflicts of interest that could affect the objectivity of this report; and (ii) not rely solely on this report in investment decisions.
PLEASE SEE DISCLOSURE APPENDIX AT THE END OF THIS REPORT FOR ANALYST(S) CERTIFICATION(S), IMPORTANT DISCLOSURES
AND DISCLAIMERS. ALTERNATIVELY, VISIT OUR RESPECTIVE GLOBAL RESEARCH DISCLOSURE WEBSITES:
For SG: SG Disclosures. For Bernstein: Bernstein Disclosures
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Contents

Executive summary .......................................................................................................3

SG MACRO .....................................................................................................................4
US trade deficit: 50 years and counting ......................................................................5
A slow-moving trend towards deglobalization ............................................................................... 5
Faster reshuffling and more decoupling ........................................................................................ 6
Decades of deficit = Imbalances are at an extreme ...................................................................... 8
Paradigm shift in the USD ............................................................................................................. 8
Framework for finding Leaders and Laggards in Global Equities ................................................ 10

US: A major beneficiary of globalization ..................................................................12

The Leaders…............................................................................................................................. 13
… and the Laggards .................................................................................................................... 15

Asia equities: two conflicting forces .........................................................................16

The Leaders…............................................................................................................................. 18
… and the Laggards .................................................................................................................... 20

Europe: at a turning point ...........................................................................................21

The Leaders…............................................................................................................................. 24
… and the Laggards .................................................................................................................... 26

SG New Global Trade Order Leaders and Laggards Baskets .................................28

Economics....................................................................................................................33
Globalization – An (almost) irresistible force ............................................................................... 33

BERNSTEIN ..................................................................................................................38
Deglobalization: It’s A Big World, After All ...............................................................39
Strategy ........................................................................................................................40
Asia Quant .................................................................................................................................. 40
India ............................................................................................................................................ 40
Sustainability ............................................................................................................................... 40

Sectors ..........................................................................................................................41
Industrials and Commodities ....................................................................................................... 41
Consumer & Retail ...................................................................................................................... 43
Financials .................................................................................................................................... 45
Healthcare ................................................................................................................................... 45
Technology, Media & Telecom .................................................................................................... 46

APPENDIX ....................................................................................................................49

Equity views, including any investment recommendations (“Bernstein Content”), are solely those of the Bernstein equity research
analyst(s) listed in this report. Please see page 62 for a list of covered companies of the Bernstein equity research analyst(s) for
which they certify their views under the US Securities and Exchange Commission’s Regulation Analyst Certification.
In this Report, SG provides various macro views which are identified as SG Macro from page 4 onwards. Macro Views are
developed by the SG Macro analyst(s) set out on the cover of this Report.

2 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Executive summary
The Trump 2.0 trade policies are driving profound shifts in global trade, likely more impactful than
those since the 'Tariff Era' began in 2018. While these changes are hard to predict, this report
combines analysis from SG economists and strategists with insights from Bernstein and
Autonomous analysts to examine the implications of a new global trade order. We also introduce
two thematic stock baskets: the SG New Global Trade Order Leaders and Laggards.

A New Global Trade Order. The SG Economics team is clear that while global trade growth has
slowed, it has not reversed. If anything, the ratio of global goods trade to industrial production
excluding China points to a steady and accelerating globalization trend. Recent years have shown
a clear reshuffling of supply chains, with current policies accelerating this for non-strategic goods
and increasing decoupling from China for strategic goods. Goods remain central to global trade,
and the US is still one of the largest consumers.

Trade policies impact capital flows and returns. The last US trade surplus was in 1976. Since
then, trade deficits have been the driving force behind current account deficits. Consequently, the
US has enjoyed a large capital account surplus, with foreigners owning $62 trillion in US assets
by 2024. If US tariffs reduce global trade volumes, driving the rest of the world to run smaller
surpluses, capital flows to the US will also slow down. This context may lead to significant currency
shifts, raising the risk of a weaker USD. Global investors should factor FX considerations into their
performance assessments.

It all starts and ends in the real economy. Bernstein analysts explored the changing global trade
landscape in the recently published Bernstein Blackbook Deglobalization: It’s a Big World, After
all, identifying potential winners and losers in a world of higher tariffs. In 38 chapters covering as
many industries and regions, they sieved through the potential implications of the new global trade
order for companies and sectors under Bernstein’s coverage. How will companies be affected in
their business models, industrial set-ups, commercial strategies? How should their strategies
evolve to adapt to the new challenges? Some of Bernstein analysts’ conclusions challenge long-
held views – to the point that some of the potential winners and losers from the new global trade
order may not be those commonly expected.

SG New Global Trade Order Leaders and Laggards Baskets. The SG Equity Strategy team
has launched a top-down framework, also leveraging on Bernstein analysts’ contributions, to
identify stocks for leaders and laggards in the new global trade order. The drivers differ by region:
the US emphasizes re-shoring of strategic industries, Asia focuses on "geopolitical distance," and
Europe balances a trade surplus with the US against a deficit with China. This top-down approach
results in a selection of 65 stocks in the SG New Global Trade Order Leaders Basket and 40
stocks in the SG New Global Trade Order Laggards Basket.

DEGLOBALIZATION 3
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

◼
SG MACRO

With thanks to Noe Senelet-Maite – Research Associate, SG Cross Asset Research – who contributed to this report

4 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

US trade deficit: 50 years and counting

SG economists are clear: global trade has slowed but there has been no reversal in trend. Indeed,
excluding China, the ratio of global goods trade to global industrial production points to a steady
globalization trend, with some signs of acceleration. Goods dominate global trade, and the US is
still one of biggest consumers of goods. The last time the US recorded a trade surplus was almost
50 years ago (1976).

Fast forward to today, and the US administration is seeking to rebalance the economy, which
would mean manufacturing capex moving to the US and counterbalancing the consumption share
of the economy. As President Trump recently said: “Maybe children will have two dolls instead of
30 dolls, you know. So maybe the two dolls will cost a couple of bucks more than they would
normally.”

Efforts to bring manufacturing back to the US started under Trump 1.0. The higher tariffs, however,
failed to reduce the US trade deficit, which has risen over recent years. What did occur, on the
other hand, was a reshuffling of supply chains, with fewer direct imports from China and more from
China+1 countries. Over the period, China “upgraded” its manufacturing sector, increasing its
domestic production of higher-added-value goods.

In this report, we explore the opportunities and challenges emerging from the Trump 2.0 tariffs.
We examine the shifts in supply chains in regions and sectors, and consider whether a trade war
could lead to a capital war and thus impact the USD. We combine a top-down view (SG Equity
Strategy) with bottom-up analysis (Bernstein Research), and offer investors an analytical
framework to identify potential leaders and laggards in global equities. We launch two thematic
stock baskets: 1) New Global Trade Order Leaders; and 2) New Global Trade Order Laggards.

EXHIBIT 1: US trade surplus/(deficit) over the past 100+ years EXHIBIT 2: Change in US trade flows since the Trump 1.0
tariffs

Source: SG Cross Asset Research/Equity Strategy Source: SG Cross Asset Research/Equity Strategy

A slow-moving trend towards deglobalization

The data do not support the view that globalization has gone into reverse. Global trade continues
to be dominated by goods. One key measure of globalization, the ratio of global goods trade to
global industrial production, has been on a slight downward trend since around 2012. This
suggests a slow-moving trend towards deglobalization.

Looking closer, we find that China is entirely responsible for this slowing trend, as its domestic
market is absorbing more of its production. In other words, excluding China, globalization is
going strong, and appears to be accelerating, with more recent data pointing to a global upturn
even including China. This does not mean that there won’t be deglobalization in the future, but it
does mean that reversing the longstanding globalization trend would be difficult and costly.

DEGLOBALIZATION 5
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

See SG Economics Globalization – You can’t beat it, but you might shape-shift it

EXHIBIT 3: Ratio of global trade to global industrial production (indices)

105

100

95

90

85

80
Global ex-China
75
Global
70
Jan-01 Jan-05 Jan-09 Jan-13 Jan-17 Jan-21 Jan-25
Source: CPB, SG Cross Asset Research/Economics

Faster reshuffling and more decoupling

The Trump 2.0 trade policies are likely to cause much greater disruption to global trade than those
under Trump 1.0. However, there are several real-world constraints on Trump’s ambitions to
rebalance trade and/or decouple from China. These constraints include differences in production
costs, the complexity of supply chains, and China’s manufacturing dominance and economic
weight.

What will be the result? In our view, there will be faster reshuffling of supply chains for non-strategic
goods and more decoupling from China in respect of strategic goods. And one critical question is,
where will the US draw the line in deciding whether goods are non-strategic or strategic? Will the
US import less? Quite likely. But that would not necessarily drive deglobalization, as reshuffling
often leads to increased capital expenditures, which are more trade-intensive than consumption.
See SG Economics A glimpse of the future of global trade.

Real-world constraints set to limit Trump 2.0 disruption

In shaping the future, real-world economic and physical constraints will, in our view, limit the role
of the current US policymakers’ wants and wishes.

◼The significant disparity in production costs, especially labor, between the US and emerging
markets means that most low- to mid-value-added manufacturing products, particularly those
requiring scale such as electronics assembly, will continue to be produced outside the US for the
US (and the world).

◼ The complexity of global supply/value chains (GVCs) and the dominance of China in
global manufacturing mean that reshoring entire supply chains for GVC-intensive sectors, such
as automobiles and electronics, would be prohibitively costly and time-consuming for the US.
Moreover, China's dominance in global manufacturing, with its production capacity more than
double that of all China+1 economies, makes it expensive for the US to cut ties completely. China
also leads in critical products, particularly rare earths.

Given the economic weight of China, the rest of the world is likely to strongly resist choosing
one side over the other in a US-China standoff. By way of illustration, most economies export
almost as much – if not more – to China than to the US.

6 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

EXHIBIT 4: China’s manufacturing capital dwarfs that of the EXHIBIT 5: The rest of the world may not want to choose
rest the world sides

Y: Exports to US as % of GDP; X: Exports to China as % of GDP

Manufacturing sector GDP as % of China’s

30
62 VNM
59 MEX
25

20
CAN

15 TWN
THA MYS
19 18 10
SGP
11 10 KOR
8 5 HUN CHL
6 6 6 EU
3 JPN PER
2 2 IND PHL BRA
POL
TURIDN AUS
0
USA EU JPN DEU KOR IND MEX TWN FRA IDN THA VNM MYS 0 5 10 15 20 25 30

Source: SG Cross Asset Research/Economics, CEIC. Source: SG Cross Asset Research/Economics, CEIC, IMF.

Faster reshuffling and more decoupling

By applying these realities to the ‘Trump shock’, we can tentatively sketch out a few features of
the upcoming transition in global value chains.

1. The “iPhone model”. There has been a reshuffling in supply chains for non-strategic mass-
consumer goods since Trump 1.0. We call this trend the “iPhone model” (given Apple’s plans
to move iPhone assembly for the US to India), and think it is likely to continue and accelerate.
Under this model, final goods would be imported from EM Asia or Mexico, while China would
remain a key part of the supply chains. The key question here is whether electronics are still
considered non-strategic, given that they contain semiconductors. Apple’s plan to produce all
new products sold in the US in India, shifting away from China, is also being challenged by
the Trump administration. The question is how much cost the US is willing to bear.

2. The “Semis model”. For strategically important goods, increased fragmentation of supply
chains and decoupling (which we call the “semis model”) is likely. China has already been
developing US-free semiconductor supply chains amid ever-tighter sanctions. Now the Trump
administration has shown a clear intention to develop China-free supply chains for goods
deemed critical to national security, including steel, aluminum, semiconductors, copper,
lumber, critical materials and shipbuilding. These items account for over 40% of US imports
– and if electronics are included, above 50%. That said, the US would need the help of its
allies, a lot of capex, and many years to reshore the production of these items.

Who would lose? Multinational corporations (MNCs) would face significant costs to shift from
China's efficient production base; US consumers would pay higher prices; and some Chinese
manufacturers of low value-added products would also suffer, given China's excess capacity.

Who would gain? China+1 economies – EM Asia and Mexico – would benefit from the reshuffling
by capturing most of China's share of US imports of consumer goods for which mass reshoring is
too costly. For strategic goods, companies with the necessary know-how, such as Japanese and
Korean companies in batteries and shipbuilding, would stand to gain – most likely on the condition
that they make significant investments in the US.

DEGLOBALIZATION 7
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Decades of deficit = Imbalances are at an extreme

The last US trade surplus was in 1976. Since then, trade deficits have been the driving force for
current account deficits. Consequently, the US has enjoyed a large capital account surplus. As
per Kit Juckes, Global Head of FX strategy, at the end of 2024, foreigners owned $62tn of US
assets: $17.5tn in direct investments, $17.6tn in equities (c.25% of total), and $14.9tn in bonds
(US Treasuries total $7 trn, which is 40% of Treasury Notes and bonds outstanding), with smaller
investments making up the rest. Europe and Asia dominate foreign ownership of US assets. More
recently, the incremental rise has mostly come from Asia, with almost all the major Asian
economies running persistent current account surpluses since at least the 2000s.

If US tariffs end up driving down global trade volumes and forcing Asia to run smaller surpluses,
then Asia will have less capital flows for external investment. But that alone would not mean that
Asia would have to sell down its external investment stock or even reshuffle its asset allocation.
However, one of the outcomes of a reduction in the US trade and current account deficits would
be a reduction in the US capital account surplus.

Moreover, US policies, such as Section 899 of the bill that the US House of Representatives
passed recently, would allow the US to impose additional taxes on companies and investors from
countries that it deems to have punitive tax policies. While these policies may only be used by the
US to increase its negotiating power, they could nonetheless discourage further global investment
into the US.

We believe this context will lead to substantial shifts in currencies, with the risk of a weaker USD.
For investors, returns on equities can look quite different when currency adjusted; for instance, the
S&P 500 is +2% ytd 2025 in USD terms, but for a EUR investor (unhedged) the index would be
down 9%.

See: Helping exporters at the expense of investors, will weaken the dollar and A portrait of Asian
surplus investors and a few questions for the future.

EXHIBIT 6: Foreign holdings of US assets have reached new EXHIBIT 7: Asia’s holding of US securities: total (US$tn)
highs

US debt: Treasury US equities

4
US debt: others

0
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Source: SG Cross Asset Research/Forex Source: SG Cross Asset Research/Economics, TIC

Paradigm shift in the USD

The US dollar is currently expensive vs. all the major currencies. For instance, EURUSD is, at
present, between 2-3 std deviations undervalued on a PPP basis. The last time a material shift in
the dollar occurred was in September 1985 with the ‘Plaza Accord’ – a common agreement to
devalue the USD. This Accord ended after a c.30% devaluation of the USD, and a new agreement,
the ‘Louvre Accord’, was set up to stop further depreciation taking place. Year to date, the USD
(DXY) index has already dropped by c.10%.

8 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

The reasons for this drop are cyclical, secular and event-risk driven. For instance,

◼ In the short term – US policy has induced uncertainty and raised expectations of Federal
Reserve cuts if the labour market weakens. Consequently, the USD is vulnerable to US-centric
shocks.
◼ In the longer run – The US's shift towards economic self-sufficiency is likely to jeopardize
fundamental demand for US assets and raise the cost of capital for both the public and private
sectors.
◼ Tail risk – Ongoing worries about the Federal Reserve's autonomy and concern that the bulging
US twin deficits (current and fiscal account) could potentially lead to the Fed playing its role as the
buyer of last resort for US treasuries, risking further devaluation of the USD.

Mind the USD impact on profits and performance

The USD can cause a tectonic shift beneath global trade and financial assets that can lead to
some investors gaining and others losing. For instance, the 30% drop in the USD in 1985-87 led
the S&P 500 to rise by c.50% during this period, but for a EUR investor the rise was less than half
that. Similarly for a USD investor (unhedged), with European equities delivering returns at par with
US stocks, i.e. rising by c.50%, the rise was substantially higher at c.90%. So, FX returns can add
to the local equity returns.

EXHIBIT 8: EURUSD is c.2-3 std deviations undervalued on a EXHIBIT 9: Global equity performance between the ‘Plaza
PPP basis Accord’ in 1985 and the ‘Louvre Accord’ in 1987

Plaza-Louvre accords performance

DXY -29%
MSCI USA 52%
MSCI Europe
dollar 92%
local ccy 47%
MSCI Japan
dollar 85%
Local ccy 184%
Source: Refinitiv, SG Cross Asset Research/Global Asset Allocation Total return between the Plaza Accord (22 Sept. 1985) and the Louvre Accord (22
Feb. 1987)
Source: Refinitiv, SG Cross Asset Research/Equity Strategy

Revenue exposure and cost base

The revenue exposure and cost base of companies must also be considered in assessing the
‘true’ impact of shifts in trade. For instance, the majority of the Tech-heavy Nasdaq-100 index
companies’ revenues are generated outside the US and they have a substantial cost base in Asia.
Changes in supply chains could be detrimental, especially for the ‘goods’ part of the index and in
particular Consumer Electronics and Durables. For equity indices in Asia, the situation is different,
for example the Taiwan index has >30% revenue exposure to the US while its cost base is largely
in Asia. But again, the ‘goods’ companies could have a negative impact on the profit margin,
impacting performances of equity indices.

DEGLOBALIZATION 9
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

EXHIBIT 10: Revenue exposure of equity indices

Source: SG Cross Asset Research/Equity Strategy

Framework for finding Leaders and Laggards in Global

Equities
In assessing the top-down impact on equities and the bottom-up, stock-level leaders and laggards,
for each region, we look at supply chain shifts, on/reshoring of activities, the impact of tariffs, FX
trends, and the focus on local content.

We split the equity universe into three regions: Americas (US), Europe, and Asia (China, Japan,
India, HK, Korea, and Taiwan). For each region, we identify companies that stand to gain from
deglobalization via four categories: (1) manufacturing capex (onshoring, China+1);
(2) "sovereignty" (including "strategic sectors" in Europe, and import substitution in China); and
(3) local content (in a high-tariffs world, global firms with a high local content in the US may get a
cost-structure advantage); and (4) a final category for other benefits.

We also split the companies that stand to lose from deglobalization into three categories:
(1) efficiency loss (reshuffling of the global chain resulting in operating margins pressure);
(2) additional competitive pressure; and (3) fall in exports (mostly for exporters to the US). A fourth
category includes non-tariff barriers, which could mostly hit Chinese companies (export controls,
delistings, US restrictions on capital flows).

EXHIBIT 11: Top-down framework for equities for New Global Trade Order Leaders and Laggards

Source: SG Cross Asset Research/Equity Strategy

10 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Using that framework, we obtain a list of 176 stocks, with 123 Leaders and 53 Laggards. The
resulting split by listing location is 30% for the US and 40% for Asia. In percentage terms, US and
Europe have more Laggards and Asia has more Leaders.

EXHIBIT 12: Regional split

Source: Refinitiv, SG Cross Asset Research/Equity Strategy

By sector, Tech and Industrials dominate the Leaders while Consumer Cyclicals dominate the
Laggards. We also note that, at this stage, goods are more exposed than services to the
deglobalization theme, both as Leaders and Laggards, as services are intrinsically more local.

EXHIBIT 13: Sector split: Leaders EXHIBIT 14: Sector split: Laggards

Source: Refinitiv, SG Cross Asset Research/Equity Strategy Source: Refinitiv, SG Cross Asset Research/Equity Strategy

DEGLOBALIZATION 11
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

US: A major beneficiary of globalization

US companies have clearly benefitted from globalization. The Tech-heavy Nasdaq-100 generates
the majority of its sales outside the US, while for the S&P 500 this share is 40%. The S&P 500
(ex-Financials) has benefitted on the cost front too, with its cost of goods sold as a % of sales
having dropped by 700bps since China joined the WTO. This trend is also visible across sectors,
with 8 of the 11 sectors having seen COGS drop as a % of sales. The biggest beneficiaries have
been the Tech, Consumer and Industrial sectors.

EXHIBIT 15: S&P 500 (ex-Financials): cost of goods sold as a EXHIBIT 16: Level 1 sectors: cost of goods sold as a % of
% of sales sales

S&P ex Financials COGS (% of sales) COGS (% of Sale) COGS (% of Sale), Pre-China joining WTO
72% 80% 80%
75% 75%
NAFTA enacted China joins WTO 70% 70%
70% 65% 65%
60% 60%
68% 55% 55%
50% 50%
45% 45%
66% 40% 40%
35% 35%
64% 30% 30%

62%

60%
94 95 97 98 99 01 02 04 05 06 08 09 11 12 14 15 16 18 19 21 22 23

Source: FactSet, SG Cross Asset Research/Equity Strategy Source: FactSet, SG Cross Asset Research/Equity Strategy

S&P 500 companies have been diversifying their supply chains since Trump 1.0 tariffs were
introduced, as while China’s share of US imports has dropped, other countries — such as Canada,
Mexico, Vietnam, Taiwan, or South Korea — have seen their shares increase. This supply-chain
diversification across countries has also been very much evident in Asia where, as exporters,
some countries offer similar benefits to China. Currently, for the Tech and Consumer Discretionary
sectors, two of the biggest weights in the S&P 500, 35-40% of suppliers are based in Asia. This
explains why any incremental tariffs are a net-negative for the S&P 500.

EXHIBIT 17: Share of US imports by country EXHIBIT 18: % of suppliers based in Asia by S&P 500 sector
China Canada Japan
Germany Vietnam Korea, South
25% Taiwan India Ireland 25%
Mexico China joined Start of
Trump
20% tariffs 20%

15% 15%

10% 10%

5% 5%

0% 0%
89 92 94 96 98 00 02 05 07 09 11 13 15 18 20 22 24
Source: Census Bureau, SG Cross Asset Research/Equity Strategy Source: FactSet, SG Cross Asset Research/Equity Strategy

The US is focussing on the on/reshoring of sectors that are critical for supply chains, namely
Defense, Tech (semiconductors/AI), Autonomous vehicles/transport, Energy, Agri, Pharma and
Mining. The SG US Reshoring Thematic Basket (SGIXUSRE) is exposed to the investment cycle
of these strategic industries. Under a higher tariff regime, portfolios should maintain a core focus
on Reshoring, and Domestic supply-chain names. Small & Mid-caps ex-junk stocks are also likely
to do well in a context of greater localisation.

12 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

EXHIBIT 19: The SG US reshoring and small & mid-caps EXHIBIT 20: SG US Reshoring Beneficiaries Basket
baskets have been the biggest beneficiaries of localisation (SGIXUSRE): performance
S&P 500 Index SG US Reshoring

480 480

430 Republican president: 430

380 Donald Trump 380

330 330

280 280

230 230

180 180

130 Democrat president: 130

Joe Biden
80 80
15 16 17 18 19 20 21 22 23 24 25
Source: FactSet, Refinitiv, SG Cross Asset Research/Equity Strategy Source: Refinitiv, SG Cross Asset Research/Equity Strategy

In our work, we use Bernstein’s research on deglobalization to help identify stocks that are likely
to benefit from shifts in manufacturing capex, new trade patterns, and fracturing geopolitics (‘the
Leaders’). Other stocks are likely to lose out (‘the Laggards’).

The Leaders…
The stocks that may benefit from these trends are split into four categories.
◼ Capex – The silver lining in all this may be that an increase in the average tariff rate leads to
domestically produced goods accounting for a higher percentage of total consumption. A rise in
the average tariff rate typically increases domestic production. And since the 2018 Trump 1.0
tariffs, a secular shift is visible, with domestic production’s share of goods sold having risen.
However, this does come at a higher cost and leads to the pass-through of inflation. This is
currently best reflected in the S&P 500 Equal Weight Industrials Index’s having outperformed the
S&P 500 Equal Weight Consumer Discretionary by 119% over the past decade. This trend should
accelerate as the tariff rate increases, and the focus for US policymakers (whether Republicans
or Democrats) will be on reshoring the critical industries.

EXHIBIT 21: 50 years of globalization: lower trade barriers led EXHIBIT 22: S&P 500 Industrials vs. Consumer Discretionary
to the US consuming fewer domestically produced goods performance on equal-weighted indices

350 Equal Weight Industrials 350

Equal Weight Discretionary
300 300

250 250

200 200

150 150

100 100

50 50
15 17 19 21 23 25

Source: Haver analytics, Bernstein analysis / extracted from Bernstein Source: Bloomberg, SG Cross Asset Research/Equity Strategy
Deglobalization report published 18 May 2025

◼ Sovereignty - While the S&P 500 stocks generally have high global exposure, the companies
in the sovereignty category benefit from having a larger local cost base and from being seen as
local partners outside the US. They also include companies focused on sectors where prices for
local producers are more attractive due to tariffs, as is currently the case for copper — with US
copper prices trading at premium to global copper prices.

DEGLOBALIZATION 13
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

◼ High local content - The third type of potential beneficiary consists of companies with existing
manufacturing facilities in the US and those with a higher domestic supply-chain bias. Currently
60% of suppliers of S&P 500 companies are based outside the US. Having a domestic vs. a global
supply chain offers a strong idiosyncratic driver that creates leaders in every sector on the back of
tariffs, and vice-versa. For instance, of all the sectors, Industrials and Consumer (both Staples and
Discretionary) have the highest domestic US exposure but the majority of their suppliers are
situated outside the US. During the US-China tariff and trade war under Trump 1.0 in 2018 and
2019, for Industrials that generated most of their sales in the US there was a bifurcation in
performance between those with local supply chains and those with global ones. To offer exposure
to this theme, we introduced the SG Domestic Supply Chain (SGUSDSC) Basket in our report, US
Equity Strategy - 2025 Outlook – Long ‘America First’.

EXHIBIT 23: Geographic revenue exposure vs. supply chain EXHIBIT 24: US Industrials: local vs. global supply chains
during Trump 1.0
100% Sales Exposure to the US % of suppliers in the US
90%
Local US exposure and local supply chains
80%

70%

60%

50%

40%
Global exposure and Global supply chains
30%

Source: FactSet, Refinitiv, Bloomberg, SG Cross Asset Research/Equity Strategy Source: Refinitiv, Reuters, SG Cross Asset Research/Equity Strategy

◼ Other - The fourth category comprises potential beneficiaries that we are not able to classify in
the other three categories. Some companies could benefit from the risk of the trade war turning
into a ‘capital war’, in which there would likely be a significant weakening of the US dollar (as
discussed earlier). In such an event, we would expect US stocks that are focussed on non-
manufacturing businesses to benefit the most. In this context, the stocks in the SG US Peak USD
Beneficiary (SGPKUSD) Basket are likely to be strong performers. We introduced this basket,
made up of 18 stocks set to outperform in a weaker US dollar backdrop, in our report US Equity
Outlook - Crisis of confidence is short term, ‘Great Rotation’ long term.

EXHIBIT 25: SG US Peak USD Beneficiaries Basket: EXHIBIT 26: SG US Peak USD Beneficiaries Basket: 12m fwd
performance PE

Historical returns prior to inception on 1 April 2025 are backtracked. Historical returns prior to inception on 1 April 2025 are backtracked.
Source: FactSet, Refinitiv, SG Cross Asset Research/Equity Strategy Source: FactSet, Refinitiv, SG Cross Asset Research/Equity Strategy

14 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

… and the Laggards

Similarly, we split the companies that are likely to lose out from deglobalization into three
categories.

◼ Efficiency loss - Reshuffling of the global supply chain, with a shift away from the most efficient
and cost-effective chains, is particularly detrimental to companies that have benefited significantly
from the globalised backdrop. Consumer goods and electronics are among the most sensitive to
this shift. For instance, the source of clothing imports into North American has shifted to Asia over
the past two decades. The cost of labour continues to be more attractive in Asia than locally in the
US. Leaders and laggards are set to emerge in these sectors, as while tariffs will result in a large
initial gross-margin (GM) headwind, some companies will be able to mitigate this through pricing,
cost-sharing, and a shift in supply chains.

EXHIBIT 27: North American clothing imports are also shifting EXHIBIT 28: Production in the US is cost prohibitive as
away from China, with Vietnam the big winner minimum wages are several times as high as in Latin
American and Asian countries

Source: Bernstein analysis & estimates, extracted from Bernstein Deglobalization Source: Bernstein analysis & estimates, extracted from Bernstein Deglobalization
report published 18 May 2025 report published 18 May 2025

◼ Additional competitive pressure - US companies with global exposure are set to face higher
local competition as preference for local producers and companies will likely increase. Anti-
American sentiment and tariffs pose a significant risk for global brands.

◼ Other - There are various other risks associated with a trade and tariff war. For example, the
trade war could shift from ‘goods’ to ‘services’, with tariffs then being applied when the US is a net
exporter of services.

DEGLOBALIZATION 15
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Asia equities: two conflicting forces

Companies in Asia face two conflicting forces.

◼ The first is increasing deglobalization. EM Asia would have much to lose from this, given
that it has gained a lot from global trade expansion in the past. As noted by the SG
economists, the last six years1 have seen China’s goods exports grow by 40% in volume, EM ex-
China's by 30%, and Japan’s by 6%. The US’ goods exports growth is on a par with that of Japan,
while the euro area and the UK have underperformed. Overall, emerging economies have
outperformed developed economies. And last year, global trade grew in line with the growth of the
world economy.

EXHIBIT 29: Exports (volume index, Dec 2019 = 100) EXHIBIT 30: Exports (volume index, Dec 2019 = 100)

Japan EM Africa and ME

140
Euro area other AEs
USA 130
EM EE/CIS
130 China EM LatAm
UK 120 EM Asia (x China)
120
110
110

100
100

90 90

80 80

70 70
Dec 18 Dec 19 Dec 20 Dec 21 Dec 22 Dec 23 Dec 24 Dec 18 Dec 19 Dec 20 Dec 21 Dec 22 Dec 23 Dec 24

Source: CPB, SG Cross Asset Research/Economics Source: CPB, SG Cross Asset Research/Economics

◼ The second is a softer dollar, which would be supportive for EM Asia assets. We observed
at the start of the equity section that the last time the US was in trade surplus was almost 50 years
ago (1976). As discussed by the SG FX Strategy team (most recently here), the consequence of
the US running persistent current account deficits while others run correspondingly high current
account surpluses is that global savings flow to the US. If the US rebalances its trade position, the
likely outcome is that the USD weakens.

The recent spike in the TWD, and appreciating moves in the KRW, SGD and MYR, may well signal
an end to the undervaluation of Asia FX. This would be good news for EM equities (of which Asia
represents 85% of market capitalization). Moves in the dollar index have historically been a useful
indicator of EM/DM equity allocation.

1 More specifically the last five and a half years. The reference point is 4Q19, the last quarter before the pandemic.

16 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

EXHIBIT 31: A decline in the dollar index favours emerging equities relative to developed
markets

180 MSCI World relative to MSCI EM DXY, RHS 120

160
110
140

100
120

100
90

80
80
60

40 70
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Source: SG Cross Asset Research/Equity Strategy, Bloomberg

How much impact could deglobalization have?

◼ The first point to note is that, obviously, equity indices do not reflect the economy2. China’s
monthly trade surplus has been averaging USD90bn over the last 12 months. But its stock market
does not include a lot of exporters.

◼ The second point is that the path (or even the reality) of deglobalization is not a key driver
of share-price trajectory. What matter more are: the shift in manufacturing capex (onshoring,
reshoring), national security imperatives being increasingly intertwined with trade and investment
decisions (sovereignty is becoming an investment theme), and the increase in non-tariff
restrictions (more specifically in relation to China).

EXHIBIT 32: Asia markets’ US exposure EXHIBIT 33: National security related trade concerns raised at
World Trade Organization (WTO) committees

30% 12

25%
10
20%
8
15%
6
10%

5% 4

0% 2

Source: SG Cross Asset Research/Equity Strategy, Refinitiv, Worldscope Source: SG Cross Asset Research/Strategy, WTO

Deglobalization is not a new phenomenon. In recent years, the SG Asia Equity Strategy team has
created thematic baskets to gain exposure to this shift.

− The SG India Manufacturing Basket (SGINMGF), created on 9 March 2023, tracks the
performance of 30 domestic stocks aligned to the Production-Linked Incentive (PLI) scheme and
the capex cycle recovery.

2 At best, an equity index can reflect the universe of all listed stocks in that market.

DEGLOBALIZATION 17
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

− The SG Asia Trade Basket (SGASTRD), created on 5 Sept. 2024, tracks the performance
of Asia-listed stocks that are positively exposed to shifting trends in global exports and
investments. It focuses on three types of names: Chinese stocks expanding in emerging
economies, the beneficiaries of DM/China decoupling in selected industries, and the
beneficiaries of the China+1 strategy (in India).

EXHIBIT 34: SG India Manufacturing Basket (SGINMGF) since EXHIBIT 35: SG Asia Trade Basket (SGASTRD) since
inception: return relative to NIFTY inception: return relative to MSCI Asia

220 130
SG India Manufacturing basket Nifty SG Asia Trade Basket MSCI Asia
200 125
120
180
115
160 110
140 105

120 100
95
100
90
80 85

Source: SG Cross Asset Research/Equity Strategy, Bloomberg. Historical returns prior Source: SG Cross Asset Research/Equity Strategy, Bloomberg. Historical returns prior
to inception on 9 March 2023 are backtracked. to inception on 5 September 2024 are backtracked.

In our work, we use Bernstein’s research on deglobalization to help identify stocks that benefit
from manufacturing capex shifts, new trade patterns, and fracturing geopolitics. Some stocks
stand to benefit in such a context (‘the Leaders’), while others are likely to lose out (‘the Laggards’).

The Leaders…
The stocks that may benefit from these trends are split into four categories.
◼ Capex – This first category stands to benefit from an increase in manufacturing capex. The
global value chain reshuffling is more visible in investment flows than in trade. In Asia,
manufacturing FDIs have been falling in China while rising elsewhere. Even before “Liberation
Day”, Japan, a significant investor in the region, had been redirecting investment away from China
and towards India, and other regions. Fracturing geopolitics has been a reason for this.

EXHIBIT 36: The global value chain EXHIBIT 37: Increase in Japan’s outward EXHIBIT 38: Reasons for scaling back
reshuffling is more visible in investment FDIs by country/region (net, flows, in %) business in China, or withdrawing from
flows than in trade – Manufacturing FDI it (multiple responses) – Companies
(4q rolling sum, USDbn) fearing increased geopolitical risks in
China
Indonesia 30% Low growth potential of local markets
30 Malaysia 160
Vietnam 20% Relationship with business partners
India 140
25 China (rhs) Increased risk of supply chain disruptions…
120 10%
Intensifying competition
20
100 0% Increased relative importance of…
15 80 Review of production, procurement and…
-10%
60 Declining demand in local markets
10 -20%
Impact of trade restrictions (inc. export…
40
5 -30% Impact of Chinese regulations
20
Decrease in cost advantage
-40%
0 0 Increased geopolitical risk
China ASEAN India US Latin Europe World
America 0 20 40 60

Source: CEIC, SG Cross Asset Research/Economics Source: SG Cross Asset Research/Equity Strategy, Source: SG Cross Asset Research/Equity Strategy,
Jetro Jetro

The other side of the value-chain reshuffling story is the rise of onshoring. In some places it causes
manufacturing capex to rise. The economics section of this report lays out two scenarios, one
where China’s supply chain continues to play a role in US demand, and one where it does not. In
both cases, there could be some acceleration of the China+1 strategy. Potential beneficiaries

18 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

include the Indian manufacturing sector, but also some Korean battery makers, potentially gaining
market share from a US/China decoupling in batteries.

◼ Sovereignty – The second category is likely to gain from import substitution, “local for
local” or indigenization of local production. For simplicity’s sake, we will call this category
“sovereignty”. National security and global trade have become increasingly intertwined. As seen
above, data from the WTO show that trade concerns relating to national security have tended to
increase since the first tariff war.

◼In China, US export controls since 2017 have forced the semiconductor industry to “de-
Americanize”, which has led to some import substitution to the benefit of local Chinese players. In
AI Servers, China is developing its own supply chain. This segment includes several Chinese
foundries and semicap manufacturers.

◼High local content – The third category consists of global firms with existing
manufacturing facilities in the US. In a high-tariff world, such companies may gain a cost-
structure advantage. Broadly speaking, that has been the case for the Japanese corporate sector
— where the foreign production ratio has increased (see charts below). Unlike in the 1980s 3, the
country currently has a significant direct investment position in the US (USD750bn). Prime Minister
Ishiba has pledged a significant increase to USD1tn.

EXHIBIT 39: Japanese companies’ revenue from local EXHIBIT 40: Japanese companies are increasing direct
subsidiaries has increased while their exports value has investment to the US, while their investment in China is
remained flat – We estimate that more than 80% of revenue decreasing
of the Topix Transportation Equipment sector from the US
is from foreign subsidiaries

Exports (JPYtn)
(USDbn, 4QMA)
120 Revenue from local subsidiary 12

US
100 10
China
80 8

60 6

40
4

20
2
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Source: SG Cross Asset Research/Equity Strategy, METI, MoF Source: SG Cross Asset Research/Equity Strategy, MoF

◼ Other – The fourth category comprises potential beneficiaries that we are not able to
classify in the other three categories. One of the concepts that is relevant here is “geopolitical
distance”. McKinsey Global Institute (MGI) calculates a “geopolitical distance” between countries
by using voting in the UN General Assembly. According to MGI, nearly 20% of the global goods
trade is between geopolitically distant economies (2021 figures).
For highly concentrated products such as smartphones, the percentage reaches 39%. One likely
implication of “Liberation Day” is a decrease in this number. Japanese semicap manufacturers,
which are selling in the US and in China (no export controls), may be at a “good” geopolitical
distance.

3 When previous trade and currency agreements between the US and Japan were signed. These involved voluntary
quotas, an agreement to appreciate the yen, and some non-tariff easing measures.

DEGLOBALIZATION 19
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

EXHIBIT
Nearly 41:
20%Nearly 20% of global
of global tradetrade is between
is between
geopolitically
geopoliticallydistant economies
distant economies

The geopolitical distance is calculated by MGI using voting in the UN

General Assembly. 0 means geopolitical closeness, 10 means the
4 countries are far away from a geopolitical viewpoint. For illustration, MGI
estimates that the geopolitical distance between China and Russia is in a
17% 0-1 range, and that between China and the US in a 9-10 range.
2

0
0 1 2 3 4 5 6 7 8 9 10

Source: WTO, 2023 World Trade Report, McKinsey Global Institute, SG Cross Source: SG Cross Asset Research/Equity Strategy, MoF
The geopolitical
Asset Research/Equity distance
Strategy; is calculated
(*) Blocs are bytoMc
defined according Kinseyin
dissimilarity
voting Global Institute
in the United (MGI) Assembly
Nations General using voting in the UN General
Assembly. 0 means geopolitical closeness, 10 means
the countries are far away from a geopolitical
viewpoint. For illustration, MGI estimates that the
geopolitical distance between China and Russia is in
… and the Laggards
a [0,1], between China and the US in a [9,10] range.

Similarly, we split the stocks that stand to lose from the deglobalization into four categories:

◼ Efficiency loss. The reshuffling of the global supply chain — more manufacturing in the US,
and possibly less in China — causes operating margins at some companies to shrink. Sectors
with complex supply chains, including electronics and automobile, are more vulnerable in this
phase of tariff uncertainty.

◼Additional competitive pressure. Chinese companies are set to lose market share in the US.
Chinese demand is also slowing, for instance in factory automation and machinery. Japanese
machinery and automation companies have not only been increasing investment in the US, but
also, more aggressively, in Europe.

◼ Fall in exports. This category includes names that could be hit by higher tariffs. These are, for
example, exporters to the US (with revenues from local production low compared to revenues
generated abroad), but also some services companies such as marine shipping firms and India IT
services firms (significant exposure to the US and dependence on working visas).

◼ Other. In the case of Asia, names in this category are mainly at risk of non-tariff restrictions
aimed at Chinese companies or non-Chinese companies selling to China. These restrictions
include a wide array of measures: data sanctions (restricting Chinese biopharma access to
databases), export controls (in semiconductors, and technology), and US restrictions on capital
flows to China’s corporate sector.

On this last point, we have looked at the implications of potential delistings of Chinese companies
listed in the US, following the publication of the America First Investment Policy document. In
the case of forced delistings, as happened in January 2021, we also observed some patterns of
share-price decline ahead of the delistings as well as of a sharp rebound on the HK market POS.
Other capital-flow restrictions could involve a complete divestment by certain categories of investor
(pension funds, US endowments) from Chinese equities. They could also involve broader
categories of investor in a narrower investment universe, e.g. one deemed to be linked to China’s
military. These issues have been covered in detail in questions 9 and 10 in an earlier SG Equity
Strategy report.

20 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Europe: at a turning point

Since the eurozone crisis, the European Union has maintained a consistent trade surplus, except
during the energy crisis when energy imports surged. The UK has recorded a small trade deficit,
while Switzerland has been running a trade surplus. The EU's main exports are machinery,
transport equipment, and pharmaceuticals, which have grown significantly since 2018. However,
the EU is a major importer of energy, making it vulnerable to trade wars, as retaliation on energy
harms industrial competitiveness. The ‘reciprocal’ tariffs introduced on April 2, known as
"Liberation Day," present a challenge for the EU, especially since the US has been a key source
of export growth. The threat of a 50% tariff raises the stakes and could lead to various outcomes,
from reduced tariffs overall to potential escalation of the trade war into services given that the EU
has been running a trade deficit on this front with the US (€109bn in 2023).

EXHIBIT 42: EU trade balance in goods by region (exports minus imports)

500
400
300
200
100
0
-100
-200
-300
-400 Net RoW Net US
-500
-600 Net China Net Total
-700
03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
12m trailing in €bn, Rest of the World excluding China and the US, Source: Eurostat, SG Cross Asset Research/Equity Strategy

In 2024, the EU recorded a €150bn trade surplus, but there were significant disparities between
regions: a €330bn net deficit with China, a €200bn net surplus with the US, and a €280bn net
surplus with the rest of the world. However, what is particularly concerning is that the disparity
between the US and China in terms of EU trade has continued to widen, especially with exports
to China being almost flat since 2019.

EXHIBIT 43: EU trade in goods with the US EXHIBIT 44: EU trade in goods with China
700 700 700 700
Exports to the US Exports to China
600 600 600 600
Imports from the US Imports from China
500 500 500 500

400 400 400 400

300 300 300 300

200 200 200 200

100 100 100 100

0 0 0 0
03 05 07 09 11 13 15 17 19 21 23 25 03 05 07 09 11 13 15 17 19 21 23 25

Last 12 months in €bn, Source: Eurostats, SG Cross Asset Research/ Equity Strategy

DEGLOBALIZATION 21
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

The US$ great rotation: favor defensive and financials sectors

The US economy contributes significantly to the STOXX Europe 600, ranking first in terms of
country exposure and accounting for c.23% of the index companies’ sales. The strength of the US
economy and the US dollar have clearly supported European equities, hence a rotation away from
the dollar represents a headwind. However, the relationship between the euro currency and the
STOXX 600 is not straightforward. We calculated that a 10% depreciation in the USD (all else
equal), could cut European earnings by 4% (see link), but the euro often appreciates when the
Eurozone economy is improving. For instance, in 2017, the STOXX 600 EPS grew by 14% yoy,
despite the euro appreciating 15% against the USD. Also, we tend to observe a positive correlation
between the exchange rate and valuation, as the equity risk premium usually declines during
economic recoveries.

EXHIBIT 45: STOXX 600 EPS growth and EUR/USD (yoy) EXHIBIT 46: STOXX 600 fwd P/E and EUR/USD

80% -40% 20 1.3

STOXX 600 - EPS growth (yoy) 19
STOXX 600 fwd P/E - lhs
60% -30% 1.25
18
40% -20% 17 1.2
16
EUR/USD - rhs
20% -10% 15 1.15

0% 0% 14 1.1
13
-20% 10% 12 1.05
11
-40% 20% 1
EUR/USD (yoy) - inverted rhs 10
-60% 30% 9 0.95
09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 15 16 17 18 19 20 21 22 23 24 25 26

Source: Datastream, IBES, SG Cross Asset Research/Equity Strategy Source: Datastream, IBES, SG Cross Asset Research/Equity Strategy

While a stronger euro may negatively impact earnings, it could positively influence valuations,
particularly if the appreciation is associated with lower energy prices or a ceasefire in Ukraine. As
a result, European equities could still perform well despite euro appreciation, presenting an
attractive investment opportunity for US investors. We recommend focusing on sectors with
high domestic exposure, such as Utilities and Banks, both of which we highlighted in the SG
2Q25 European Equity Outlook. We also see an attractive entry point into the Pharmaceuticals
sector.

EXHIBIT 47: STOXX 600: sectors’ geographical sales exposure

Europe US Rest of Americas China Rest of Asia Pacific RoW

100%

80%

60%

40%

20%

0%

Source: Factset, SG Cross Asset Research/Equity Strategy

22 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Overall, our sector allocation reflects the view that: i/ tariffs will remain higher than before Trump’s
election in 2024, but will not trigger a recession; and ii/ European cyclical sectors are already
pricing-in a lot of good news, too much in our view. In our cyclical / defensive approach we exclude
the Financials and Oil & Gas sectors, as their performance has been driven more by rates and oil
prices than by economic activity. Following the recent rally after the US-China tariff retreat,
cyclicals are trading at a forward P/E of 19.1x, compared to 14.4x for defensives, a 32% premium
– higher than during the Covid crisis. In addition to our preference for defensives, we also
favour Financials, particularly Banks. Interestingly, both defensive sectors and Financials have
strong domestic sales exposure, providing a hedge against tariff-related risks.

EXHIBIT 48: Cyclicals vs. defensives pricing in a higher EXHIBIT 49: Cyclicals vs. defensives relative fwd P/E is at a
Manufacturing PMI decade high

99 00 01 02 04 05 06 07 09 10 11 12 14 15 16 17 19 20 21 22 24 25
60% Cyclicals relative to Defensives (yoy) 70 1.5 1.5
Manufacturing PMI, RHS 1.4 1.4
65
40%
1.3 1.3
60
20% 1.2 1.2
55
1.1 1.1
0% 50 average
1 1
45 0.9 0.9
-20%
40 0.8 0.8
-40% 0.7 0.7
35
0.6 0.6
-60% 30
06 08 10 12 14 16 18 20 22 24
99 01 03 05 07 09 11 13 15 17 19 21 23 25

Source: MSCI, Datastream, Markit, SG Cross Asset Research/Equity Strategy. Weekly performance in total return in euros weighted by sector market capitalisation, 12-month
forward P/E based on market cap. Aggregates, Cyclical MSCI sectors: Basic Resources, Industrials, Consumer Discretionary and IT. Defensive MSCI sectors: Consumer
Staples, Health Care, Telecom and Utilities

Another asset class that tends to do relatively well when the USD is weakening is Eurozone Small
Caps. Given their stronger domestic sales exposure (see details) they are less at risk from tariffs.
However, they are also heavily weighted towards industrials, making them more cyclical compared
to large caps. For the moment, we keep our Neutral stance on the asset class, as our favourite
indicator (M1 money supply growth) is currently giving us a neutral signal on Eurozone Small
Caps. We upgraded Eurozone Small Caps to Neutral relative to Large Caps nearly a year ago,
and since then, their performance has been in line with Large Caps (both up 9.6% yoy) after years
of underperformance.

EXHIBIT 50: EMU Small Caps relative performance to Large EXHIBIT 51: Monetary supply growth matters for Small Caps
Caps, and EUR/USD

Eurozone yy yy yy yyMSCI
yy yy EMU
yy yy Small
yy yy yy
vsyy yy yy(yoy
Large yy yy yy yy yy yy yy yy yy yy yy
change)
120 Small relative to Large 1.3 40% 30%
Eurozone money supply M1 adj. from nominal GDP
(yoy change, RHS) - 6M lead 25%
115 1.25 30%
20%
110 1.2
20% 15%
105 1.15
10%
10%
100 1.1 5%
0%
95 1.05 0%

-10% -5%
90 1
EUR/USD, rhs -10%
85 0.95 -20%
-15%
80 0.9
-30% -20%
16 17 18 19 20 21 22 23 24 25
02 04 06 08 10 12 14 16 18 20 22 24 26

Base 100: 01/01/2016, performance in total return in euro, Source: MSCI, Datastream, Yearly relative performance in net total return in euros, Source: MSCI, Datastream, SG
SG Cross Asset Research/Equity Strategy Cross Asset Research/Equity Strategy

DEGLOBALIZATION 23
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

The Leaders…
The stocks that stand to benefit from these trends (‘the Leaders’), we split into four categories.
◼ Capex – Europe has tended to run a trade surplus, but the energy crisis, rising Chinese
competition and US tariffs are seriously denting this model. While most European nations face
similar challenges, they lack the fiscal capacity of Germany, which has announced a €500bn
investment fund spread over 12 years. The plan includes a substantial increase in public spending,
particularly in defence and infrastructure. The country faces challenges, such as an energy crisis
due to reliance on Russian gas, rising energy prices, demographic issues, and US tariffs. Stocks
related to automation, electrification, energy infrastructure, and defence should do well in such an
environment.
EXHIBIT 52: 2025 ytd performance: Germany is leading the EXHIBIT 53: European vs. US gas prices: the need to invest in
pack ex Financials energy infrastructure
20% 19
18% 10
16% 9
14% 12 8
12% 10 7
10%
8% 7 6 6
average after 2021: 5x
6% 4 5
4% 4
2%
3
0%
2
1
average before 2021: 2x
0
15 16 17 18 19 20 21 22 23 24 25

Source: Bloomberg, SG Cross Asset Research/Equity Strategy Source: Bloomberg, SG Cross Asset Research/Equity Strategy

◼ Sovereignty – Europe is at a pivotal moment, as recent crises – the COVID-19 pandemic, the
energy crisis, and the invasion of Ukraine – have revealed the continent's vulnerabilities. In
response, the EU is advancing on multiple fronts: 1/ the ReArm plan, the aim of which is to reduce
dependency on the US for defence and security; 2/ the REPowerEU plan, which focuses on
decreasing reliance on Russian gas; and 3/ the European Chips Act, which targets a doubling of
the EU’s share of global semiconductor production to 20% by 2030, a crucial sector for
technologies such as AI, EVs, and Cloud. The SG European Sovereignty Basket (SGIXEUSV),
launched in March 2025, includes 50 pan-European stocks poised to benefit from the continent's
push for strategic autonomy. This index emphasizes ten key strategic sectors, with weights
reflecting the urgency of each issue.

EXHIBIT 54: Europe: Energy supply insecurity index (from EXHIBIT 55: SG European Sovereignty Basket relative
IMF) performance

170 170

160 160

150 SG European Sovereignty Basket 150

relative to STOXX 600 ex Financials
140 140

130 130

120 120

110 110

100 100

90 90
20 21 22 23 24 25
1=100 percent; higher score = less energy secure. Source: Eurostat and IMF staff Historical returns prior to inception on 1 April 2025 are backtracked.
calculations. Notes: the chart shows the composite energy supply insecurity index of Base 100: 01/01/2020, Performance in total return in euro. Source: Datastream,
Cohen, Joutz, and Loungani (2011), which combines energy import dependence with Bloomberg, SG Cross Asset Research/Equity Strategy
energy import diversification. The index is modified to give European countries zero
risk-weight and other countries unit risk-weight.

24 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

◼ High local content – European stocks with substantial US exposure have been outperforming
the market (see the SG Yankee Basket below). However, increasing tariffs could disrupt this trend,
with a distinction between goods and services, as well as exports versus local exposure (via
subsidiaries). Deutsche Telekom is a good example as it holds nearly 52% of T-Mobile. The stock
has significantly benefited from its exposure to the US market, which has been a strong contributor
to revenue growth; however, potential changes to section 899 of the US tax code could represent
a headwind for these names.

EXHIBIT 56: European stocks with a high US exposure have EXHIBIT 57: Deutsche Telecom revenues rose in the US, but
outperformed were flat elsewhere

180 180 90,000

SG Yankee Basket United States
relative to STOXX 600
80,000 RoW
160 160
70,000
140 140
60,000

120 120 50,000

40,000
100 100
S&P 500 relative to STOXX 600
30,000

80 80 20,000
15 16 17 18 19 20 21 22 23 24 25 17 18 19 20 21 22 23 24

SG European Yankee Basket (SGEURUSA) is composed of European stocks with Source: Bloomberg, SG Cross Asset Research/SG Equity Strategy
significant US exposure. Base 100: 01/01/2015, performance in total return in local
currency. Past performance is not indicative of future performance. Source: SG Cross
Asset Research/Equity Strategy

◼ Other – The fourth category comprises potential beneficiaries of deglobalization that we are not
able to classify in the other three categories. Some companies in this category could benefit from
the increasing complexity of supply chains. The shift towards a "China+1" strategy in global
sourcing is restructuring supply chains and requiring more logistics services, and some European
firms are well positioned to capitalize on this trend. In a 3 April European Logistics report, Alex
Irving from Bernstein notes that companies are transitioning from a cost-minimization approach
to their supply chains to a risk-managed one, sourcing freight from a wider array of countries. This
shift necessitates greater logistics support, making the industry more profitable than in the 2010s.
In a 7 April EU Business Services report, Will Kirkness from Bernstein adds that changes in
processes and locations lead to incremental testing, benefiting European Business Services,
particularly in the Testing, Inspection, and Certification sector.

EXHIBIT 59: Companies are expected to reduce their

EXHIBIT 58: The distance traveled for goods trade continues
dependency on China by as much as 35% and divert sourcing
to progress
to 'Other Asia' countries, such as India and Vietnam

Average distance in km of international trade, Source: DHL Global Connectedness October 2023 survey of European executives, Source: Alix Partners, Bernstein
Tracker, Bernstein analysis (extracted from 3 April 2025 European Logistics report) analysis
(extracted from 7 April 2025 EU Business Services report)

DEGLOBALIZATION 25
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

… and the Laggards

Similarly, we split the companies that are likely to lose out from deglobalization into four categories:
◼ Efficiency loss – The reshuffling of global supply chains is set to impose additional constraints
on European automakers. Meanwhile, the European retail sector is encountering heightened risks
due to limited outsourcing options in countries with lower labor costs than China or Bangladesh.
European luxury brands, already facing pressure, may see their profitability come under further
pressure if they attempt to mitigate tariffs by relocating production closer to their primary markets.

EXHIBIT 60: European brands produce mostly in Asia EXHIBIT 61: European Durables, Apparel & Luxury: realised
profit margin

16% 16%

14% 14%

12% 12%

10% 10%

8% 8%

6% 6%

4% 4%
04 06 08 10 12 14 16 18 20 22 24

Source: Company reports, Bernstein analysis (extracted from 14 April 2025 US & Based on 12m trailing data. Source: Datastream, MSCI, IBES, SG Cross Asset
Europe Apparel report) Research/Equity Strategy

◼ Additional competitive pressure – One concern is that European companies may be

vulnerable to an influx of Chinese goods. However, the already high degree of similarity between
imports from China in Europe and the US suggests that the impact on European companies should
be limited. We have published a detailed report on this topic titled " Trade War: Assessing the
impact for Europe of the US-China tariff war“. Furthermore, new opportunities could emerge for
EU companies in both the US and Chinese markets. But competition in China is already
intensifying, particularly from local competitors – this dynamic is affecting certain European
automakers and semiconductor companies.

EXHIBIT 62: EU automotive trade with China

The trade balance on Automotive

40
has recently turned from a surplus Import from China
to a deficit for the EU relative to 35
China. Export to China
30

25

20

15

10

0
12 13 14 15 16 17 18 19 20 21 22 23 24 25

Last 12 months in €bn. Source: Eurostats, SG Cross Asset Research/Equity Strategy & Economics

26 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

◼ Fall in exports – European Luxury names may also be affected if they do not relocate their
production. Although they possess some pricing power to mitigate the impact of US tariffs, they
face the risk of further economic slowdown in China. And on top of weaker profitability, the sector
has seen revenues stagnating over the last two years. In a deglobalized environment, beverage
companies could also experience pressure. In a 10 April Global Spirits report, Nadine Sarwat
and Trevor Stirling from Bernstein, highlight that Protected Geographical Indications (PGIs) may
become a liability: “Distillers have no flexibility to meaningfully adapt supply chains or hubs of
production. This exposes them to the risk that comes with tariff wars.”

EXHIBIT 63: Global Luxury Goods - market size breakdown by EXHIBIT 64: Δ in Global Spirit sales ($bn)
nationality

Source: Altagamma, Bernstein analysis (extracted from 24 March 2025 Luxury Goods The study sample used for PGI spirits is the spirits names from Bernstein global
report) beverages coverage: Brown-Forman, Campari, Cuervo, Diageo, Pernod Ricard and
Remy Cointreau. We simplify our definition of PGI by taking into account the six main
types of PGIs spirits: US Whiskey, Canadian Whisky, Scotch Whisky, Irish Whiskey,
Tequilla, Cognac/Armagnac. Source: IWSR, Bernstein analysis (extracted from 10
April 2025 American & European Alcoholic Beverages report)

◼ Other – In the case of Europe, Bernstein analysis highlights that advertising is a sector likely to
suffer collateral damage from US tariffs: “The automotive sector, worth >$50bn in media spend, is
particularly sensitive to recent tariff shifts. Consequently, we expect auto TV advertising – a key
channel for auto brands – to feel the most significant impacts.” – see Bernstein’s 1 April European
Media report from Annick Maas, Christophe Cherblanc, and Simon Baker. In a 22 April note,
they also highlight that B2B Events "is by far the most exposed” segment to deglobalisation.

DEGLOBALIZATION 27
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

SG New Global Trade Order Leaders and

Laggards Baskets
As laid out in the framework section, we apply a top-down framework to identify potential leaders
and laggards in each region according to the relevant theme. The drivers for finding the leaders
and laggards vary by region. For instance, the US is focusing on re-shoring strategic industries,
Asia is set to see ‘geopolitical distance’ become increasingly important, and Europe finds itself in
a challenging situation, given its substantial trade surplus with the US and its deficit with China.
These top-down elements underpin the selection of the 65 stocks in our SG New Global Trade
Order Leaders basket and the 40 stocks in our SG New Global Trade Order Laggards basket.

Leaders

US Leaders: The selection of the stocks is based on industries and sectors that are likely to benefit
from their exposure to a higher-tariff regime. The US is prioritizing the on/reshoring of strategic
sectors that are critical for supply chains, mostly advanced manufacturing – namely Defense, Tech
(semiconductors/AI), and Autonomous vehicles/transport. The stocks we have selected are mostly
in the Industrials, Materials and Tech sectors.

Asia Leaders: The selection has a majority of Japanese and Chinese companies. Several
Japanese corporates are likely to benefit from “geopolitical distance”, a localized supply chain or
the service nature of their businesses. For China, the inclusion is mostly due to the sovereignty
element or the likely benefit from additional capex. Semiconductor and Technology Hardware
stocks dominate the list.

Europe Leaders: The selection includes companies categorized under 'sovereignty', as recent
crises have exposed the continent’s vulnerabilities. Additionally, numerous companies fall within
the 'Capex' category, particularly those poised to benefit from the re-shoring and on-shoring of
activities and advancements in automation. The restructuring of supply chains presents further
opportunities for various European companies. Industrial names and German-listed stocks
dominate the list.

Laggards

US Laggards: The basket’s Laggards comprise stocks that are likely to lose out from
deglobalization. This may be because of low domestic exposure (both in terms of revenue and
supply chain), a loss of efficiency and profitability due to a reshuffling of global supply chains, or
additional competitive pressure. The selection is mostly composed of consumer stocks (Staples
and Discretionary) and Tech.

Asia Laggards: Stocks with a significant revenue source from the US (automakers from Japan
& Korea, home appliance manufacturers from China) are set to lose out from the higher tariffs.
Shipping firms are also expected to suffer from lower trade volumes. In addition, non-China
semiconductor stocks would start to be negatively affected as China expands capex for domestic
manufacturing.

Europe Laggards: The selection comprises companies with significant international sales
exposure and local production, notably Luxury brands, Automakers and Pharma. Beverage
companies could fit well in this category, but are not included in our selection due to trading liquidity
constraints. Also, some semiconductor firms may face pressure from increased competition,
notably in China.

28 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

SG New Global Trade Order Leaders: Performance & Valuation

SG New Global Trade Order Leaders Basket is up 14.5% since the beginning of the year,
outperforming the MSCI AC World, which is up 7.7% (both in USD). Over the last two years, the
relative performance has been ranged bound, but we have observed a strong acceleration in
performance since the election of Trump. Interestingly, since 1 April the basket has outperformed
the MSCI AC World by 2.9%.

EXHIBIT 65: SG New Global Trade Order Leaders Basket: EXHIBIT 66: Relative performance
performance

180 180 110 SG New Global Trade Order Leaders 110

SG New Global Trade Order Leaders Basket relative performance to MSCI AC World
108 108
160 160
106 106
MSCI AC World
140 140 104 104

120 120 102 102

100 100
100 MSCI AC World equal weighted 100
98 98

80 80 96 96
Jan-23 Jan-24 Jan-25 Jan-23 Jan-24 Jan-25

Base 100: 01/01/2023. Ex-post performance of current constituents rebalanced on a monthly basis excluding stocks with a market capitalisation below $1bn, past performance is
not indicative of future performance. Performance in total return in USD excluding fees. Source: Datastream, SG Cross Asset Research/Equity Strategy

On the valuation front, the SG New Global Trade Order Leaders Basket is trading on a fwd P/E
of 21.7x, which is slightly above its two-year average (20.9x). On the relative front, it is trading at
a 18% premium to the MSCI AC World (18.4x), which is below its two-year average relative
premium of 23%.

EXHIBIT 67: SG New Global Trade Order Leaders Basket: 12m EXHIBIT 68: Relative fwd P/E
fwd P/E

24 SG New Global Trade Order Leaders Basket 24 1.45 1.45

SG New Global Trade Order Leaders Basket
relative to MSCI AC World
1.4 1.4
22 22
1.35 1.35
20 20
1.3 1.3

18 18 1.25 1.25

1.2 1.2
16 16
1.15 1.15
14 14
1.1 1.1
MSCI AC World
12 12 1.05 1.05
Jan-23 Jan-24 Jan-25 Jan-23 Jan-24 Jan-25

Basket fwd P/E is equi-weighted. Source: Datastream, SG Cross Asset Research/Equity Strategy

DEGLOBALIZATION 29
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

SG New Global Trade Order Laggards: Performance and Valuations

SG New Global Trade Order Laggards Basket is up 2.4% since the beginning of the year, so
underperforming both our Leaders basket and the MSCI AC World (respectively up 14.5% and
7.7% ytd). The basket has remained mostly flat since mid-2024 and the rise of Trump in the polls,
underperforming the MSCI AC World by a further -1.7% since 1 April 2025.

EXHIBIT 69: SG New Global Trade Order Laggards Basket: EXHIBIT 70: Relative performance
performance

160 SG New Global Trade Order Laggards Basket 160 115 115
SG New Global Trade Order Laggards relative
150 150 110 performance to MSCI AC World 110
MSCI AC World
140 140 105 105

130 130 100 100

120 120 95 95

110 110 90 90

100 MSCI AC World equal weighted 100 85 85

90 90 80 80
Jan-23 Jan-24 Jan-25 Jan-23 Jan-24 Jan-25

Base 100: 01/01/2023, Ex-post performance of current constituents rebalanced on a monthly basis excluding stocks with a market capitalisation below 1 $bn, past performance
is not indicative of future performance, Performance in total return in USD excluding fees, Source: Datastream, SG Cross Asset Research/Equity Strategy

On the valuation front, the SG New Global Trade Order Laggards Basket is trading on a fwd P/E
of 11.4x, which is in line with its two-year average. On the relative front, it is trading at a 38%
discount to the MSCI AC World (18.4x), which is below its two-year average relative discount of
33%.

EXHIBIT 71: SG New Global Trade Order Laggards Basket: 12m EXHIBIT 72: Relative fwd P/E
fwd P/E

22 22 SG New Global Trade Order Laggards Basket

0.8 0.8
MSCI AC World relative to MSCI AC World
20 20
0.75 0.75
18 18

16 16 0.7 0.7

14 14 0.65 0.65
12 12
0.6 0.6
10 10
0.55 0.55
8 SG New Global Trade Order Laggards Basket 8

6 6 0.5 0.5
Jan-23 Jan-24 Jan-25 Jan-23 Jan-24 Jan-25

Basket fwd P/E is equi-weighted, Source: Datastream, SG Cross Asset Research/Equity Strategy

30 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

EXHIBIT 73: SG New Global Trade Order Leaders

Market cap. Country /
Ticker Name Industry Category
$bn Region
ORCL US Oracle Corp 494 US Software & Svs Sovereignty
LIN US Linde Plc 223 US Materials Capex / Sov. / US content / Geo. distance
CAT US Caterpillar Inc 169 US Capital Goods Capex
HON UW Honeywell International Inc 146 US Ind. Goods & Svs Capex / Sovereignty
PANW US Palo Alto Networks Inc 130 US Software & Svs High US local content
ETN US Eaton Corp Plc 126 US Capital Goods Capex
PLD US Prologis Inc 104 US Real Estate Capex
FTNT US Fortinet Inc 78 US Software & Svs Geo. distance / Most at risk from tariffs
APD US Air Products & Chemicals Inc 62 US Materials Capex / Sov. / US content / Geo. distance
NET US Cloudflare Inc - Class A 62 US Software & Svs Sovereignty / Geopolitical distance
FCX US Freeport-Mcmoran Inc 60 US Materials Capex / Sovereignty
PWR US Quanta Services Inc 51 US Capital Goods Capex
PCAR US Paccar Inc 50 US Capital Goods High US local content
ROST US Ross Stores Inc 46 US Cons. Discretionary Distrib. Sovereignty / Geopolitical distance
URI US United Rentals Inc 46 US Capital Goods Capex
VMC UN Vulcan Materials Co 35 US Construction & Mats Capex / High US local content
A US Agilent Technologies Inc 34 US Pharma. & Biotech. Capex
NUE US Nucor Corp 29 US Basic Resources Capex
DG US Dollar General Corp 25 US Cons. Staples Distrib. High US local content
WAT US Waters Corp 21 US Pharma. & Biotech. Capex
HUBB US Hubbell Inc 21 US Capital Goods Capex
TRMB US Trimble Inc 17 US Tech. Hardware & Eqt. Capex
DT US Dynatrace Inc 16 US Software & Svs Sovereignty
J US Jacobs Solutions Inc 15 US Commercial & Prof. Svs Capex
OSK US Oshkosh Corp 7 US Capital Goods Capex / High US local content
1211 HK BYD Co Ltd 153 China Automobiles & Comp. Sovereignty
7974 JT Nintendo 108 Japan Media & Entertainment Geopolitical distance
6861 JT Keyence Corp 101 Japan Tech. Hardware & Eqt. Geopolitical distance / Capex
8035 JT TEL 77 Japan Semiconductor & Eqt. Capex / Sovereignty
981 HK SMIC 54 China Semiconductor & Eqt. Capex / Sovereignty
373220 KP LG Energy Solution Ltd 49 Korea Capital Goods Sovereignty / High US local content
4568 JT Daiichi Sankyo Co Ltd 48 Japan Pharma. & Biotech. High US local content
6857 JT Advantest Corp 44 Japan Semiconductor & Eqt. Capex / Sovereignty
2020 HK Anta 35 China Cons. Durables & Apparel Sovereignty
2308 TT Delta Electronics Inc 35 Taiwan Tech. Hardware & Eqt. Capex
002371 C2 NAURA Technology Group Co Ltd 31 China Semiconductor & Eqt. Capex / Sovereignty
6954 JT FANUC Corp 26 Japan Capital Goods Geopolitical distance / Capex
6146 JT Disco Corp 25 Japan Semiconductor & Eqt. Capex / Sovereignty
300124 C2 Inovance 24 China Capital Goods Sovereignty
6273 JT SMC Corp 24 Japan Capital Goods Geopolitical distance / Capex
7269 JT Suzuki Motor Corp 23 Japan Automobiles & Comp. Geopolitical distance
9697 JT Capcom 16 Japan Media & Entertainment Geopolitical distance
688012 C1 AMEC 15 China Semiconductor & Eqt. Capex / Sovereignty
6920 JT Lastertec 10 Japan Semiconductor & Eqt. Capex / Sovereignty
006400 KP Samsung SDI Co Ltd 9 Korea Tech. Hardware & Eqt. Sovereignty / High US local content
7735 JT Screen 8 Japan Semiconductor & Eqt. Capex / Sovereignty
1590 TT AirTAC 6 Taiwan Capital Goods Sovereignty
688072 C1 Piotech Inc 6 China Semiconductor & Eqt. Capex / Sovereignty
2331 HK Li Ning 5 China Cons. Durables & Apparel Sovereignty
603605 C1 Proya 5 China Household & Personal ProductsSovereignty
SAP GY SAP 373 Germany Software & Svs Sovereignty / Geopolitical distance
ASML NA ASML 308 Netherlands Semiconductor & Eqt. Capex / Sovereignty
SHELL NA Shell 209 UK Energy Sovereignty
SIE GY Siemens 200 Germany Capital Goods Capex
SU FP Schneider Electric 150 France Capital Goods Capex
AI FP Air Liquide 121 France Materials Capex / Sov. / US content / Geo. distance
RHM GY Rheinmetall 87 Germany Capital Goods Sovereignty
ENR GY Siemens Energy 76 Germany Capital Goods Sovereignty
DSV DC DSV 60 Denmark Transportation Rising supply chain complexity
DB1 GY Deutsche Boerse 60 Germany Financial Svs Sovereignty
DNB NO DNB 41 Norway Banks Capex / Sovereignty
TEF SQ Telefonica 30 Spain Telecom. Svs Sovereignty
VIE FP Veolia Environment 26 France Utilities Capex
SGRO LN Segro 13 UK Real Estate Capex
ITRK LN Intertek 10 UK Commercial & Prof. Svs Capex / Rising supply chain complexity
Market capitalisation as of 10/06/2025. Source: SG Cross Asset Research/Equity Strategy

DEGLOBALIZATION 31
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

EXHIBIT 74: SG New Global Trade Order Laggards

Market cap. Country /
Ticker Name Industry Category
$bn Region
AAPL US Apple Inc 3025 US Tech. Hardware & Eqt. Most at risk from tariffs
AMZN US Amazon.Com Inc 2296 US Cons. Discretionary Distrib. Most at risk from tariffs
MCD US McDonald's Corp 215 US Consumer Svs Additional competitive pressure
SBUX US Starbucks Corp 103 US Consumer Svs Additional competitive pressure
PYPL US Paypal Holdings Inc 73 US Financial Svs Most at risk from tariffs
GM US GM 47 US Automobiles & Comp. Efficiency loss
TGT US Target Corp 46 US Cons. Staples Distrib. Efficiency loss
STZ US Constellation Brands Inc-A 30 US Food, Bev. & Tobacco Most at risk from tariffs
STLA US Stellantis 30 US Automobiles & Comp. Additional competitive pressure
CPAY US Corpay Inc 25 US Financial Svs Most at risk from tariffs
ZM US Zoom Communications Inc 24 US Software & Svs Other
DLTR US Dollar Tree Inc 20 US Cons. Staples Distrib. Efficiency loss
OKTA US Okta Inc 18 US Software & Svs Other
ILMN US Illumina Inc 14 US Pharma. & Biotech. Additional competitive pressure
BF/B US Brown-Forman Corp-Class B 13 US Food, Bev. & Tobacco Most at risk from tariffs
300750 C2 CATL 155 China Capital Goods Most at risk from tariffs
300 HK Midea Group Co Ltd 80 China Cons. Durables & Apparel Most at risk from tariffs
1919 HK COSCO SHIPPING Holdings Co Ltd 33 China Transportation Most at risk from tariffs
6690 HK Haier Smart Home Co Ltd 31 China Cons. Durables & Apparel Most at risk from tariffs
005380 KP Hyundai Motor Co 30 Korea Automobiles & Comp. Most at risk from tariffs
000270 KP Kia Corp 27 Korea Automobiles & Comp. Most at risk from tariffs
6723 JT Renesas 25 Japan Semiconductor & Eqt. Additional competitive pressure
2303 TT UMC 19 Taiwan Semiconductor & Eqt. Additional competitive pressure
2603 TT Evergreen Marine Corp Taiwan L 17 Taiwan Transportation Most at risk from tariffs
316HK Orient Overseas International 11 China Transportation Most at risk from tariffs
2615 TT Wan Hai Lines Ltd 9 Taiwan Transportation Most at risk from tariffs
2609 TT Yang Ming Marine Transport Cor 8 Taiwan Transportation Most at risk from tariffs
5347 TT Vanguard Semi 6 Taiwan Semiconductor & Eqt. Additional competitive pressure
7261 JT Mazda Motor Corp 4 Japan Automobiles & Comp. Most at risk from tariffs
MC FP LVMH 271 France Cons. Durables & Apparel Most at risk from tariffs
HSBA LN HSBC 207 UK Banks Most at risk from tariffs
IFX GY Infineon 55 Germany Semiconductor & Eqt. Additional competitive pressure
P911 GY Porsche 44 Germany Automobiles & Comp. Most at risk from tariffs
UCB BB UCB 37 Belgium Pharma. & Biotech. Most at risk from tariffs
MAERSKB DC AP Moller-Maersk 29 Denmark Transportation Most at risk from tariffs
STMPA FP STMicroelectronics 27 Switzerland Semiconductor & Eqt. Additional competitive pressure
HMB SS H&M 23 Sweden Cons. Discretionary Distrib. Efficiency loss
PNDORA DC Pandora 14 Denmark Cons. Durables & Apparel Most at risk from tariffs
UHR SE The Swatch Group 9 Switzerland Cons. Durables & Apparel Most at risk from tariffs
ELUXB SS Electrolux 2 Sweden Cons. Durables & Apparel Additional competitive pressure
Market capitalisation as of 10/06/2025. Source: SG Cross Asset Research/Equity Strategy

32 DEGLOBALIZATION
 COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Economics
Extract from Globalization – You Globalization – An (almost) irresistible force
can’t beat it, but you might
If deglobalization materializes, it will mark not a mere trend bending, but a drastic reversal of a
shape-shift it report published on
trend that has been in place for decades, and which has, if anything, shown signs of acceleration
28 May 2025
in recent years. Of course, this does not mean that deglobalization cannot happen in the future,
but it does mean that reversing the longstanding globalization trend would be difficult and costly.

There are two basic measures that are useful in assessing the trends in globalization. One is the
relative growth in international trade to global GDP growth, and the other is the more focused
measure of the ratio of international goods trade to global industrial production. And they paint
rather different pictures, for which there are several clear reasons.

Compared to GDP, growth in global trade has slowed a lot

The heyday of world trade growth is history, at least from today’s perspective. Since around the
time of the Great Financial Crisis (GFC), the gap between growth in GDP and in international trade
in goods and services has narrowed drastically (see chart below): in 1980-2008 it was on average
3pp (3% for GDP, 6% for trade); in 2013-2024, it was down to 0.3pp (2.7% for GDP, 3.0% for
trade). And even if we exclude the tumultuous years of 2020-22, when COVID triggered a collapse
and a subsequent rebound, the gap was still 0.45pp (2.9% for GDP, 3.4% for trade). In other
words, these data demonstrate clearly that the increase in trade intensity of GDP growth has
slowed, although trade growth has still increased, and certainly not declined. [Note, in this report
our analysis is based on global GDP at constant market FX rates, not on Purchasing Power
Parities].

More than one factor is likely at work, but the dominant one is the fact that as the world grows
more prosperous, the consumption of services in the overall economy grows faster than that of
goods. Services, although increasingly traded internationally, remain, by their nature, primarily
domestically produced, and remain a minor share of global trade: UNCTAT data, for example, puts
the share of services in global trade at 25%.

And so, turning to the question in hand, does the absolute and relative slowing of world trade
growth over the past 15 or so years suggest that globalization is going into reverse? Clearly not,
as it continues to outpace GDP growth, albeit by a much-reduced margin. But more importantly,
given that the narrowing of these growth differentials reflects long-running and structural shifts in
the composition of demand between goods and services, it is a poor guide to understanding trends
in globalization. Far more useful is to focus on the demand and supply of goods (see chart below).

EXHIBIT 75: World GDP and trade in goods and services (% EXHIBIT 76: World GDP and trade in goods (% yoy, 3yr avg.)
yoy, 3yr avg.)

GDP
GDP
9.0 World trade (G&S) 9.0
World trade (goods)
7.5 7.5

6.0 6.0

4.5
4.5
3.0
3.0
1.5
1.5
0.0
0.0
-1.5
-1.5 1992 1997 2002 2007 2012 2017 2022
1982 1987 1992 1997 2002 2007 2012 2017 2022
Source: IMF, SG Cross Asset Research/Economics Source: CPB, IMF, SG Cross Asset Research/Economics

DEGLOBALIZATION 33
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

In goods, globalization keeps intensifying, arguably accelerating

At first glance, when we compare growth in global GDP and world trade in just goods, the needle
tilts decisively towards a deglobalization scenario. This is because, since the early 2010s, goods
trade growth has substantially undershot GDP growth (see chart above). But this is wholly
misleading, for the reason mentioned above: the growing share of services in GDP.

A far better guide in our view, because it is unaffected by the changing split between goods and
services in GDP, is to examine world goods trade relative to global industrial production (excluding
construction). And as we have done for some time, we use the database provided by the CPB
Netherlands Bureau for Economic Policy Analysis (CPB).

First impressions can be deceiving…

When we examine the ratio of global goods trade to industrial production, we are faced with the
technical question of how to weight the individual economy inputs into the global aggregate. The
CPB offers two measures: one based on shares in global imports (which gives higher weights to
advanced economies, especially the euro area (EA)), and one based on shares in global
production. In this context, we prefer to focus on the latter.

What it indicates is that, after rising steeply following China’s effective accession to the WTO in
December 2001, globalization never fully recovered from the GFC shock in 2008/09, and then
began a gradual decline over the next five years or so, after which it flatlined for almost a decade
(see chart below). In other words, globalization peaked just before the GFC in 2008/09, and has
since stabilized after a period of decline, albeit a modest one.

More recent trends have been rather ambiguous: until the end of 2021, as global trade rebounded
from the collapse in 2020, globalization again intensified, reflected in a rising ratio. But from around
mid-2022 to mid-2023, the trend reversed quite sharply. Against the background of persistent trade
tensions between the US and China, with some intensification under the Biden administration, it
represented another warning flag for deglobalization. However, over the past half year, the ratio
has again trended slightly higher.

All told, the evidence from the CPB’s dataset indicates that globalization peaked in around 2008,
reversed some of the gains of 2004-08, and then broadly stalled for the past eight or so years

…and in this case, they are because of China’s defining impact

The global data are, unsurprisingly, heavily influenced by China, owing to both its large share in
global trade (at the start of 2025, standing at 17-18% of exports and 11-12% of imports), and the
rapidity of its gains. But there’s another angle, namely the importance of international trade for
China’s overall economy.

EXHIBIT 77: Ratio of global trade to industrial production EXHIBIT 78: China imports and exports to industrial
(indices) production (indices)

215
105 Exports
195
Imports
100
175
95
155

90
135

85 115
Import-weighted
80 Prod. weighted 95
12 per. Mov. Avg. (Import-weighted)
12 per. Mov. Avg. (Prod. weighted) 75
75
Jan- 01 Jan- 05 Jan- 09 Jan- 13 Jan- 17 Jan- 21 Jan- 25 2001 2005 2009 2013 2017 2021 2025

Source: CPB, SG Cross Asset Research/Economics Source: CPB, SG Cross Asset Research/Economics

34 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

It turns out that the ratio of China’s exports and imports to China’s industrial production peaked as
early as 2005/06, so not long after its accession to the WTO, having increased sharply in the
previous five years or so. Over the next decade, it declined precipitously, stabilizing at a level only
roughly half of its peak (see chart above). So, does this suggest China is pursuing a strategy of
deglobalization? We don’t think so.

The more convincing narrative, in our view, is this: the decline in the export-to-industrial production
ratio reflects the faster growth of China’s economy compared with the rest of the world, which
implies that a growing share of its production is being sold to domestic buyers. On the import side,
the declining ratio is, in our view, a direct consequence of China’s moves up the value-added
scale, with many goods previously imported now being produced domestically; think automobiles,
capital goods, electronics, etc. All this has little to do with deglobalization, although admittedly,
import-substitution is in play, which is a form of deglobalizing.

That said, developments over the past couple of years have slightly altered the broad picture.
China’s export-to-production ratio has trended modestly higher, while its import-to-production ratio
has dropped sharply. The former most likely reflects the slowing of China’s growth from around
7% p.a. to around 5% over the second half of the 2010s, thus narrowing the growth gap to the rest
of the world, and the latter the enormous strides China has made more recently in certain sectors
such as automobiles (EVs in particular) and electronics.

The upshot is this: while this evidence suggests that international trade, in other words the rest of
the world, has become less and less important to China, this by no means implies that China is
becoming less important to the rest of the world, as its continued gains in global export and import
shares illustrate (more on this below).

Ex China, globalization marches on, if anything, quickening

We have recalculated the ratio of global trade to industrial production excluding China, and this
presents an entirely different picture of globalization (see chart below). Instead of having peaked
just before the GFC and then declining, as suggested by the global data, excluding China reveals
that globalization has continued to increase. Indeed, starting in around late 2023, it shows clear
signs of accelerating.

Why does this matter? It matters in many ways, but in the context of this analysis and the current
debate, it illustrates that globalization is not primarily driven by China but is a much broader
phenomenon, involving many other economies and regions, which, we would argue, is not given
sufficient attention.

EXHIBIT 79: Ratio of global trade to industrial production (indices)

105

100

95

90

85

80
Global ex-China
75
Global
70
Jan-01 Jan-05 Jan-09 Jan-13 Jan-17 Jan-21 Jan-25

Source: CPB, SG Cross Asset Research/Economics

DEGLOBALIZATION 35
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

The shifting shape of globalization – not quite what you’d think

EXHIBIT 80: Changes in global trade The onward march of globalization has of course not been distributed equally across economies
shares 2024 from 2020 (pp)
and regions, creating winners and losers. In broad terms, EM economies have taken global trade
Exports
12
10 Imports shares from advanced economies (AE) – which is almost the definition of globalization. Everyone
8 agrees that China has been the runaway winner, boosting its share of global trade to the detriment
6
4 of most others, and, so the narrative goes, especially the US. All the evidence backs the first
2
0
assertion, but not the second.
-2
-4
-6
Based again on the CPB data on global trade, we calculated shares in global exports and imports
-8 (in volume terms) over time (see chart below). These fully support the perception of China having
grown its share in global exports over the past 25 years: it rose from 4.3% in 2000 to just over
Source: CPB, SG Cross Asset 17% in 2024, a 12pp+ increase.
Research/Economics

But the data do not support the narrative that this gain was primarily at the expense of the US.
Instead, the US’s share of global exports has been remarkably steady at 8-9% over the past
25 years. And the same is true for its share of global imports, which has fluctuated in a 11-14%
range – albeit with a recent surge to 16% powered by tariff frontrunning, which will almost certainly
unwind in the next few months.

The CPB data indicate that China’s gains – and those of other regions – were primarily at the
expense of the euro area (EA), the global export share of which dived 5½pp from 18% in 2001 to
12.5% in 2024. This was more than matched by its decline in import share, down 7pp from 19%
to 12% over the same period. [Note: the CPB data for the euro area include intra-EA exports and
imports, which drastically increase its share (almost two-fold), and drastically boost the declines
in its share. For this analysis, we believe a more appropriate measure is extra-EA trade, which we
have estimated using nominal data – it’s not perfect, but in our view a reasonable proxy.]

EM Asia (ex China) economies have also gained export market share, but the gains are modest
at about 3pp, though they represent a two-thirds increase. Yet, it is noteworthy that this group’s
import share rose by a larger margin of 5pp. This discrepancy likely reflects a rising share of import
content in exports (i.e. the influx of Chinese production facilities as well as above-average
domestic demand growth.

This is quite different from the experience of AEs in Asia ex Japan (Hong Kong, South Korea,
Singapore, Taiwan, often referred to as the Newly Industrialized Economies) whose share of
exports grew by 4pp, with the import share up by only 2pp. The growth of electronics hardware
demand is the prime driver here. Developments in Japan have not been hugely different, with the
share of global exports holding steady over the past 25 years, and that of imports easing
fractionally (1pp).

EXHIBIT 81: Shares in global exports (%) EXHIBIT 82: Shares in global imports (%)

18 20 CH US
EA EM Asia
16 18 AE Asia Latam

14 16
14
12
12
10
10
8
8
6 6
4 CH US EA 4
EM Asia AE Asia Latam 2
2
2000 2005 2010 2015 2020 2025 2000 2005 2010 2015 2020 2025

Source: CPB, SG Cross Asset Research/Economics Source: CPB, SG Cross Asset Research/Economics

36 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

While EM economies in Asia have been beneficiaries of globalization over the past 25 years, this
has not been replicated everywhere in the EM world. Latin America has managed to maintain its
share of global exports and imports almost perfectly but has made no inroads. And Africa and the
Middle East have lost export share by a sizeable 3pp (3.4pp unrounded), while their import share
has risen 1pp.

In short, in terms of participation in global trade, the past quarter-century has been Asia’s much
more than emerging economies’ more broadly. And Asia’s gains have been achieved primarily at
the expense of Europe (including, in spades, the UK).

Globalization patterns not a guide to deglobalization

Imagining what shape deglobalization might take in a framework of rational economic thinking is
terribly difficult, not least because it is such a bad idea.

EXHIBIT 83: US trade balance in Could the path of globalization perhaps be a guide to how its reversal will take shape? If it were,
goods and in services (USD bn)
400 it would suggest a sharp decline in China’s role, some more minor declines for EM Asia
200 economies, little change for the US, and a resurgence of Europe. That doesn’t sound particularly
0 convincing.
-200

-400 Nevertheless, the fact that the US share in global trade has been steady over the past 25 years
-600
argues against the idea that a ‘fight back’ – i.e. a tariff war - could produce substantial benefits.
-800
And that’s ignoring the fact that the US economy is effectively at full employment, suggesting that
-1,000 Goods
Services labor supply would cap – though not completely block – efforts to re-shore goods production.
-1,200
2015 2017 2019 2021 2023

Source: US Census Bureau, LSEG, SG Arguably, a better way to narrow the US trade deficit would be to focus on services, where the US
Cross Asset Research/Economics
has clear strengths and a substantial surplus (see margin chart). Global trade in services is
growing much faster than in goods and offers many future opportunities. This, in our view, would
be a more promising path for the US than an attempt to reverse economic history.

Tariffs may shape-shift globalization, but they won’t kill it

It is impossible to predict with any confidence what the US, and by extension the global, tariff
regime will look like, given the erratic policymaking of the Trump administration. But, in light of
economic fundamentals and history, it is in our view far more likely to lead to shifts in the
geographical composition of trade flows rather than a reversal of globalization per se.

EXHIBIT 84: Change of share in global exports (pp, 3yr avg) EXHIBIT 85: Change of share in global imports (pp, 3yr avg)

CH US CH US
3.5
EA EM Asia EA EM Asia
AE Asia Latam 2.0 AE Asia Latam
2.5

1.0
1.5

0.0
0.5

-0.5 -1.0

-1.5 -2.0
2006 2009 2012 2015 2018 2021 2024 2006 2010 2014 2018 2022
Source: CPB, SG Cross Asset Research/Economics Source: CPB, SG Cross Asset Research/Economics

DEGLOBALIZATION 37
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

◼
BERNSTEIN

38 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Deglobalization: It’s A Big World, After All

The modern era of globalization may have begun with the fall of the Berlin Wall in November 1989,
the Marrakesh Agreement creating the World Trade Organization in April 1994, or the Friends pilot
(“The One Where Monica Gets A Roommate”), first broadcast in September of that same year.
Regardless, the last three decades have been defined by the ever-greater flow of goods, services,
people, capital, and ideas around the world. The planet appeared to get smaller… at least if you
were the kind of global citizen who had access to Starbucks frappuccino, Adidas Samba, Samsung
OLED screens, a North American post-graduate qualification… and Bernstein Blackbooks.
Regardless of how it started, that era is over now.

The Bernstein Deglobalization Blackbook published on 18 May this year is neither a eulogy nor a
lament. It is, instead, an estimate — across three dozen analysts in eight different locations
globally — of the impact of deglobalization on their sectors, and a forecast of which companies
may win and lose. In the following pages, we provide summaries of the Blackbook chapters, each
dedicated to an industry and/or a region.

Alex Irving, our European Transport analyst, reiterates his long-held view that most options in
global trade are myths. Decoupling from China is impossible and reshoring isn’t happening. Even
evidence of nearshoring is absent from trade data despite the decade-long evolution of the trade
relationship between the US and China from partner to competitor. Jay Huang, our Asia Industrial
Technology analyst, highlights that deglobalization has accelerated investment for automation
technologies as a “local-for-local” orientation and is evident everywhere. Counterintuitively, in
industrial machinery and electronics components, foreign investment in China continues to grow.
Zhihan Ma, our US Broadlines and Hardlines analyst, highlights that many US retailers have
anticipated rising trade frictions: Target has already reduced its exposure to China for private label
discretionary products from 60% to roughly one-quarter.

The event that ended this era of globalization is as vague as the event that precipitated it. It may
have been the Brexit vote in 2016, the outbreak of Covid-19 in 2019, or “Liberation Day” in 2025.
Regardless of how trade negotiations between the US and the rest of the world are concluded,
every procurement officer, sales representative, ambassador (brand or otherwise), and
holidaymaker globally is now factoring in the risk of heretofore unanticipated cross-border frictions.
For anyone building a factory, a supply chain, or a global brand, those uncertainties elevate the
value of options in sourcing and distribution, and in staying close to home. Nobody told us life was
going to be this way. It’s a big world, after all.

DEGLOBALIZATION 39
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Strategy
Asia Quant
Rupal Agarwal, Asia Quantitative Strategy analyst, highlights the significant impact of
escalating tariffs due to deglobalization trends, particularly affecting Asian economies, with the US
imposing its highest effective tariff rates since the 1910s. The analysis indicates that, if tariffs stick
around, Vietnam may experience the most substantial GDP impact, with potential declines of 5%
to 6%, while countries like Singapore and Australia could act as safe havens due to their trade
surpluses with the US. While China faces the highest tariff value in Asia, deglobalization has
already been pushing China to focus on other regions – i.e., Europe, ASEAN, LATAM, and the
Middle East since 2017. The report suggests focusing on domestic sectors such as telecom,
financials, retailers, and utilities across Asia (including Japan), as well as high-yield and low-
volatility stocks, to mitigate risks. The key investment conclusion is to avoid sectors heavily reliant
on US exports, particularly consumer durables, autos and hardware & semis, with the most
impacted Bernstein covered stocks being in hardware & semis.

India
Venugopal Garre, India Strategist, highlights that the evolving landscape of deglobalization
presents both risks and opportunities for India. The US is reviewing global trade practices,
revealing that India's trade barriers are high, with average tariffs exceeding 11.5%. The impact of
the higher reciprocal tariffs is limited, as key export sectors such as pharma and IT are expected
to face limited downside due to their sensitivity and the lack of alternatives. Conversely, the apparel
sector has already seen tariff increases since 2019, while the electronics sector is still developing
and has limited relevance in the export basket. The impact on auto OEMs is limited given their
restricted global linkages, while for components, cost advantages should help sustain demand. A
trade agreement with the US is in the works, which would help alleviate concerns. The analysis
concludes that Indian markets should see a limited impact from the ongoing tariff wars given lower
global linkages, but opportunities could emerge for India as trade treaties are signed.

Sustainability
Yannick Ouaknine, Sustainability analyst, highlights that deglobalization has emerged as a
significant force reshaping the global economic landscape, characterized by rising geopolitical
tensions, protectionism, and strategic reshoring efforts that are undermining the sustainability
revolution. This shift is leading to a paradox where localization enhances national resilience but
complicates sustainability transitions, resulting in increased costs and supply chain instability for
clean technologies. Resource nationalism and fragmented ESG standards are creating
compliance challenges, while trade barriers slow innovation in the clean tech sector.

40 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Sectors
Industrials and Commodities
Peter Clark, European Chemicals analyst, highlights the industrial gases sector amid concerns
about the impacts of deglobalization and potential economic recession on profitability. He notes
that, despite facing inevitable risks, the gas majors — Air Liquide, Air Products, and Linde — are
positioned to manage these challenges effectively due to their strong business models, long-term
contracts, and diverse customer bases. While base gas volumes are expected to decline by 2%,
the companies are projected to see earnings growth in 2025, with Linde expected to achieve a 7%
increase in EPS despite forecast cuts. The report concludes with a positive investment outlook for
Linde, rated Outperform, as it is deemed the best positioned among the gas majors to deliver
strong profitability and value creation regardless of economic conditions. As at 11 June 2025, the
European Chemicals analyst is James Hooper.

Guillaume Delaby, Global Oil Services analyst, highlights that while global trade has
significantly slowed, the Middle East is experiencing a unique trend of continued globalization
alongside a growing emphasis on local and national development through In-Country Value (ICV)
programs. Companies heavily exposed to the region, such as Adnoc Drilling, Adnoc L&S, Technip
Energies, and Saipem, are well positioned to benefit from this dynamic, particularly as Adnoc
Drilling aims to become a leading player in the Oil Field Services market by leveraging
unconventional oil and gas opportunities. Despite potential short-term challenges related to oil
price fluctuations, the long-term outlook remains positive, with revenue growth expected across
the sector. Notably, Adnoc Drilling is highlighted as a key investment opportunity, rated
Outperform, making it the stock likely to benefit the most in this context.

Chad Dillard, US Electrical Equipment analyst, highlights a significant structural shift in US

industrial policy to favor domestic manufacturing. He projects that reshoring could lead to a
$7 trillion increase in domestic production and add approximately 1,000 TWh of electricity demand
to the grid, equivalent to the power needs of 20 New York Cities. This transition is expected to
enhance the earnings algorithms of electrical infrastructure companies, with Eaton, Hubbell, and
Quanta all positioned to benefit from the increased electricity demand driven by manufacturing.
Specifically, reshoring could boost EPS growth for these companies into the mid-to-high teens, as
every 1% increase in electricity demand translates into a 5% increase in EPS. Consequently, the
key investment conclusion is that Eaton, Hubbell, and Quanta (all rated Outperform) will be the
most positively impacted by the reshoring trend, with Eaton being particularly well positioned due
to its innovative Brightlayer Industrial Suite.

Nicholas J. Green, European Capital Goods analyst, highlights that Assa Abloy is well
positioned to thrive amid deglobalization trends, leveraging its extensive manufacturing footprint
and local branding strategies to enhance competitiveness. The company's Manufacturing
Footprint Programs (MFPs) have yielded significant cost savings and operational efficiencies,
while its strong presence in the US market, where 65% of costs of goods sold are sourced locally,
mitigates tariff risks. Assa's successful acquisitions of local brands further solidify its market
position and adaptability in various regions. Nick rates Assa Abloy Outperform.

Alex Irving, European Transport analyst, challenges the notion of deglobalization, asserting
that global trade is not declining but rather evolving, as evidenced by the continued growth of
supply chains and international trade links. Alex refutes claims of significant reshoring of
manufacturing to the US and Europe, noting stagnant manufacturing capital expenditure and
employment in these regions, while China maintains its dominance in global manufacturing with
record investment levels. The idea of decoupling from China is also dismissed, as the country
remains integral to global supply chains, with ongoing reliance on its manufacturing capabilities.
Instead, the report highlights a "China+1" strategy, where countries such as Mexico and other

DEGLOBALIZATION 41
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Asian economies are increasingly becoming vital suppliers, benefiting freight forwarders, which
are well positioned to manage the complexities of these evolving supply chains. The investment
conclusion emphasizes that major freight forwarders such as DSV and DHL are likely to see
permanently higher earnings due to increased demand for logistics services as companies
prioritize supply chain resilience.

Will Kirkness, European Business Services analyst, highlights the impact of the US's
protectionist policies on the European testing, inspection, and certification (TIC) sector. While
deglobalization trends are emerging, they are still in their infancy and manageable over the long
term. The TIC sector has historically benefited from globalization, but any shifts in supply chains
will result in process change for testing, which will drive organic growth over the medium to long
term. Intertek, SGS, and Bureau Veritas are all well positioned to capitalize on these changes,
with Intertek (Outperform) having the most significant exposure to consumer products and China
on a relative basis.

Alasdair Leslie, European Capital Goods analyst, highlights Encore's strategic approach to
deglobalization, emphasizing its vertically integrated and self-sufficient manufacturing model
based in Texas, which allows the company to avoid complex supply chains and tariffs while
enhancing operational efficiency. By sourcing nearly all its costs of goods sold domestically and
controlling the entire production process, Encore is well positioned to thrive in a deglobalizing
environment, despite facing short-term risks from a potential US recession. The company's ability
to generate strong margins and free cash flow, alongside its compliance with "Build America, Buy
America" standards, further solidifies its competitive advantage. The investment conclusion is that
Prysmian, which acquired Encore, is rated Outperform.

Harry Martin, European Automobiles & Components analyst, highlights the global tire industry
has been one of the most impacted by globalization trends with production shifting towards low-
cost countries, which has impacted market share of Tier 1 tire manufacturers such as Michelin,
Bridgestone, and Continental. Despite facing competition from low-cost imports, these companies
have maintained their competitive edge through innovation and a focus on premium products,
which has allowed them to sustain margins and shareholder returns. An increase in tariffs and
anti-dumping duties could shift the balance back in their favor – especially given they have high
localized production in every market - increasing market share and margins through better
capacity utilization. Notably, Michelin stands out as the top investment choice.

Nikhil Nigania, India Industrials and Infrastructure analyst, highlights the Indian power sector
amidst ongoing deglobalization, adjusting capital expenditure estimates for power generation to
approximately $40 billion annually over the next five years, down from an earlier estimate of $50
billion, with an additional $10 billion for transmission. Nikhil highlights a shift towards thermal
power (coal is the only energy source India has in abundance), with domestic companies such as
L&T and NTPC benefiting from increased orders for new thermal plants, while the wind sector
faces execution challenges. The transmission equipment market remains robust, supported by a
strong domestic manufacturing ecosystem, while solar PV is experiencing a supply glut despite
import restrictions fostering local production. Nikhil emphasizes the emerging battery
manufacturing sector as a key area for reducing dependence on China. The investment conclusion
is that L&T and NTPC are well positioned to benefit from these trends, both rated Outperform, with
L&T being the stock likely to benefit the most in this context, reflecting its pivotal role across
transmission, thermal power, and even renewable energy projects.

Marios Pastou and Valerie Jacob, EU Real Estate analysts, highlight the significant opportunity
of deglobalization for European industrial/logistics real estate, driven by recent supply chain
disruptions and a strategic shift towards re/nearshoring. As companies reassess their supply
chains, growing demand for industrial/logistics space in Europe is likely, particularly in Central and
Eastern Europe (CEE) and Southern Europe, due to these regions’ favorable business

42 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

environments, skilled labor forces, and proximity to key markets. CTP and Segro are identified as
key beneficiaries of this trend.

Stephen Reitman, European Automobiles & Components analyst, highlights that the auto
industry, traditionally a symbol of globalization, is facing significant challenges due to rising tariffs
and geopolitical tensions, prompting discussions about the viability of localized production. While
the local-for-local approach has long been favored to mitigate logistics costs and tariffs, the current
landscape reveals that fully near-shoring production is impractical for most automakers due to high
labor costs and the complexity of global supply chains. However, partial near shoring is becoming
more common, with brands such as BMW and Mercedes leveraging localized production to
enhance agility. Despite the challenges posed by tariffs, companies are expected to absorb costs
rather than drastically change their production strategies. Among the companies analyzed, BMW
stands out as a key investment opportunity, rated Outperform with a price target of €92.00,
reflecting its strong localization strategy and resilience in navigating the evolving market dynamics.

Daniel Roeska, US Autos & Auto Parts analyst, highlights that the Detroit 3 automakers —
Ford, General Motors, and Stellantis — are experiencing significant declines in market share due
to a combination of increased global competition, strategic missteps, and rising operational costs.
Once dominant players in both the US and global markets, their share has plummeted, from over
75% in the US to an estimated 37% by end-2025, with their global share dropping from 29% to
just 13%. The shift away from sedans to SUVs has not been enough to regain lost ground, as
foreign competitors have outpaced them in this segment. Additionally, US policies aimed at
boosting domestic production may inadvertently complicate operations for the D3, leading to
higher costs and diverting the focus from innovation. As a result, Daniel expects Ford and General
Motors to be particularly affected, both rated Underperform.

David Vernon, Airfreight & Surface Transportation analyst, highlights that the ongoing tariff
turmoil is likely to deepen economic ties between the US, Canada, and Mexico, leading to a more
transport-intensive regional economy. As tariffs on imports from China increase, the
regionalization of trade within North American trade is expected to result in more transport-
intensive local supply chains, which should help alleviate the ongoing surface-freight recession.
While there is uncertainty regarding the potential for a full-scale nearshoring shift, tariffs will
accelerate trends that were already in place before “Liberation Day”. Consequently, companies
with significant exposure to North American logistics, particularly those involved in trucking and
rail transport, are well positioned to benefit from these trends. Railroads as a group will benefit
from this effect as a more transport-intensive regional economy pushes up the cost of truck
transportation creating a tailwind to overall demand for cheaper alternatives like rail.

Consumer & Retail

Richard J. Clarke, Global Hotels & Leisure analyst, highlights the implications of the US's shift
towards a protectionist policy agenda, particularly focusing on how a potential crackdown on
international travel could impact the travel industry and related stocks. Richard highlights that while
the US has not yet imposed tariffs on services, the travel sector could face significant changes as
barriers go up. Countries such as Germany and the UK would benefit from a redirection of
international travel demand towards domestic markets. Conversely, countries heavily reliant on
inbound travel, such as Greece and Spain, would face substantial losses. The investment
conclusion is that Whitbread (WTB) is well positioned to capitalize on the potential increase in
domestic travel demand in the UK and Germany; it is rated Outperform, as it stands to benefit from
higher occupancy rates and average daily rates in a market with limited supply.

Danilo Gargiulo, US Restaurants analyst, highlights that the US restaurant industry, heavily
reliant on international expansion and low-cost operations, faces significant challenges due to
deglobalization, tariffs, and rising nationalistic sentiment. While tariffs may not directly significantly

DEGLOBALIZATION 43
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

impact food costs for restaurants given the relatively localized supply chain, the broader
implications of reduced consumer confidence, and restrictions on global mobility could lead to
decreased domestic demand, especially among low-income consumers who are more price
sensitive. Besides, rising anti-American sentiment may compress demand for US restaurants in
international markets. Major chains such as McDonald's and KFC are particularly vulnerable due
to their brand visibility and reliance on these demographics. Danilo expects that McDonald's will
be most affected by these trends, reflected in its Market-Perform rating.

Melinda Hu, China Consumer analyst, highlights the impact of US protectionist policies on
China's appliance industry, emphasizing that China's dominance, controlling approximately 85%
of appliance component manufacturing, has rendered the sector resilient to deglobalization
pressures despite aggressive US tariffs. While the US has sought to curb its trade deficit through
tariffs, the effectiveness of these measures is questioned as Chinese manufacturers have adapted
by relocating production to countries such as Mexico. The report highlights that manufacturers
such as Haier, Midea, and Gree have successfully diversified their operations, with Haier
maintaining significant US production and Midea facing the most direct tariff exposure. The
investment conclusion is that Haier Group, rated Market-Perform, is the most impacted stock, as
despite its domestic manufacturing capabilities, which provide short-term insulation against tariff
pressures, it has the greatest exposure to US consumption.

Zhihan Ma, CFA, US Retailing Broadlines & Hardlines analyst, highlights that the US retail
sector faces significant challenges from deglobalization, particularly due to new tariffs and
immigration policy risks. Retailers such as Dollar Tree and Target are particularly exposed to the
impacts of tariffs on Chinese imports, which have historically affected their gross margins, while
labor cost pressures are compounded by tightening immigration policies that could reduce the
workforce supply. Despite these challenges, the report indicates that retailers have diversified their
supply chains away from China, mitigating some direct cost impacts. The analysis concludes with
an Outperform rating for Costco, which is well positioned to navigate these challenges due to its
relatively limited import exposure and strong earnings power from membership fee income, as well
as higher employee wages and lower turnover rates.

Nadine Sarwat and Trevor Stirling, American & European Beverages analysts, highlight the
impact of deglobalization on the spirits industry, particularly focusing on the implications of
Protected Geographical Indications (PGIs) amidst rising trade tensions and tariffs. Approximately
56% of full-strength spirit sales from the coverage companies come from PGI products, which
have been crucial for sales growth and premiumization. However, the reliance on PGIs poses risks
in a deglobalized world, as strict production regulations limit flexibility in supply chains and expose
companies to tariff-related challenges. Rémy Cointreau, Cuervo, and Brown-Forman are identified
as the most at risk due to their significant exposure to PGI exports. Among these, Rémy Cointreau
would be particularly impacted by a potential 20% tariff on EU imports to the US.

Luca Solca, Global Luxury Goods analyst, highlights that the luxury goods sector is navigating
significant challenges posed by deglobalization, including rising tariffs and geopolitical tensions.
While luxury brands have historically thrived on globalization, recent shifts in trade policies,
particularly tariffs imposed by the US on imports from China, could hinder growth, especially for
brands heavily reliant on Chinese manufacturing. However, luxury companies are adapting
through geographic rebalancing, local branding strategies, and potential delocalization of
production to the US. Luca concludes with a positive outlook for LVMH, which is expected to
rebound from current challenges and remains a key investment opportunity in the luxury sector,
maintaining an Outperform rating on the stock.

William Woods and Aneesha Sherman, European and US Retail analysts, highlight that the
traditional global supply model for apparel is facing significant challenges due to rising costs,
geopolitical tensions, and recent tariff changes, particularly affecting US and European brands

44 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

reliant on Asian production. While the concept of near-shoring presents theoretical benefits such
as shorter lead times and risk mitigation, the practical implementation remains cost-prohibitive and
disruptive for most retailers. Instead, a gradual shift towards partial near-shoring is emerging, with
companies such as Adidas and H&M establishing localized supply hubs to enhance agility without
fully abandoning their global supply chains. Ultimately, global sourcing should continue to
dominate, but localized approaches are likely to complement it over time. Among the companies
analyzed, Inditex is noted as the best positioned to thrive in this evolving landscape, rated
Outperform with a price target of €55.00, reflecting its adaptable business model centered on
localized supply.

Financials
Gautam Chhugani, Global Digital Assets analyst, discusses the potential for decentralized
technologies, particularly in light of the need for alternative trust layers as global trust erodes.
Gautam highlights three key areas of focus: Bitcoin as a “trustless” store of value, decentralized
blockchains as a global settlement layer, and the role of tokenization, stablecoins, and CBDCs in
creating a new value layer for global transactions. Bitcoin is poised to become an alternative
reserve asset for nation states, while decentralized blockchains facilitate trustless transactions
across borders. Tokenization is expected to enhance liquidity and accessibility for various assets,
with stablecoins emerging as critical components of the global financial ecosystem. Given these
developments, Gautam recommends Coinbase (COIN), MicroStrategy (MSTR), and Robinhood
(HOOD).

Healthcare
Courtney Breen, US Biopharmaceuticals analyst, highlights that the biopharma sector faces
significant tariff-related risks due to complex global supply chains and tax-optimization strategies.
Courtney identifies Merck (MRK) and AbbVie (ABBV) as the highest-risk companies due to their
substantial import volumes and reliance on high transfer prices, which could expose them to
increased costs from tariffs. In contrast, companies like Gilead (GILD) and Moderna (MRNA)
appear better positioned to manage these risks, primarily due to their domestic manufacturing
strategies. Ultimately, Courtney concludes that Merck (MRK) is the stock most impacted by these
evolving tariff dynamics, although mitigation efforts (inventory stockpiling & manufacturing
investments), are underway across the sector to minimize near-term and long-term impacts of
tariffs.

Eve Burstein, US Life Science Tools & Diagnostics analyst, highlights that while total sales in
life science tools & diagnostics in China have been weak in the last few years, it has been hard to
fully determine the competitive dynamics within the country. Some signs (such as government
policies aimed at self-reliance, and a clear rise in domestic capabilities in the gene sequencing
space) have caused worry that local competitors could be replacing foreign companies. However,
Eve suggests that despite these challenges, demand for high-end analytical instruments from
foreign companies remains strong, indicating that the market is not yet "dead" for non-Chinese
firms – though ongoing monitoring is crucial. Given the moderate assurance about the prospects
for established diversified tools companies, Eve rates Thermo Fisher Scientific (TMO) and Waters
Corporation (WAT) Outperform.

Florent Cespedes, European Biopharmaceuticals analyst, highlights the potential impact of

deglobalization on the pharmaceutical sector in the context of recent tariff discussions initiated by
the US administration. Florent emphasizes that while pharmaceuticals were excluded from the
latest tariffs, there remains concern regarding transfer price tariffs, which could significantly affect
companies with limited US manufacturing footprints. Notably, Novo Nordisk and UCB are identified
as particularly vulnerable due to their concentrated portfolios and minimal US production. The key

DEGLOBALIZATION 45
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

investment conclusion is that investors should closely monitor Novo Nordisk, which is most
impacted by these developments, as it faces heightened risk in the evolving regulatory landscape.

Lisa Bedell Clive and Susannah Ludwig, European Medical Technologies & Services
analysts, highlight the European medical devices sector in the context of the implications of the
proposed US tariffs and a potential global trade war, emphasizing that the sector has already
experienced significant deglobalization, particularly regarding supply chains between the US and
China. As multinational medical device companies increasingly regionalize their operations to
mitigate risks, the analysis highlights that while certain products may qualify for tariff exemptions,
the overall impact will vary based on geographic mismatches between sales and manufacturing.
Companies such as Philips, Healthineers, Smith & Nephew, and Convatec are rated Outperform
due to their strategic positioning and lower exposure to tariffs, while GN Store Nord is identified as
having the highest risk due to its significant US revenue and unfavorable manufacturing footprint.
The investment conclusion is that Smith & Nephew stands out as one of the best-placed stocks,
rated Outperform, due to its proactive measures in regionalizing its supply chain over time.

Rebecca Liang, China Pharma and Biotech analyst, highlights that while tariffs are a significant
concern for many sectors, new data sanctions from the US pose a more substantial threat to the
biotechnology industry, particularly affecting Chinese firms. The limited direct impact of tariffs on
pharmaceuticals is overshadowed by the broader implications of the NIH data ban and the NSCEB
report, which restrict access to critical research databases for Chinese researchers. This blockade
could hinder overseas business development activities for Chinese biopharma companies,
potentially resulting in downside of $20-30 billion annually for the sector. Companies such as
Akeso, Hengrui, Hansoh, and Innovent, which have substantial revenue exposure to international
markets, are particularly at risk. Among these, Akeso is rated Outperform with a price target of
HKD65.00, reflecting its resilience in navigating these challenges.

Lee Hambright, US Medical Devices analyst, highlights the impact of the US’s protectionist
policy agenda on the medical devices sector. Through the Q1 earnings cycle, most US medtech
companies sized the impact of proposed tariffs on 2025 earnings. Lee summarizes the tariff-
related commentary in Q1 reports, quantifies the implied impact on FY25 EPS, and compares
those values to actual FY25 estimate revisions through the earnings cycle. The investment
conclusion is that Intuitive Surgical (ISRG), Boston Scientific (BSX), Stryker (SYK) and Insulet
(PODD) — all rated Outperform —are well positioned to navigate tariff headwinds, supported by
strong underlying markets and healthy new product launch cycles.

Technology, Media & Telecom

Qingyuan Lin, China Semiconductors analyst, and Mark Li, Asian Semiconductors analyst,
highlight the ongoing trend of deglobalization within the foundry sector, particularly emphasizing
the implications for major players such as TSMC, SMIC, UMC, Hua Hong, and Vanguard. While
there is evidence of decoupling, it is not progressing as rapidly as anticipated. For instance, in
2024, only 56% of mature-node demand from Chinese IC suppliers was sourced from domestic
foundries, far lower than what many would expect, which is that the sector would fully decouple
into China/non-China. This indicates that the sector still strongly relies on a globalized supply
chain. However, the geopolitical tension did indeed force China to spend more in expanding
foundry capacity, and as a result Chinese foundries have made strides in increasing their market
share, particularly in mature nodes, although they still face challenges in advanced nodes due to
equipment constraints and limited global competitiveness in technology. The analysis concludes
with a positive investment outlook for TSMC and SMIC, both rated Outperform, as they are less
impacted by the intensified competition in the mature node segment.

46 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

David Dai, Japan Semiconductors analyst, highlights that Japan's semiconductor equipment
(SPE) companies are uniquely positioned to capitalize on global deglobalization trends,
particularly due to their ability to serve both the rapidly growing US market and the resilient
Chinese market without facing stringent restrictions. The report emphasizes that approximately
40% of global semiconductor capital expenditure over the next decade will be linked to government
subsidies, with Japan's SPE expected to regain market share from 23.9% to 28.4% by 2026. The
investment conclusion indicates a preference for Tokyo Electron and DISCO, both rated
Outperform, with Tokyo Electron being the most impacted stock.

Jay Huang, Ph.D., Global Automation analyst, highlights that deglobalization is reshaping
global manufacturing investment strategies, with a notable 40% increase in greenfield FDI CAPEX
from 2020 to 2024 compared to previous years. This shift is primarily a redeployment of capital
rather than net growth, resulting in a moderate positive impact on factory automation demand,
particularly in high-growth sectors like renewable energy and semiconductors. Advanced
economies are attracting more investment than developing ones, while Japanese machine makers
are aggressively expanding in the US and Europe, leading to a market-share shift in favor of
companies like FANUC, Keyence, and SMC. Jay concludes that investors should focus on
FANUC, which is poised to benefit significantly from these trends, and is rated Outperform.

Annick Maas, European Media analyst, highlights that the advertising industry is increasingly
characterized by deglobalization, with over 40% of global ad spend now driven by small and
medium-sized enterprises (SMEs). This shift is propelled by technological advancements that
facilitate hyper-local advertising, allowing smaller advertisers to thrive despite geopolitical
uncertainties. The automotive sector is particularly vulnerable to macro pressures from tariffs,
which could lead to reduced advertising budgets, especially in TV advertising, a key channel for
auto brands. Consequently, Annick concludes that while the advertising sector remains resilient,
local advertising is set to grow, with the broadcasters and agencies most impacted by these
trends.

Rahul Malhotra, India Technology, Media & Internet analyst, highlights that the Indian IT
services sector, heavily reliant on globalization, faces significant challenges from deglobalization
trends, including tariff risks and immigration policy changes. With 60% of revenues from the US
and 30% from Europe, the sector is particularly vulnerable to US macroeconomic uncertainties
and potential recession impacts on IT budgets. The tightening of immigration policies could further
constrain growth, although companies have been reducing their dependence on H-1B visas. Given
these dynamics, Infosys is identified as a key investment opportunity, and Rahul maintains an
Outperform rating on the stock amidst these challenges.

Richard Nguyen & Derric Marcon, European Technology/Software analysts, highlight that
deglobalization has the potential to partially reshape the European software and services sector,
whose growth continues to be driven by the shift to public cloud services and the impact of
generative AI. Issues such as data protection, cybersecurity, and the risk related to extraterritorial
laws are increasingly selection/choice criteria for companies and governments (especially in
Europe). The annual growth of the sovereign cloud market in Europe is thus estimated at 83%,
bringing its estimated size to $47 billion by 2028. The software market, despite its global nature,
could see niche markets emerge without this fundamentally changing its structure. On the other
hand, the significant shortage of engineers/software developers in Europe should encourage
European IT service providers to continue expanding their productive resource pools abroad,
particularly in India. The key investment conclusion is to maintain an Outperform rating on SAP.

DEGLOBALIZATION 47
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Alex Wang, CFA, Asia Tech Hardware analyst, highlights that Apple's gradual shift in its supply
chain amidst deglobalization poses both challenges and opportunities, particularly in the context
of its manufacturing plans in India and the evolving AI server landscape. While Apple aims to
increase production in India to 25%, infrastructure and labor inefficiencies hinder progress, with
projections suggesting only single-digit contributions by 2025. Conversely, Taiwan's ODMs are
capitalizing on the AI boom, significantly increasing exports to the US and engaging with US cloud
service providers. Luxshare stands out as a key beneficiary in this environment, diversifying its
business and on track to reduce reliance on Apple from 75% to approximately 50% by 2026, Alex
thus maintains an Outperform rating on the stock.

Mark L. Moerdler, Global Software analyst, highlights the trend of deglobalization affecting the
software and Cloud industry, and suggests that this sector will be less impacted than anticipated,
primarily due to unique characteristics of software, which shield it from governmental pressures
and tariffs. Unlike other industries, software tends to consolidate around a few large vendors,
benefiting from scale advantages, network effects, and high switching costs. While IaaS/PaaS
offerings may face challenges from local governmental initiatives pushing for domestic providers
— potentially impacting Microsoft Azure — the overall ERP market, including companies such as
SAP and Oracle, is expected to remain resilient. Notably, Oracle is positioned to benefit from these
developments due to its Alloy platform, which allows local providers to offer comprehensive
services. In conclusion, investors should consider Oracle as the key stock to focus on, given its
favorable positioning in a landscape influenced by deglobalization pressures.

48 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

◼
APPENDIX

DEGLOBALIZATION 49
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

EXHIBIT 86: New Global Trade Order Leaders (Universe of stocks)

Name Ticker Country/ Industry Market 3m ADV Leaders/ Category Comment from Bernstein analysts (when available)
Region cap. $bn $m Laggards

Eaton Corp Plc ETN US US Capital Goods 126 208 Leaders Capex Reshoring raises electrical intensity, which requires a larger grid and more
power management.
Quanta Services Inc PWR US US Capital Goods 51 394 Leaders Capex Gatekeeper to US electrical infrastructure buildout as the largest contractor of
craft labor in the US.
Hubbell Inc HUBB US US Capital Goods 21 240 Leaders Capex Reshoring raises electrical intensity, which requires a larger grid and more
power management.
Caterpillar Inc CAT US US Capital Goods 169 911 Leaders Capex Building domestic manufacturing infrastructure will increase demand for
construction equipment.
Oshkosh Corp OSK US US Capital Goods 7 77 Leaders Capex / High US local content Building domestic manufacturing infrastructure will increase demand for
construction equipment.
United Rentals Inc URI US US Capital Goods 46 408 Leaders Capex Building domestic manufacturing infrastructure will increase demand for
construction equipment.
Vulcan Materials Co VMC UN US Construction & 35 86 Leaders Capex / High US local content US reshoring beneficiary.
Materials
Honeywell International HON UW US Ind. Goods & 146 329 Leaders Capex / Sovereignty US reshoring beneficiary.
Inc Services
Nucor Corp NUE US US Basic Resources 29 306 Leaders Capex US reshoring beneficiary.
Jacobs Solutions Inc J US US Commercial & 15 110 Leaders Capex Leading designer of advanced manufacturing facilities.
Professional Serv.
Trimble Inc TRMB US US Technology 17 101 Leaders Capex Sells software that reduces the cost of building infrastructure, and automation
Hardware & hardware that increases jobsite productivity.
Equipment
Paccar Inc PCAR US US Capital Goods 50 293 Leaders High US local content Greater movement of goods in the US means greater demand for PCAR’s
trucks, which are overwhelmingly manufactured in the US.
Intuitive Surgical Inc ISRG US US Health Care 188 1,096 Leaders High US local content ISRG manufactures 98% of its robotic systems in the US and 80% of its
Equipment & consumables in Mexico.
Services
Insulet Corp PODD US US Health Care 21 244 Leaders High US local content PODD's products are largely protected from tariffs given well-established
Equipment & exemptions, such as the Nairobi Protocol.
Services
Ross Stores Inc ROST US US Consumer 46 465 Leaders Sovereignty / Geopolitical distance Also in the SG Domestic Supply Chain Basket.
Discretionary
Distribution
Burlington Stores Inc BURL US US Consumer 15 312 Leaders Sovereignty / Geopolitical distance US sales only, varied cost base, not tied to any single cost market, minimal
Discretionary direct supply exposure to China.
Distribution
Waters Corp WAT US US Pharmaceuticals, 21 186 Leaders Capex If pharmaceutical companies build up capacity in the US, they will need to add
Biotechnology instruments to facilities before they fill the supply rooms with consumables.
This favours the instrument-heavy providers (Waters is 43% instruments and
Agilent is 36% instruments, vs. 20% or less in instruments for Thermo Fisher,
Avantor, Revvity, and DHR).

50 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Name Ticker Country/ Industry Market 3m ADV Leaders/ Category Comment from Bernstein analysts (when available)
Region cap. $bn $m Laggards

Agilent Technologies Inc A US US Pharmaceuticals, 34 253 Leaders Capex If pharmaceutical companies build up capacity in the US, they will need to add
Biotechnology instruments to facilities before they fill the supply rooms with consumables.
This favours the instrument-heavy providers (Waters is 43% instruments and
Agilent is 36% instruments, vs. 20% or less in instruments for Thermo Fisher,
Avantor, Revvity, and DHR).
Oracle Corp ORCL US US Software & 494 1,481 Leaders Sovereignty Oracle can help local providers meet sovereign and local Cloud requirements
Services via Oracle Alloy as workloads move from global players to local players.
Palo Alto Networks Inc PANW US US Software & 130 963 Leaders High US local content Upside: manufacturing is 100% in US (as are the majority of revenue
Services customers), and inputs have only partial exposure to global supply chains
(reduced after the prior tariff impacts).
Fortinet Inc FTNT US US Software & 78 508 Leaders Geopolitical distance Upside: Taiwanese base gives FTNT natural access both to China and the
Services US/Europe. Downside: greater exposure to recession pressures with large
SMB and enterprise branch office businesses.
Cloudflare Inc - Class A NET US US Software & 62 467 Leaders Sovereignty / Geopolitical distance Upside: operates locally with 400+ data centers integrated inside local telcos
Services in 100+ companies around the world (including mainland China).
Zscaler Inc ZS US US Software & 47 603 Leaders Sovereignty Upside: operates locally with 150+ data centers globally, making local
Services operations available in most major regions; SD-WAN capabilities can help
direct network traffic as needed across or around jurisdictions.
Gitlab Inc-Cl A GTLB US US Software & 8 128 Leaders Sovereignty Upside: primary use case is self-hosted, enabling GTLB’s customers to avoid
Services risks associated with mandatory Cloud-hosted peers.
Freeport-Mcmoran Inc FCX US US Materials 60 607 Leaders Capex / Sovereignty High cost US copper miner that benefits from reshoring (places to invest
capital) and sovereignty (increase in US copper price vs global copper price).
Linde Plc LIN US US Materials 223 998 Leaders Capex/Sovereignty / High US local Best-in-class industrial gas major with a local-for-local business model on a
content / Geopolitical distance global scale, and high earnings protection. Major beneficiary of reshoring,
energy security and sovereignty investments, with the much-copied density
and discipline model driving industry-leading margins and returns.
Air Products & ChemicalsAPD US US Materials 62 345 Leaders Capex / Sovereignty / High US local Industrial gas major, refocusing on its gases core under new leadership.
Inc content / Geopolitical distance Leading on-site position in the US and also major beneficiary of reshoring,
energy security and sovereignty investments. APD lost focus as it looked for
growth via complex clean energy megaprojects but the new CEO (ex-Linde) is
looking to drive performance in the core while derisking the megaprojects.
Dynatrace Inc DT US US Software & 16 143 Leaders Sovereignty Data sovereignty is fueling demand for alternative platforms to those of
Services hyperscalers (i.e. AWS, Google, Oracle, and Microsoft), tailored more closely
to European government and business customers’ data sovereignty
requirements.
Walmart Inc WMT US US Consumer 772 1989 Leaders Sovereignty WMT has scale advantage to negotiate with suppliers and move production
Staples away from China. A ‘trade-down’ beneficiary.
Distribution
Dollar General Corp DG US US Consumer 25 424 Leaders High US local content Limited tariff exposure (4% direct import exposure as a % of COGS and 10%+
Staples overall import exposure). A ‘trade-down’ beneficiary.
Distribution
Prologis Inc PLD US US Equity Real 104 543 Leaders Capex Major US-focussed industrial/logistics real estate owner-developer.
Estate Investment

DEGLOBALIZATION 51
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Name Ticker Country/ Industry Market 3m ADV Leaders/ Category Comment from Bernstein analysts (when available)
Region cap. $bn $m Laggards

Nintendo 7974 JT Japan Media & 108 447 Leaders Geopolitical distance Video gaming is simultaneously still globalizing from a market standpoint, and
Entertainment not at the center of US political preoccuptions. It’s predominantly digital too,
which means tariffs are unlikely to be applied to Nintendo.
Capcom 9697 JT Japan Media & 16 53 Leaders Geopolitical distance Video gaming is simultaneously still globalizing from a market standpoint, and
Entertainment not at the center of US political preoccuptions. It’s predominantly digital too,
which means tariffs are unlikely to be applied to Capcom.
Anta 2020 HK China Consumer 35 133 Leaders Sovereignty Almost 100% of Anta’s revenue is generated in China.
Durables &
Apparel
Li Ning 2331 HK China Consumer 5 56 Leaders Sovereignty Almost 100% of Li Ning’s revenue is generated in China.
Durables &
Apparel
Suzuki Motor Corp 7269 JT Japan Automobiles & 23 117 Leaders Geopolitical distance The imposition of US tariffs on auto imports is a major threat to Japan’s autos
Components sector. We expect Japanese automakers to face a significant headwind impact
on their profits, which could wipe out some of their earnings. However, Suzuki
stands to benefit from the rapidly growing Indian market, which has minimal
exposure to import tariffs.
ICICI Bank ICICIBC IS India Banks 119 196 Leaders Sovereignty / Additional capex due to Expected to benefit from financing of capex through corporate loans.
reshoring
Daiichi Sankyo Co Ltd 4568 JT Japan Pharmaceuticals, 48 156 Leaders High US local content Well established manufacturing facilities in the US.
Biotechnology
Inovance 300124 C2 China Capital Goods 24 207 Leaders Sovereignty Import substitution in China is expected to accelerate due to deglobalization
and geopolitical tensions.
FANUC Corp 6954 JT Japan Capital Goods 26 110 Leaders Geopolitical distance / Additional Deglobalization leads to elevated capex globally, as companies broadly adopt
capex due to reshoring the "local-for-local" strategy. Japanese factory automation players have a
stronghold in the US and have been aggressively investing in Europe and
taking share from their local peers.
SMC Corp 6273 JT Japan Capital Goods 24 111 Leaders Geopolitical distance / Additional Deglobalization leads to elevated capex globally, as companies broadly adopt
capex due to reshoring the "local-for-local" strategy. Japanese factory automation players have a
stronghold in the US and have been aggressively investing in Europe and
taking share from their local peers.
Harmonic Drive 6324 JT Japan Capital Goods 2 36 Leaders Geopolitical distance / Additional Deglobalization leads to elevated capex globally, as companies broadly adopt
capex due to reshoring the “local-for-local" strategy. Japanese factory automation players have a
stronghold in the US and have been aggressively investing in Europe and
taking share from their local peers.
LG Energy Solution Ltd 373220 KP Korea Capital Goods 49 59 Leaders Sovereignty / High US local content Substantial investments in US battery manufacturing capcity to decouple from
China.
AirTAC 1590 TT Taiwan Capital Goods 6 28 Leaders Sovereignty Import substitution in China is expected to accelerate due to deglobalization
and geopolitical tensions.
Proya 603605 C1 China Household & 5 77 Leaders Sovereignty Almost 100% of Proya’s revenue is generated in China.
Personal
Products
NAURA Technology 002371 C2 China Semiconductors & 31 260 Leaders Additional capex due to reshoring / Chinese equipment vendors take share from global leaders, driven by domestic
Group Co Ltd Equipment Sovereignty substitution in China.

52 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Name Ticker Country/ Industry Market 3m ADV Leaders/ Category Comment from Bernstein analysts (when available)
Region cap. $bn $m Laggards

AMEC 688012 C1 China Semiconductors & 15 150 Leaders Additional capex due to reshoring / Chinese foundries are taking share from global leaders, driven by domestic
Equipment Sovereignty substitution in China.
Piotech Inc 688072 C1 China Semiconductors & 6 65 Leaders Additional capex due to reshoring / Chinese foundries are taking share from global leaders, driven by domestic
Equipment Sovereignty substitution in China.
Keyence Corp 6861 JT Japan Technology 101 247 Leaders Geopolitical distance / Additional Deglobalization leads to elevated capex globally, as companies broadly adopt
Hardware & capex due to reshoring the "local-for-local" strategy. Japanese factory automation players have a
Equipment stronghold in the US and have been aggressively investing in Europe and
taking share from their local peers.
TEL 8035 JT Japan Semiconductors & 77 541 Leaders Additional capex due to reshoring / Deglobalization/localization increase capex and capacity expansion for
Equipment Sovereignty semiconductor fabs. This benefits equipment suppliers.
SMIC 981 HK China Semiconductors & 54 602 Leaders Additional capex due to reshoring / Chinese foundries are taking share from global leaders, driven by domestic
Equipment Sovereignty substitution in China.
Advantest Corp 6857 JT Japan Semiconductors & 44 836 Leaders Additional capex due to reshoring / Deglobalization/localization increase capex and capacity expansion for
Equipment Sovereignty semiconductor fabs. This benefits equipment suppliers.
Disco Corp 6146 JT Japan Semiconductors & 25 1,114 Leaders Additional capex due to reshoring / Deglobalization/localization increase capex and capacity expansion for
Equipment Sovereignty semiconductor fabs. This benefits equipment suppliers.
Lastertec 6920 JT Japan Semiconductors & 10 505 Leaders Additional capex due to reshoring / Deglobalization/localization increase capex and capacity expansion for
Equipment Sovereignty semiconductor fabs. This benefits equipment suppliers.
Screen 7735 JT Japan Semiconductors & 8 88 Leaders Additional capex due to reshoring / Deglobalization/localization increase capex and capacity expansion for
Equipment Sovereignty semiconductor fabs. This benefits equipment suppliers.
Kokusai 6525 JT Japan Semiconductors & 5 61 Leaders Additional capex due to reshoring / Deglobalization/localization increase capex and capacity expansion for
Equipment Sovereignty semiconductor fabs. This benefits equipment suppliers.
Samsung SDI Co Ltd 006400 KP Korea Technology 9 64 Leaders Sovereignty / High US local content Substantial investments in US battery manufacturing capcity to decouple from
Hardware & China.
Equipment
Silergy 6415 TT Taiwan Semiconductors & 5 36 Leaders Sovereignty Chinese analog players are taking share from global leaders, driven by
Equipment domestic substitution in China.
NTPC Ltd NTPC IS India Utilities 38 58 Leaders Sovereignty Reducing significant dependence on energy.
BYD Co Ltd 1211 HK China Automobiles & 153 741 Leaders Sovereignty No US exposure.
Components
LG Chem Ltd 051910 KP Korea Materials 11 48 Leaders Capex China+1.
Luxshare Precision 002475 C2 China Technology 32 553 Leaders Capex Business diversification.
Industry Co Hardware &
Equipment
Hua Hong Semiconductor1347 HK China Semiconductors & 8 135 Leaders Sovereignty DM/China decoupling.
Ltd Equipment
Delta Electronics Inc 2308 TT Taiwan Technology 35 98 Leaders Capex Business diversification.
Hardware &
Equipment

DEGLOBALIZATION 53
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Name Ticker Country/ Industry Market 3m ADV Leaders/ Category Comment from Bernstein analysts (when available)
Region cap. $bn $m Laggards

Tencent Holdings Ltd 700 HK China Media & 601 1,691 Leaders Sovereignty DM/China decoupling.
Entertainment
Alibaba Group Holding BABA US China Consumer 288 2,459 Leaders Sovereignty DM/China decoupling.
Ltd Discretionary
Distribution
Dixon Technologies India DIXON IS India Consumer 11 79 Leaders Sovereignty Import substitution.
Ltd Durables &
Apparel
Panasonic Holdings Corp 6752 JT Japan Consumer 26 101 Leaders High US local content Localised production.
Durables &
Apparel
Xiaomi Corp 1810 HK China Technology 177 1,763 Leaders Sovereignty No US exposure.
Hardware &
Equipment
Hygon Technology C 688041 C1 China Semiconductors & 46 342 Leaders Sovereignty DM/China decoupling.
Equipment
Cambricon Technologies 688256 C1 China Semiconductors & 35 509 Leaders Sovereignty DM/China decoupling.
Corp Lt Equipment
ZTE Corp 763 HK China Technology 20 55 Leaders Sovereignty DM/China decoupling.
Hardware &
Equipment
Shenzhen Transsion 688036 C1 China Technology 12 67 Leaders Sovereignty DM/China decoupling.
Holdings Co Hardware &
Equipment
Technip Energies TE FP France Energy 7 11 Leaders Capex / High US local content World leader in LNG (Qatar, US) and in CCUS (UK).
Saipem SPM IM Italy Energy 6 107 Leaders Capex / No US exposure Dominant European E&C contractor in Saudi Arabia.
Smith & Nephew SN/ LN UK Health Care 13 30 Leaders High US local content Well established manufacturing for nearly all its product lines in the US, and
Equipment & flexibility to shift its footprint as needed.
Services
Siemens Healthineers SHL GY Germany Health Care 60 56 Leaders High US local content Two of its four business units are headquartered in the US, with more
Equipment & employees in the US than in its home market, Germany.
Services
Eurofins ERF FP Luxembourg Pharmaceuticals, 12 25 Leaders Capex / Sovereignty / Geopolitical Local-for-local business hence benificiary from re-onshoring business through
Biotechnology distance local producer or client capex plans. Very limited exposure to China.
Gerresheimer GXI GY Germany Pharmaceuticals, 2 19 Leaders Capex / Sovereignty / Geopolitical Local-for-local business hence benificiary from re-onshoring business through
Biotechnology distance local producer or client capex plans. Very limited exposure to China.
Inditex ITX SQ Spain Consumer 175 144 Leaders Sovereignty / Geopolitical distance Inditex looks the best positioned in the context of a deglobalizing world, with a
Discretionary high percentage of near-sourced products currently and a flexible business
Distribution model with short lead times (6-12 weeks average vs. peers at 6-9 months).
DNB DNB NO Norway Banks 41 47 Leaders Capex / Sovereignty Norway is a very sound sovereign against geopolitical turmoil. DNB is a large
energy/offshore player and could benefit from supply-chain
rebuild/infrastructure capex.

54 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Name Ticker Country/ Industry Market 3m ADV Leaders/ Category Comment from Bernstein analysts (when available)
Region cap. $bn $m Laggards

Deutsche Boerse DB1 GY Germany Financial Services 60 149 Leaders Sovereignty Tensions with the US appear to be focusing European policymakers' minds on
the reform of Europe's capital market. Meanwhile, increased infrastructure and
defence spending would tend to boost European government debt issuance.
These dynamics benefit DB1’s European exchange business more broadly
and the fixed income derivatives franchise specifically.
Euronext ENX FP Netherlands Financial Services 17 41 Leaders Sovereignty As Europe's primary equity market listing venue, Euronext stands to benefit
from 'reshoring' of Europe's capital market from the US, and would be the
main beneficiary of greater political resolve to integrate and deepen European
capital markets.
Whitbread WTB LN UK Consumer 7 18 Leaders Sovereignty The UK is a significant exporter of travel globally. In a world where barriers to
Services trade spead to the travel industry, Whitbread stands to gain from a 'reshoring'
of UK travel demand, if UK citizens trade international trips for staycations.
Michelin ML FP France Automobiles & 27 61 Leaders Sovereignty Tier 1 tyremakers have been impacted by production shifting towards low-cost
Components countries which has helped budget competition. An increase in tariffs could
shift the balance back towards the Tier 1s. Michelin is best placed with high
localised production in every market - allowing it to increase market share and
margins through better capacity utilisation.
Argenx ARGX BB Netherlands Pharmaceuticals, 35 51 Leaders High US local content Argenx deliberately does not have manufacturing capabilities so that it can
Biotechnology focus more on R&D. All Argenx’s drugs for sale in the US are produced by
Lonza in the US. Hence, we believe that Argenx will only win relative to those
other EU biopharma companies in our coverage universe that have to import
into the US some of the drugs they produce outside the US.
Lonza LONN SE Switzerland Pharmaceuticals, 51 110 Leaders Geopolitical distance We expect Lonza to win in both relative and absolute terms because of the
Biotechnology $1bn Vacaville (California) plant acquisition from Roche in 4Q24. This facility
accounts for ca. one-third of the CDMO (contract development and
manufacturing organization) industry’s protein-based drugs capacity in the US.
Vacaville is currently running down the volumes it produces for Roche. Lonza
will replace these volumes with sales to third-party customers in as value
creative a manner as possible.
ASML ASML NA Netherlands Semiconductors & 308 565 Leaders Capex / Sovereignty ASML expects growing wafer demand based on strategic considerations
Equipment related to geopolitical risks, estimating strategic demand at around 5-8% of
total additional wafer demand.
SAP SAP GY Germany Software & 373 553 Leaders Sovereignty / Other (Geopolitical SAP is the key enabler for enterprises, notably in manufacturing, CPG and
Services distance) retail industries, that plan to diversify and lower risks for their supply chains.
SAP is the world No.1 supply chain solution software provider.
Rio Tinto RIO LN UK Materials 101 126 Leaders Sovereignty Potential to fast-track Resolution - largest undeveloped copper mine in the US;
potential to provide gallium to US/Canada after China export ban.
BHP Group BHP LN UK Materials 128 26 Leaders Sovereignty Potential to fast-track Resolution - largest undeveloped copper mine in the US.
Glencore GLEN LN Switzerland Materials 47 131 Leaders Geopolitical distance Restrictions, controls, etc. all improve Glencore's marketing business.
Air Liquide AI FP France Materials 121 165 Leaders Capex / Sovereignty / High US local All the benefits of the local-for-local business model on a global scale, as well
content / Geopolitical distance as reshoring, energy security and sovereignty investments.
CTS Eventim EVD GY Germany Media & 12 18 Leaders Geopolitical distance Mostly a relative winner as other media stocks are more volatile (adv.-driven
Entertainment and GDP linked). Barely impacted by previous downturns.

DEGLOBALIZATION 55
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Name Ticker Country/ Industry Market 3m ADV Leaders/ Category Comment from Bernstein analysts (when available)
Region cap. $bn $m Laggards

Deutsche Telekom DTE GY Germany Telecom Services 187 292 Leaders Sovereignty / High US local content Data sovereignty is fueling demand for alternative platforms to those of
hyperscalers (i.e. AWS, Google, Oracle, and Microsoft), tailored more closely
to European government and business customers’ data sovereignty
requirements.
Orange ORA FP France Telecom Services 38 109 Leaders Sovereignty Data sovereignty is fueling demand for alternative platforms to those of
hyperscalers (i.e. AWS, Google, Oracle, and Microsoft), tailored more closely
to European government and business customers’ data sovereignty
requirements.
Telefonica TEF SQ Spain Telecom Services 30 54 Leaders Sovereignty Data sovereignty is fueling demand for alternative platforms to those of
hyperscalers (i.e. AWS, Google, Oracle, and Microsoft), tailored more closely
to European government and business customers’ data sovereignty
requirements.
Soitec SOI FP France Semiconductors & 2 10 Leaders Geopolitical distance Owns the core technology that commands a monopoly in specific applications
Equipment (notably RF front-end modules for smartphones), regardless of where the
devices are made. Soitec benefits from its ability to equally trade with the US
and China.
KION KGX GY Germany Capital Goods 7 17 Leaders Capex / High US local content Potential short-term negative impact from lower demand due to uncertainty;
long-term more likely a leader.
Segro SGRO LN UK Equity Real 13 22 Leaders Capex Industrial/logistics real estate owner with development expertise (two-thirds
Estate Investment exposure to the UK market).
WDP WDP BB Belgium Equity Real 6 9 Leaders Capex Industrial/logistics real estate owner with development expertise (Benelux
Estate Investment stronghold + Romania).
Ashtead AHT LN UK Capital Goods 25 47 Leaders Capex Equipment rental into US construction sites, reshoring should driver higher
construction and ongoing MRO work.
Bureau Veritas BVI FP France Commercial & 15 41 Leaders Capex Benefits from increasing testing and assurance due to changes in supply
Professional Serv. location, manufacturing process, more complex supply chains. Also has a
Building and Infra inspection business in the US.
Intertek ITRK LN UK Commercial & 10 27 Leaders Capex / rising supply chain Benefits from increasing testing and assurance due to changes in supply
Professional Serv. complexity location, manufacturing process, more complex supply chains. Also has a
building products testing business and energy inspection in the US.
SGS SGSN SE Switzerland Commercial & 20 45 Leaders Capex Benefits from increasing testing and assurance due to changes in supply
Professional Serv. location, manufacturing process, more complex supply chains.
Prysmian PRY IM Italy Capital Goods 20 95 Leaders High US content Encore (acquired by Prysmian) has long pursued a vertically integrated and
autarkic strategy and should thrive in a deglobalizing world.
Kuehne + Nagel KNIN SE Switzerland Transportation 28 62 Leaders Other / rising supply chain Would stand to benefit from complexity in supply chains. But excessively high
complexity tariffs would be a risk due to demand destruction.
DSV DSV DC Denmark Transportation 60 81 Leaders Other / rising supply chain Would stand to benefit from complexity in supply chains. But excessively high
complexity tariffs would be a risk due to demand destruction.
Assa Abloy ASSAB SS Sweden Capital Goods 36 64 Leaders High US content Already strong at a local level, we see Assa’s manufacturing scale conferring
an operational (cost) advantage unavailable to the national players.
Schneider Electric SU FP France Capital Goods 150 281 Leaders Capex Automation / electrification.
Siemens SIE GY Germany Capital Goods 200 377 Leaders Capex Its technologies are vital for Europe’s industrial and digital transformation.

56 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Name Ticker Country/ Industry Market 3m ADV Leaders/ Category Comment from Bernstein analysts (when available)
Region cap $bn $m Laggards

ABB ABBN SE Switzerland Capital Goods 108 175 Leaders Capex ABB is a Swiss-Swedish multinational corporation specialising in robotics,
power, and automation technologies. It supports Europe’s industrial
automation and energy efficiency initiatives.
ASM International ASM NA Netherlands Semiconductors & 30 89 Leaders Capex Front-end capital equipment.
Equipment
BE Semiconductors BESI NA Netherlands Semiconductors & 11 60 Leaders Capex Benefits from AI buildout, onshoring of advanced packaging fabs in the US
Equipment and Europe, and increased adoption of hybrid bonding and other next
generation assembly systems for new AI, logic, memory and consumer use
cases.
Holcim HOLN SE Switzerland Materials 68 139 Leaders Capex Post spin-off scheduled on 23 June, both businesses have strong growth
potential, streamlining strategies to suit the trends observed by geographies.
Amrize has local-for-local production, an attractive footprint in the North
American heartland, insulated from imports, and in concentrated markets with
very strong pricing power. Holcim, post spin-off, will focus on LatAm expansion
and continue decarbonization in Europe, leading to margin expansion.
Veolia Environment VIE FP France Utilities 26 87 Leaders Capex Water is essential for critical industries, such as chip manufacturing,
pharmaceuticals and data center cooling.
Rheinmetall RHM GY Germany Capital Goods 87 687 Leaders Sovereignty Benefits from rising defence spending.
Thales HO FP France Capital Goods 59 100 Leaders Sovereignty Benefits from rising European defence budgets and European repatriation
support.
Siemens Energy ENR GY Germany Capital Goods 76 252 Leaders Sovereignty Its technologies are vital for Europe’s energy infrastructure and the integration
of renewable energy into the grid.
Epiroc EPIA SS Sweden Capital Goods 26 24 Leaders Sovereignty Epiroc provides essential mining equipment and automation solutions
TotalEnergies TTE FP France Energy 139 301 Leaders Sovereignty European major, strategic for sovereignty. Energy security.
Enel ENEL IM Italy Utilities 92 262 Leaders Sovereignty As a leading multinational energy company, Enel operates in the generation
and distribution of electricity. It has a strong focus on renewable energy
sources, contributing significantly to Europe’s transition towards sustainable
energy.
Shell SHELL NA UK Energy 209 212 Leaders Sovereignty European major, strategic for sovereignty.Energy security.
Market capitalisation and average daily volume traded as of 10/06/2025. Source: Refinitiv, Bloomberg, SG Cross Asset Research/Equity Strategy, Bernstein Research.

Contributions from Bernstein analysts: Alasdair Leslie, Alastair Warr, Alex Irving, Alex Wang, Alexander Peterc, Aneesha Sherman, Annick Maas, Bartlomiej Kubicki, Bob Brackett, Chad Dillard, Courtney Breen, Daniel Roeska, Danilo Gargiulo,
David Dai, Delphine Le Louet, Douglas Harned, Eunice Lee, Eve Burstein, Florent Cespedes, Guillaume Delaby, Harry Martin, Harshita Rawat, Ian White, Irene Himona, Isobel Hettrick, Jacob Kruse, Jay Huang, Jorge Alonso Suils, Justin Smith,
Kenneth Suchoski, Lee Hambright, Lisa Clive, Luca Solca, Marios Pastou, Mark Li, Mark Moerdler, Mark Shmulik, Masahiro Akita, Melinda Hu, Miki Sogi, Nadine Sarwat, Neil Beveridge, Nicholas Green, Nikhil Nigania, Ottavio Adorisio, Peter Weed,
Philippe Lorrain, Pranav Gundlapalle, Pujarini Gosh, Qingyuan Lin, Richard Clarke, Richard Nguyen, Robin Zhu, Stefan Stalmann, Stephen Reitman, Susannah Ludwig, Venugopal Garre, Will Kirkness, William Woods, Zhihan Ma.

Companies not covered by Bernstein: Apple Inc, ASM International, COSCO SHIPPING Holdings Co Ltd, Electrolux B, Evergreen Marine Corp Taiwan L, Honeywell International Inc, Hyundai Motor Co, Informa, Kia Corp, Logitech, Nucor Corp,
Orient Overseas International, Panasonic Holdings Corp, Rheinmetall, Shenzhen Transsion Holdings Co, STMicroelectronics, Vulcan Materials Co, Wan Hai Lines Ltd, Yang Ming Marine Transport Cor, ZTE Corp"

DEGLOBALIZATION 57
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

EXHIBIT 87: New Global Trade Order Laggards (Universe of stocks)

Name Ticker Country/ Industry Market 3m ADV Leaders/ Category Comment from Bernstein analysts (when available)
Region cap. $bn $m Laggards

Corpay Inc CPAY US US Financial Services 25 158 Laggards Most at risk from tariffs 60% of its Corporate Payments segment is XB payments, some of which are
goods rather than services. Less global trade should impact part of that XB
business, particularly the goods portion. Copay is diversified across multiple
geographies but some of its markets will be impacted.
Paypal Holdings Inc PYPL US US Financial Services 73 686 Laggards Most at risk from tariffs PayPal's XB business is a teens percentage of TPV but likely a higher
percentage of gross profit as XB yields are higher. We think their XB business
skews more towards goods, so if less global trade, PayPal could be impacted.
Illumina Inc ILMN US 0 US Pharmaceuticals, 14 178 Laggards Additional competitive pressure The Chinese competitor to Illumina (Complete Genomics) has gained
Biotechnology considerable credibility within China (leading to an outright ban on Illumina
instruments sales in the country), as well as outside China; if / as they gain
strength in Europe, this will continue to put pressure on Illumina.
Microsoft Corp MSFT US US Software & 3489 9,490 Laggards Other If governments want local hyperscalers, MSFT Azure could feel pressurenear
Services term but over time they could offer Azure as services to local providers
Workday Inc-Class A WDAY US US Software & 68 537 Laggards Other Workday is in the Human Capital Management market globally but if
Services deglobalization occurs payroll and HCM could, more than other areas of
software feel pressure.
Okta Inc OKTA US US Software & 18 448 Laggards Other Downside: overall greater exposure to SMB, and 40% of revenues are
Services consumption-based, anchored to consumer online commerce, both of which
may perform more poorly in a deglobalization caused recession.
Zoom Communications Inc ZM US US Software & 24 180 Laggards Other Downside: nearly 50% of business indexed to consumer/SoHo buyers (Small
Services office / Home office), and on the business side, a large small business
operation... both with "free" competitors increasing churn / revenue risk in a
deglobalization caused recession.
Dollar Tree Inc DLTR US US Consumer 20 436 Laggards Efficiency loss DLTR’s direct import exposure is 41-43% (as % of COGS) and we estimate its
Staples overall import exposure is 50%+, with 85% of imports coming from China;
Distribution tariffs impact DLTR's margins and its ability to source unique items at low cost.
Target Corp TGT US US Consumer 46 822 Laggards Efficiency loss TGT’s overall import exposure is 50% (as % of COGS); tariffs impact TGT's
Staples margins and competitiveness in pricing in discretionary categories.
Distribution
Starbucks Corp SBUX US US Consumer 103 982 Laggards Additional competitive pressure Risk from anti-American sentiment, tariffs on product costs. Benefits from
Services exposure to high-income consumer.
McDonald's Corp MCD US US Consumer 215 1,100 Laggards Additional competitive pressure Risk from anti-American sentiment, exposure to low-income consumer.
Services
Brown-Forman Corp-Class BF/B US US Food, Beverage & 13 113 Laggards Most at risk from tariffs Highly exposed to PGIs (products with a geographical connection), with no
B Tobacco flexibility to meaningfully adapt supply chains or hubs of production.
Constellation Brands Inc-A STZ US US Food, Beverage & 30 378 Laggards Most at risk from tariffs Mexican imports make up a large proportion of STZ's portfolio – little flexibility
Tobacco to adapt supply chains and exposed to tariffs on imported beers.
GM GM US US Automobiles & 47 642 Laggards Efficiency loss Efficiency loss – GM relies on imports from South Korea.
Components
Stellantis STLA US US Automobiles & 30 183 Laggards Additional competitive pressure Competitive pressure: STLA is facing increased pressure in non-traditional
Components markets (but it does normally, so this may not increase due to tariffs).
Apple Inc AAPL US US Technology 3027 12,550 Laggards Most at risk from tariffs Affected by reshuffling of supply chain.
Hardware &
Equipment

58 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Name Ticker Country/ Industry Market 3m ADV Leaders/ Category Comment from Bernstein analysts (when available)
Region cap. $bn $m Laggards

Amazon.Com Inc AMZN US US Consumer 2295 9,447 Laggards Most at risk from tariffs China is home to around half of Amazon’s sellers, with over 100,000 Amazon
Discretionary businesses registered in Shenzen alone.
Distribution
Midea Group Co Ltd 300 HK China Consumer 80 71 Laggards Most at risk from tariffs 6% of Midea’s revenue is exposed to the US.
Durables &
Apparel
Haier Smart Home Co Ltd 6690 HK China Consumer 31 73 Laggards Most at risk from tariffs Around 20% of Haier’s revenue is exposed to the US.
Durables &
Apparel
CATL 300750 C2 China Capital Goods 155 783 Laggards Most at risk from tariffs US accounts for 10% of exports. Could be impacted by tariffs
COSCO SHIPPING 1919 HK China Transportation 33 66 Laggards Most at risk from tariffs Deteriorating supply-demand balance (slower demand growth in price-taking,
Holdings Co Ltd asset-heavy business)
Evergreen Marine Corp 2603 TT Taiwan Transportation 17 172 Laggards Most at risk from tariffs Deteriorating supply-demand balance (slower demand growth in price-taking
Taiwan L asset-heavy business)
Wan Hai Lines Ltd 2615 TT Taiwan Transportation 9 126 Laggards Most at risk from tariffs Deteriorating supply-demand balance (slower demand growth in price-taking,
asset-heavy business)
Yang Ming Marine 2609 TT Taiwan Transportation 8 130 Laggards Most at risk from tariffs Deteriorating supply-demand balance (slower demand growth in price-taking,
Transport Cor asset-heavy business).
Renesas 6723 JT Japan Semiconductors & 25 174 Laggards Additional competitive pressure Higher competition in China from local Chinese competitors.
Equipment
UMC 2303 TT Taiwan Semiconductors & 19 74 Laggards Additional competitive pressure Deglobalization prompts China to build much more capacity. UMC, without
Equipment notable tech differentiation, could suffer in a context of oversupply.
Vanguard Semi 5347 TT Taiwan Semiconductors & 6 26 Laggards Additional competitive pressure Deglobalization prompts China to build much more capacity. Vanguard,
Equipment without notable tech differentiation, could suffer in a context of oversupply.
Mazda Motor Corp 7261 JT Japan Automobiles & 4 59 Laggards Most at risk from tariffs Downturn in trade
Components
Hyundai Motor Co 005380 KP Korea Automobiles & 30 98 Laggards Most at risk from tariffs Downturn in trade
Components
Kia Corp 000270 KP Korea Automobiles & 27 71 Laggards Most at risk from tariffs Downturn in trade
Components
Orient Overseas 316 HK Hong Kong Transportation 11 28 Laggards Most at risk from tariffs Downturn in trade
International
GN Store Nord GN DC Denmark Consumer 2 16 Laggards Most at risk from tariffs Manufacturing for the Enterprise and Gaming divisions (together 6% of
Durables & revenues) is situated almost entirely in China, while US sales exposure is
Apparel strong. The group is working to shift away from China but there is risk on the
timing, execution, and cost of the shift
H&M HMB SS Sweden Consumer 23 47 Laggards Efficiency loss H&M may find a deglobalizing world increasingly challenging as the costs of
Discretionary production continues to increase and there are very few places to outsource to
Distribution that are cheaper than China or Bangladesh.
Swedbank SWEDA SS Sweden Banks 30 81 Laggards Other Swedbank is being investigated by the DOJ and other US regulators, a more
anti-EU stance in the US may increase litigation risk there.
Jyske Bank JYSK DC Denmark Banks 6 11 Laggards Most at risk from tariffs Jyske is fully focused on Denmark, the country is seeing adverse attention
from the US as part of Trump's ambitions for Greenland..

DEGLOBALIZATION 59
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Name Ticker Country/ Industry Market 3m ADV Leaders/ Category Comment from Bernstein analysts (when available)
Region cap. $bn $m Laggards

UBS UBSG SE Switzerland Financial Services 108 253 Laggards Efficiency loss / other (1) De-globalisation = less global growth = slower wealth creation = less
growth for the Swissies; (2) fragmented trade flows could trigger constraints on
capital flows – bad for a business that promises clients a global investment
proposition; (3) fragmentation of capital flows and regulation makes it more
difficult to run global banks (in terms of capital allocation, treasury operations,
ability to use offshore booking centres); (4) Swiss regulatory developments
may penalise foreign operations.
Julius Baer BAER SE Switzerland Financial Services 13 47 Laggards Efficiency loss / other (1) De-globalisation = less global growth = slower wealth creation = less
growth for the Swissies; (2) fragmented trade flows could trigger constraints on
capital flows – bad for a business that promises clients a global investment
proposition; (3) fragmentation of capital flows and regulation makes it more
difficult to run global banks (in terms of capital allocation, treasury operations,
ability to use offshore booking centres); (4) Swiss regulatory developments
may penalise foreign operations.
HSBC HSBA LN UK Banks 207 223 Laggards Most at risk from tariffs HSBC’s global footprint and trade-related revenues make it vulnerable to tariff-
led slowdowns, as geo-political tensions weigh on cross-border flows (such as
US-China shipments) and client activity.
UCB UCB BB Belgium Pharmaceuticals, 37 55 Laggards Most at risk from tariffs UCB is exposed to tariffs as its manufacturing sites are located in Europe and
Biotechnology the portfolio is concentrated (6% of growth driven by one drug: Bimzelx, with
the majority of sales in the US).
Infineon IFX GY Germany Semiconductors & 55 186 Laggards Additional competitive pressure Higher competition in China from local Chinese competitors.
Equipment
STMicroelectronics STMPA FP Switzerland Semiconductors & 27 71 Laggards Additional competitive pressure Higher competition in China from local Chinese competitors.
Equipment
Porsche P911 GY Germany Automobiles & 44 53 Laggards Most at risk from tariffs Manfucturing base predominantly in Germany ('Made in Germany' brand), vs
Components global client base.
Stellantis STLA UN Netherlands Automobiles & 30 26 Laggards Most at risk from tariffs Competitive pressure: STLA facing increased pressure in non-traditional
Components markets (but they would anyway, not sure this is elevated due to the tariffs)
AP Moller-Maersk MAERSKB Denmark Transportation 29 55 Laggards Most at risk from tariffs Deteriorating supply-demand balance (slower demand growth in price-taking,
DC asset-heavy business).
Informa INF LN UK Media & 14 29 Laggards Other Exposure to global visitors flows (International c 1% total) + exports.
Entertainment
RATIONAL RAA GY Germany Capital Goods 9 13 Laggards Efficiency loss / Most at risk c.2% of sales exposed to the US (in import terms); potential impact from
from tariffs higher costs likely mitigated by price increases; lower demand potentially in
the short term. Virtually all peers are importing combi-steamer ovens to the US
(only a smaller competitor assembles locally).
ABF ABF LN UK Food, Beverage & 20 23 Laggards Efficiency loss ABF/Primark, will find it increasingly challenging as the costs of production
Tobacco continue to increase and there are very few places to outsource too that are
cheaper than China and Bangladesh today
Pandora PNDORA Denmark Consumer 14 36 Laggards Most at risk from tariffs Most at risk from tariffs
DC Durables &
Apparel

60 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Name Ticker Country/ Industry Market 3m ADV Leaders/ Category Comment from Bernstein analysts (when available)
Region cap. $bn $m Laggards

Electrolux B ELUXB SS Sweden Consumer 2 19 Laggards Additional competitive pressure Strong underperformer on “Liberation Day”, at risk from additional competitive
Durables & pressures.
Apparel
Logitech LOGN SE Switzerland Technology 15 62 Laggards Most at risk from tariffs Consumer electronics.
Hardware &
Equipment
The Swatch Group UHR SE Switzerland Consumer 9 35 Laggards Most at risk from tariffs Most at risk from tariffs
Durables &
Apparel
LVMH MC FP France Consumer 271 384 Laggards Most at risk from tariffs Most diversely located in Luxury in terms of production centers. More complex
Durables & company too. But has scale advantage.
Apparel
EQT AB EQT SS Sweden Financial Services 37 37 Laggards Other “I think the risk that I am most concerned about is the geopolitical risk to us
[EQT], because that's [where] you can easily paint a very negative geopolitical
scenario. And in such a scenario where the whole logic for trade, for
international cooperation, if that goes away, goes back to where we came
from. Those risks, I would say, are more severe and difficult for us to manage
[than higher interest rates or the risks during the pandemic]” EQT Chair, Conni
Jonsson, in an interview to Bloomberg on 22 Oct. 2024. This comment likely
reflects risks to EQT's portfolio companies, and risk of higher borrowing costs,
which is inherently challenging for the private equity business model given the
use of leverage to acquire target companies.
Market Capitalisation and average daily volume traded as of 10/06/2025, Source: Refinitiv, Bloomberg, SG Cross Asset Research/Equity Strategy, Bernstein Research

Contributions from Bernstein analysts: Alasdair Leslie, Alastair Warr, Alex Irving, Alex Wang, Alexander Peterc, Aneesha Sherman, Annick Maas, Bartlomiej Kubicki, Bob Brackett, Chad Dillard, Chintan Joshi, Courtney Breen, Daniel Roeska, Danilo
Gargiulo, David Dai, Delphine Le Louet, Douglas Harned, Eunice Lee, Eve Burstein, Florent Cespedes, Guillaume Delaby, Harry Martin, Harshita Rawat, Ian White, Irene Himona, Isobel Hettrick, Jacob Kruse, Jay Huang, Jorge Alonso Suils, Justin
Smith, Kenneth Suchoski, Lee Hambright, Lisa Clive, Luca Solca, Marios Pastou, Mark Li, Mark Moerdler, Mark Shmulik, Masahiro Akita, Melinda Hu, Miki Sogi, Nadine Sarwat, Neil Beveridge, Nicholas Green, Nikhil Nigania, Ottavio Adorisio, Peter
Weed, Philippe Lorrain, Pranav Gundlapalle, Pujarini Gosh, Qingyuan Lin, Richard Clarke, Richard Nguyen, Robin Zhu, Stefan Stalmann, Stephen Reitman, Susannah Ludwig, Venugopal Garre, Will Kirkness, William Woods, Zhihan Ma

Companies not covered by Bernstein: Apple Inc, ASM International, COSCO SHIPPING Holdings Co Ltd, Electrolux B, Evergreen Marine Corp Taiwan L, Honeywell International Inc, Hyundai Motor Co, Informa, Kia Corp, Logitech, Nucor Corp,
Orient Overseas International, Panasonic Holdings Corp, Rheinmetall, Shenzhen Transsion Holdings Co, STMicroelectronics, Vulcan Materials Co, Wan Hai Lines Ltd, Yang Ming Marine Transport Cor, ZTE Corp

DEGLOBALIZATION 61
 COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

List of covered companies of the Bernstein equity research analyst(s) for which they certify their views under the US Securities and Exchange
Commission’s Regulation Analyst Certification: 002475.CH:Luxshare Precision Industry Co Ltd; 600690.CH:Haier Smart Home Co Ltd; 6146.JP:Disco Corp;
6690.HK:Haier Smart Home Co Ltd; 8035.JP:Tokyo Electron Ltd; 981.HK:Semiconductor Manufacturing International Corp; 9926.HK:Akeso Inc;
ADNOCDRI.UH:Adnoc Drilling; ASSAB.SS:Assa Abloy AB; BMW.GR:Bayerische Motoren Werke AG; BSX:Boston Scientific Corp; COIN:Coinbase Global Inc.;
COST:Costco Wholesale Corp; CTEC.LN:ConvaTec Group PLC; ETN:Eaton Corp PLC; F:Ford Motor Co; GM:General Motors Corp; HOOD:Robinhood Markets Inc;
HUBB:Hubbell Incorporated; ISRG:Intuitive Surgical Inc; ITRK.LN:Intertek Group PLC ; ITX.SM:Industria de Diseno Textil SA; LIN.UW:Linde plc ; LTTS.IN:L&T
Technology Services Ltd ; MC.FP:LVMH Moet Hennessy Louis Vuitton SE ; MCD:McDonald's Corp; ML.FP:Michelin; MSTR:Strategy Inc; NTPC.IN:NTPC Ltd;
PHG:Koninklijke Philips NV; PHIA.NA:Koninklijke Philips NV; PODD:Insulet Corporation; PRY.IM:Prysmian SpA; PWR:Quanta Services Inc ; SAP.GR:SAP SE;
SAP:SAP SE; SHL.GR:Siemens Healthineers AG; SN/.LN:Smith & Nephew PLC; SNN:Smith & Nephew PLC; SYK:Stryker Corp; TMO:Thermo Fisher Scientific Inc;
TSM:Taiwan Semiconductor Manufacturing Co Ltd; WAT:Waters Corp; WTB.LN:Whitbread PLC.

DISCLAIMER

This is a joint publication of Bernstein (as defined below) and SG.

References to "Bernstein" in these disclosures relate to the following entities: Bernstein Institutional Services LLC (from April 1, 2024 onwards),
Sanford C. Bernstein & Co., LLC (pre April 1, 2024), Bernstein Autonomous LLP, BSG France S.A. (from April 1, 2024 onwards), Sanford C.
Bernstein (Hong Kong) Limited 盛博香港有限公司, Sanford C. Bernstein (Canada) Limited, Sanford C. Bernstein (India) Private Limited (SEBI
registration no. INH000006378), Sanford C. Bernstein (Singapore) Private Limited and Sanford C. Bernstein Japan KK (サンフォード・C・バーン
スタイン株式会社).
On April 1, 2024, Société Générale (SG) and AllianceBernstein, L.P. (AB) completed a transaction that created a new joint venture in which their
respective cash equities and research businesses operate in a new business combination. Although their respective ownership percentages in the
joint venture differ between North America and the rest of the world, the creation, production and publication of research is handled collaboratively
on a global basis across the two research brands, “Bernstein” and “Autonomous”. Unless specifically noted otherwise, for the purposes of these
disclosures, references to Bernstein’s “affiliates” relate to both SG and AB and their respective affiliates.
VALUATION METHODOLOGY
This research publication covers six or more companies. For valuation methodology and other company disclosures:
Please visit: https://bernstein-autonomous.bluematrix.com/sellside/Disclosures.action.
Or, you can also write to the Director of Compliance, Bernstein Institutional Services LLC, 245 Park Avenue, New York, NY 10167.
RISKS
This research publication covers six or more companies. For risks and other company disclosures:
Please visit: https://bernstein-autonomous.bluematrix.com/sellside/Disclosures.action.
Or, you can also write to the Director of Compliance, Bernstein Institutional Services LLC, 245 Park Avenue, New York, NY 10167.

RATINGS DEFINITIONS, BENCHMARKS AND DISTRIBUTION

Bernstein brand
Bernstein rates stocks based on forecasts of relative performance for the next 6-12 months versus the S&P 500 for stocks listed on the U.S. and
Canadian exchanges, versus the Bloomberg Europe Developed Markets Large and Mid Cap Price Return Index (EDM) for stocks listed on the
European exchanges and emerging markets exchanges outside of the Asia Pacific region, versus the Bloomberg Japan Large and Mid-Cap Price
Return Index USD (JP) for stocks listed on the Japanese exchanges, and versus the Bloomberg Asia ex-Japan Large and Mid-Cap Price Return
Index (ASIAX) for stocks listed on the Asian (ex-Japan) exchanges -unless otherwise specified.
The Bernstein brand has three categories of ratings:
• Outperform: Stock will outpace the market index by more than 15 pp
• Market-Perform: Stock will perform in line with the market index to within +/-15 pp
• Underperform: Stock will trail the performance of the market index by more than 15 pp
Coverage Suspended: Coverage of a company under the Bernstein research brand has been suspended. Ratings and price targets are suspended
temporarily, are no longer current, and should therefore not be relied upon.
Not Rated: A rating assigned when the stock cannot be accurately valued, or the performance of the company accurately predicted, at the present
time. The covering analyst may continue to publish research reports on the company to update investors on events and developments

Autonomous brand
The Autonomous brand rates stocks as indicated below. As our benchmarks we use the Bloomberg Europe 500 Banks And Financial Services
Index (BEBANKS) and Bloomberg Europe Dev Mkt Financials Large and Mid Cap Price Ret Index EUR (EDMFI) index for developed European
banks and Payments, the Bloomberg Europe 500 Insurance Index (BEINSUR) for European insurers, the S&P 500 and S&P Financials for US
banks and Payments coverage, S5LIFE for US Insurance, the S&P Insurance Select Industry (SPSIINS) for US Non-Life Insurers coverage, and

62 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

the Bloomberg Emerging Markets Financials Large, Mid and Small Cap Price Return Index (EMLSF) for emerging market banks and insurers and
Payments. Ratings are stated relative to the sector (not the market).
The Autonomous brand has three categories of ratings:
• Outperform (OP): Stock will outpace the relevant index by more than 10 pp
• Neutral (N): Stock will perform in line with the market index to within +/-10 pp
• Underperform (UP): Stock will trail the performance of the relevant index by more than 10 pp
Coverage Suspended: Coverage of a company under the Bernstein research brand has been suspended. Ratings and price targets are suspended
temporarily, are no longer current, and should therefore not be relied upon.
Not Rated: A rating assigned when the stock cannot be accurately valued, or the performance of the company accurately predicted, at the present
time. The covering analyst may continue to publish research reports on the company to update investors on events and developments.
Those denoted as ‘Feature’ (e.g., Feature Outperform FOP, Feature Under Outperform FUP) are our core ideas. Not Rated (NR) is applied to
companies that are not under formal coverage.
Horizon and classification
For both brands, recommendations are based on a 12-month time horizon.
DISTRIBUTION OF RATINGS/INVESTMENT BANKING SERVICES

As of April 9, 2025. All figures are updated quarterly.

PRICE CHARTS/ RATINGS AND PRICE TARGET HISTORY

This research publication covers six or more companies. For price chart and other company disclosures, please visit https://bernstein-
autonomous.bluematrix.com/sellside/Disclosures.action or you can write to the Director of Compliance, Bernstein Institutional Services LLC, 245
Park Avenue, New York, NY 10167.
CONFLICTS OF INTEREST
SG and/or an affiliate is acting as Joint Active Bookrunner in Linde plc's triple tranche bond issue (EUR 6Y/10Y/20Y).
SG and/or an affiliate acted as Global Coordinator in Compagnie Générale des Établissements Michelin SCA's bond issue (EUR 1bn, 7y and 12y).
SG and/or affiliate(s) acted as Joint Bookrunner in Koninklijke Philips N.V's bond issue (EUR, Bmk, 5y & 10y)
Bernstein Autonomous LLP or BSG France SA, beneficially, has either a net long or short position of 0.5% or more of the total issued share capital
of a class of common equity securities of the following MiFID eligible securities: Eaton Corp PLC, Prysmian SpA, Costco Wholesale Corp, Thermo
Fisher Scientific Inc, Waters Corp, ConvaTec Group PLC, Intuitive Surgical Inc and Stryker Corp.
SG and/or its affiliates beneficially own 1% or more of a class of common equity securities of the following companies: Intertek Group PLC, Whitbread
PLC and Tokyo Electron Ltd.
AB and/or its affiliates beneficially own 1% or more of a class of common equity securities of the following companies: Prysmian SpA, Waters Corp,
ConvaTec Group PLC, Intuitive Surgical Inc and Stryker Corp.
Bernstein and/or affiliates have received compensation for investment banking services in the past twelve months from Linde plc.
Bernstein and/or affiliates have received compensation for investment banking services in the past twelve months from Assa Abloy AB.
Bernstein and/or affiliates have received compensation for investment banking services in the past twelve months from Michelin.
Bernstein and/or affiliates have received compensation for investment banking services in the past twelve months from General Motors Corp.
Bernstein and/or affiliates have received compensation for investment banking services in the past twelve months from McDonald's Corp.
Bernstein and/or affiliates have received compensation for investment banking services in the past twelve months from LVMH Moet Hennessy Louis
Vuitton SE.
Bernstein and/or affiliates have received compensation for investment banking services in the past twelve months from Koninklijke Philips NV.
Bernstein and/or affiliates have received compensation for investment banking services in the past twelve months from Siemens Healthineers AG.
Bernstein and/or affiliates have received compensation for investment banking services in the past twelve months from Boston Scientific Corp.
Bernstein and/or affiliates have received compensation for investment banking services in the past twelve months from Strategy Inc.

DEGLOBALIZATION 63
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

An affiliate of Bernstein has received compensation for non-investment banking securities-related products or services in the previous twelve months
from the following clients: Linde plc, Prysmian SpA, Bayerische Motoren Werke AG, Ford Motor Co and Industria de Diseno Textil SA.
Bernstein and/or affiliates have received compensation for non-investment banking securities-related products or services in the previous twelve
months from the following clients: Linde plc, Assa Abloy AB, Michelin, L&T Technology Services Ltd, Bayerische Motoren Werke AG, Ford Motor
Co, General Motors Corp, McDonald's Corp, Costco Wholesale Corp, LVMH Moet Hennessy Louis Vuitton SE, Thermo Fisher Scientific Inc,
Koninklijke Philips NV, Siemens Healthineers AG, Smith & Nephew PLC, Boston Scientific Corp, Stryker Corp, Strategy Inc and SAP SE.
Bernstein has received compensation for non-investment banking securities-related products or services in the previous twelve months from the
following clients: Strategy Inc.
Bernstein and/or affiliates expect to receive or intend to seek compensation for investment banking services in the next three months from Assa
Abloy AB, Michelin, Siemens Healthineers AG and Strategy Inc.
Affiliates of Bernstein managed or co-managed in the past twelve months a public offering of securities of Linde plc, Michelin, General Motors Corp,
McDonald's Corp, LVMH Moet Hennessy Louis Vuitton SE, Koninklijke Philips NV and Strategy Inc.
Bernstein and/or affiliates had an investment banking client relationship during the past twelve months with Linde plc, Assa Abloy AB, Michelin,
General Motors Corp, McDonald's Corp, LVMH Moet Hennessy Louis Vuitton SE, Koninklijke Philips NV, Siemens Healthineers AG, Boston
Scientific Corp and Strategy Inc.
Certain affiliates of Bernstein act as market maker or liquidity provider in the equities securities of: Linde plc, Eaton Corp PLC, Hubbell Incorporated,
Quanta Services Inc, Assa Abloy AB, Intertek Group PLC, Prysmian SpA, Michelin, Bayerische Motoren Werke AG, Ford Motor Co, General Motors
Corp, Whitbread PLC, McDonald's Corp, Costco Wholesale Corp, LVMH Moet Hennessy Louis Vuitton SE, Coinbase Global Inc., Robinhood
Markets Inc, Thermo Fisher Scientific Inc, Waters Corp, Koninklijke Philips NV, Siemens Healthineers AG, Smith & Nephew PLC, ConvaTec Group
PLC, Intuitive Surgical Inc, Stryker Corp, Insulet Corporation, Industria de Diseno Textil SA and SAP SE.
Certain affiliates of Bernstein act as market maker or liquidity provider in the debt securities of: Linde plc, Eaton Corp PLC, Michelin, Bayerische
Motoren Werke AG, Ford Motor Co, General Motors Corp, McDonald's Corp, LVMH Moet Hennessy Louis Vuitton SE, Thermo Fisher Scientific Inc,
Koninklijke Philips NV, Siemens Healthineers AG, Boston Scientific Corp and Stryker Corp.
Nikhil Nigania maintains a long position in Rural Electrification Corp in addition to a long position in Reliance Industries.
Gautam Chhugani maintains long positions in various crypto currencies.
Rupal Agarwal has a financial interest in the debt or equity securities of Coinbase Global Inc. (COIN).
Richard J. Clarke has a financial interest in the debt or equity securities of Assa Abloy AB, Koninklijke Philips NV and Industria de Diseno Textil SA
(ASSAB.SS, PHG, PHIA.NA and ITX.SM).
Zhihan Ma has a financial interest in the debt or equity securities of McDonald's Corp (MCD).
Trevor Stirling has a financial interest in the debt or equity securities of Koninklijke Philips NV and Smith & Nephew PLC (PHG, PHIA.NA, SNN and
SN/.LN).
William Woods has a financial interest in the debt or equity securities of Intuitive Surgical Inc (ISRG)
OTHER MATTERS
The legal entity(ies) employing the analyst(s) listed in this report, and their location, can be determined by the country code of their phone number,
as follows:
For Bernstein Analysts For SG Analysts

+1 Bernstein Institutional Services LLC (“BIS”); New York, New York, +33 Societe Generale; Paris, France
USA +44 SG London; London UK
+44 Bernstein Autonomous LLP; London, UK +1 SG New York or SG Americas Securities LLC , New York, USA
+33 BSG France S.A.; Paris, France +852 SG Hong Kong; Hong Kong, China
+34 BSG France S.A; Madrid, Spain +81 SG Securities Japan Ltd; Tokyo, Japan
+41 Bernstein Autonomous LLP; Geneva, Switzerland +91 Societe Generale Global Solution Centre Pvt Ltd; Bangalore,
+49 BSG France S.A.; Frankfurt, Germany India
+91 Sanford C. Bernstein (India) Private Limited; Mumbai, India +49 Societe Generale; Frankfurt, Germany
+852 Sanford C. Bernstein (Hong Kong) Limited 盛博香港有限公司; +34 Societe Generale; Madrid, Spain
Hong Kong, China +39 Societe Generale; Milan, Italy
+65 Sanford C. Bernstein (Singapore) Private Limited; Singapore +41 Societe Generale; Geneva, Switzerland
+81 Sanford C. Bernstein Japan KK; Tokyo, Japan +82 SG Securities Korea Co., Ltd; Seoul, South Korea
+48 Societe Generale; Warsaw, Poland
+212 Societe Generale Africa Technologis & Services; Casablanca,
Morocco

64 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Where this report has been prepared by research analyst(s) employed by a non-US affiliate, such analyst(s), is/are (unless otherwise expressly
noted below) not registered as associated persons of Bernstein Institutional Services LLC or any other SEC registered broker-dealer and are not
licensed or qualified as research analysts with FINRA. Accordingly, such analyst(s) may not be subject to FINRA’s restrictions regarding (among
other things) communications by research analysts with a subject company, interactions between research analysts and investment banking
personnel, participation by research analysts in solicitation and marketing activities relating to investment banking transactions, public appearances
by research analysts, and trading securities held by a research analyst account.
CERTIFICATION
Each Bernstein research analyst listed in this report, who is primarily responsible for the preparation of the content of this report, certifies that all of
the views expressed in this publication accurately reflect that analyst's personal views about any and all of the subject securities or issuers and that
no part of that analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views in this publication.
Each SG author of this research report listed on the cover hereby certifies that the views expressed in the research report accurately reflect his or
her personal views, including views about subject securities or issuers mentioned in the report, if any. No part of his or her compensation was, is or
will be related, directly or indirectly to the specific recommendations or views expressed in this report. The analyst(s) who author research are
employed by SG and its affiliates in locations, including but not limited to, Paris, London, New York, Hong Kong, Tokyo, Bangalore, Frankfurt,
Madrid, Seoul, and Casablanca.
Kevin Redureau's historical MAD2MAR recommendations over the past 12 months.
Manish Kabra's historical MAD2MAR recommendations over the past 12 months.
Roland Kaloyan's historical MAD2MAR recommendations over the past 12 months.
Charles de Boissezon's historical MAD2MAR recommendations over the past 12 months.
Makhdoom Muteeb Raina's historical MAD2MAR recommendations over the past 12 months.
Rajat Agarwal's historical MAD2MAR recommendations over the past 12 months.
Frank Benzimra's historical MAD2MAR recommendations over the past 12 months.

II. ADDITIONAL GLOBAL CONFLICT DISCLOSURES

CONFLICTS OF INTEREST
SG Content
The SG Content contains the views, opinions and recommendations of SG credit research analysts and / or strategists who are either employed by
SG or one of its affiliates. To the extent that SG credit research analysts and / or strategists have presented trade ideas based on macro views of
economic market conditions or relative value, such trade ideas may differ from the views and opinions of other departments of SG and SG affiliated
companies.
SG credit research analysts and / or strategists routinely consult with SG Sales and Trading Desks to obtain market information including, but not
limited to, pricing, spread levels and trading activity of a specific fixed income security or financial instrument, sector or other asset class.
SG Trading
SG Trading Desks may trade, or have traded, as principal on the basis of the research analyst(s) views and reports.
SG may make a market and trade as principal in equities, fixed income or debt securities which are the subject of research reports published by
SG, and their affiliated companies in the SG Group and may hold equity or debt securities positions or related derivatives.
SG does deal, trade in, profit from, hold, act as market-makers or advisers, brokers or bankers in relation to the securities, or derivatives thereof, of
firms or entities mentioned in this report and may be represented on the board of such firms or entities.
SG Compensation Arrangements
SG research analysts receive compensation based, in part, on the quality and accuracy of their analysis, client feedback, competitive factors and
SG’s total revenues, which would include, along with other revenue, revenue from sales and trading and investment banking No part of the SG
financial analysts’ compensation was, is, or will be related, directly or indirectly, to the specific recommendations or views expressed in this report.
Bernstein Compensation Arrangements
Analysts are compensated based on aggregate contributions to the research franchise as measured by account penetration, productivity and
proactivity of investment ideas. No analysts are compensated based on performance in, or contributions to, generating investment banking
revenues.
Policies
Policies and procedures are in place which are designed to:
(i) ensure that research reports are based on reliable information; and
(ii) prevent improper selective or tiered dissemination of research reports.
Coverage
It is at the sole discretion of Bernstein as to when to initiate, update and cease research coverage. Bernstein has established, maintains and relies
on information barriers to control the flow of information contained in one or more areas into other areas, units, groups or affiliates.

DEGLOBALIZATION 65
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Bernstein and SG Conflicts (Americas Only)

As required by applicable rules and regulations or at the discretion of BIS and / or SG Americas Securities, LLC (“SGAS”), research reports are
reviewed by supervisory analysts at BIS who are dually registered with FINRA as associated persons of each of BIS and SGAS.
SGAS is not an advisory client of BIS, but other business relationships exist between BIS and SGAS.
BIS has engaged SGAS to refer potential clients to BIS and SGAS is paid a fee for such referrals. Such fees are based on the revenue BIS earns
from the referred clients (“Referral Fees”).
Referral Fees are a strong economic incentive for SGAS to refer clients to BIS. Prospective clients of SGAS should be aware that SGAS is therefore
subject to certain conflicts of interest, including an incentive to recommend BIS over other service providers which either pay SGAS lower fees on
a client-by-client basis or in aggregate or do not pay any fees for referring clients.
Bernstein Analysts
This report has been produced by an independent analyst as defined in Article 3 (1)(34)(i) of EU 596/2014 Market Abuse Regulation (“MAR”) and
the same article of MAR as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.

III. OTHER IMPORTANT INFORMATION AND DISCLOSURES

The content in this report has been produced in accordance with the regulatory provisions concerning investment research which apply to it and is
not intended to be a marketing communication.
SG has organizational arrangements and information barriers in place to ensure the objectivity and independence of financial analysts and the
investment research they produce. Information concerning conflicts of interest and SG’s management of such conflicts is contained in SG’s Policies
for Managing Conflicts of Interests in Connection with Investment Research which is available at: https://insight-
public.sgmarkets.com/compliance/equity. Information concerning conflicts of interest and Bernstein’s management of such conflicts is available at
www.bernsteinresearch.com.
Employees of SG or Bernstein, or individuals connected to them, may from time to time have a position in or hold any of the investments or related
investments mentioned in this report.
Though material contained in this report is believed to be reliable and has been obtained from public sources believed to be reliable, neither SG
nor Bernstein, any representatives, directors, employees of SG or Bernstein nor any other entities affiliated with SG or Bernstein make any
representations or warranties, expressed or implied, with respect to the completeness or accuracy of any of the information contained in this report
or any other information (whether communicated in written or oral form) transferred or made available to you.
The views of Bernstein and SG reflected in this report may change without notice.
Bernstein produces a number of different types of research products including, among others, fundamental analysis and quantitative analysis under
both the “Autonomous” and “Bernstein” brands. Recommendations contained within one type of research product or under one brand may differ
from recommendations contained within other types of research products or under a different brand, whether as a result of differing time horizons,
methodologies or otherwise. Research Ratings System for the “Autonomous” and “Bernstein” brands and other information related to those Rating
Systems are included in the previous section. Autonomous operates as a separate business unit within the following entities: Bernstein Institutional
Services LLC, Bernstein Autonomous LLP, Sanford C. Bernstein (Hong Kong) Limited 盛博香港有限公司 and Sanford C. Bernstein (India) Private
Limited. For information relating to “Autonomous” branded products (including certain Sales materials) please visit www.autonomous.com. For
information relating to Bernstein branded products please visit: www.bernsteinresearch.com. Neither Bernstein nor SG are under any obligation to
ensure that such other reports are brought to the attention of any recipient of this report.
Where the views presented in this report differ from any previous reports concerning the same financial instrument or issuer that has been
disseminated during the preceding 12-month period, the change(s) and the date of that previous recommendation will be indicated.
Any past performance or simulated past performance contained in this report is not a reliable indicator of future performance. Forecasts of future
performance are based on assumptions that may not be realized and are not a reliable indicator of future performance.
To the maximum extent possible at law, neither Bernstein nor SG accepts any liability whatsoever arising from the use of the material or information
contained herein.
The information herein is not intended to be an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities or financial instruments.
Investments in general involve numerous risks, including, among others, market, counterparty default and liquidity risk. The value of securities and
financial instruments is subject to currency exchange rate fluctuation that may have a positive or negative effect on the price of such securities or
financial instruments, and investors in securities and financial instruments assume this risk.
Neither Bernstein nor SG have provided any advice, including personal recommendations, investment advice or tax advice. The financial
instruments discussed in this report may not be suitable for all investors and investors must make their own informed decisions and seek their own
advice regarding the appropriateness of investing in financial instruments or implementing strategies discussed herein. This report is not intended
for use by or targeted to retail customers.

66 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Notice to U.S. Investors

SG Clients
For purposes of SEC Rule 15a-6, SG Americas Securities LLC (“SGAS”) takes responsibility for this research report. This report is intended for
institutional investors only. Any U.S. person wishing to discuss this report or effect transactions in any security discussed herein should do so with
or through SGAS, a U.S. registered broker-dealer and futures commission merchant (FCM). SGAS is a member of FINRA, NYSE and NFA. Its
registered address at 245 Park Avenue, New York, NY, 10167. (212)-278-6000.
Bernstein Clients
Bernstein Institutional Services LLC (“BIS”), a broker-dealer registered with the U.S. Securities and Exchange Commission and a member of FINRA
is distributing this report in the United States and accepts responsibility for its contents. Where this material contains an analysis of debt product(s),
such material is intended only for institutional investors and is not subject to the US independence and disclosure standards applicable to debt
research prepared for retail investors. BIS may act as principal for its own account or as agent for another person (including an affiliate) in sales or
purchases of any security which is a subject of this report. This report does not purport to meet the objectives or needs of any specific individuals,
entities or accounts.
Notice to U.K. Investors
SG Clients
Societe Generale is a French credit institution (bank) authorised by the Autorité de Contrôle Prudentiel (the French Prudential Control Authority)
and is subject to limited regulation by the UK’s Financial Conduct Authority and Prudential Regulation Authority.
Bernstein Clients
This report has been issued or approved for issue in the United Kingdom by Bernstein Autonomous LLP, authorised and regulated by the Financial
Conduct Authority and located at 60 London Wall, London EC2M 5SH, +44 (0)20-7170-5000. Registered as a limited liability partnership in England
& Wales with company number OC343985.
This report is for distribution only to persons who meet one or more of the following:
(i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”);
(ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations, etc.”) of the Financial
Promotion Order;
(iii) are outside the United Kingdom; or
(iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA)
in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated,
(all such persons together being referred to as “relevant persons”).
This report is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or
investment activity to which this report relates is available only to relevant persons and will be engaged in only with relevant persons.
Notice to EU Investors who are Bernstein Clients
This report has been issued or approved for issue to readers in the member states of the EEA by BSG France S.A., which is authorised and
regulated by the Autorité de Contrôle Prudentiel et de Résolution (“ACPR”) and Autorité des marchés financiers (“AMF”).
Notice to French Investors who are SG Clients
This report is issued in France by or through SG which is authorised and supervised by the ACPR and regulated by the AMF.
Notice to Polish Investors who are SG Clients
This report has been issued in Poland by Societe Generale S.A. Oddzial w Polsce (the “Branch”) with its registered office in Warsaw (Poland) at
111 Marszałkowska St. The Branch is supervised by the Polish Financial Supervision Authority and the ACPR. This report is addressed to financial
institutions only, as defined in the Act [of 29 July 2005 on Trading in Financial Instruments] on trading in financial instruments. The Branch certifies
that this report has been elaborated with due diligence and care.
Notice to Hong Kong Investors
This report is distributed or circulated in Hong Kong only to “professional investors” as defined in the Securities and Futures Ordinance (Chapter
571 of the Laws of Hong Kong) (“SFO”).
SG Clients
Any such professional investor wishing to discuss this report or take any action in connection with it should contact SG Securities (HK) Limited. This
report does not constitute a solicitation or an offer of securities or an invitation to the public within the meaning of the SFO.
Bernstein Clients
This report is being distributed in Hong Kong by Sanford C. Bernstein (Hong Kong) Limited 盛博香港有限公司, which is licensed and regulated by
the Hong Kong Securities and Futures Commission (Central Entity No. AXC846) to carry out Type 4 (Advising on Securities) regulated activities
and subject to the licensing conditions mentioned in the SFC Public Register (https://www.sfc.hk/publicregWeb/corp/AXC846/details)).

DEGLOBALIZATION 67
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Notice to Singapore Investors

This report is provided only to accredited investors, expert investors and institutional investors, as defined in Section 4A of the Securities and
Futures Act 2001 of Singapore, Cap. 289.
SG Clients
This report is being distributed in Singapore by or through SG, Singapore Branch. Recipients of this report should contact Société Générale,
Singapore Branch in respect of any matters arising from, or in connection with, this report. If you are an accredited investor or expert investor,
please be informed that in SG's dealings with you, SG is relying on the following exemptions to the Financial Advisers Act, Cap. 110 (“FAA”): (1)
the exemption in Regulation 33 of the Financial Advisers Regulations (“FAR”), which exempts SG from complying with Section 25 of the FAA on
disclosure of product information to clients; (2) the exemption set out in Regulation 34 of the FAR, which exempts SG from complying with Section
27 of the FAA on recommendations; and (3) the exemption set out in Regulation 35 of the FAR, which exempts SG from complying with Section 36
of the FAA on disclosure of certain interests in securities.
Bernstein Clients
This report is being distributed in Singapore by Sanford C. Bernstein (Singapore) Private Limited. Recipients in Singapore should contact Sanford
C. Bernstein (Singapore) Private Limited in respect of matters arising from, or in connection with, this report. Sanford C. Bernstein (Singapore)
Private Limited is regulated by the Monetary Authority of Singapore and licensed under the SFA as a capital markets services license holder for
dealing in capital markets products that are securities and collective investment schemes and an exempt financial adviser for advising on, issuing
and promulgating analyses and reports on securities. Sanford C. Bernstein (Singapore) Private Limited is registered in Singapore with Company
Registration No. 20213710W and located at One Raffles Quay, #27-11 South Tower, Singapore 048583, +65-6230-4612.
Notice to readers in the People’s Republic of China
The securities referred to in this report are not being offered or sold and may not be offered or sold, directly or indirectly, in the People's Republic
of China (for such purposes, not including the Hong Kong and Macau Special Administrative Regions or Taiwan, (the “PRC”)) in contravention of
any applicable laws of the PRC.
This report does not constitute an offer to sell or the solicitation of an offer to buy any securities in the PRC to any person to whom it is unlawful to
make the offer or solicitation in the PRC.
We do not represent that this report may be lawfully distributed, or that any securities may be lawfully offered, in compliance with any applicable
registration or other requirements in the PRC, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any
such distribution or offering. In particular, no action has been taken by us which would permit a public offering of any securities or distribution of this
report in the PRC. Accordingly, the securities are not being offered or sold within the PRC by means of this report or any other report. Neither this
report nor any advertisement or other offering material may be distributed or published in the PRC, except under circumstances that will result in
compliance with any applicable laws and regulations.
Notice to Japanese Investors
SG Clients
This report is distributed in Japan by Societe Generale Securities Japan Limited, which is regulated by the Financial Services Agency of Japan.
This report is intended only for the Specified Investors, as defined by the Financial Instruments and Exchange Law in Japan and only for those
people to whom it is sent directly by Societe Generale Securities Japan Limited, and under no circumstances should it be forwarded to any third
party. The products mentioned in this report may not be eligible for sale in Japan and they may not be suitable for all types of investors.
Bernstein Clients
This report is being distributed in Japan by Sanford C. Bernstein Japan KK (サンフォード・C・バーンスタイン株式会社), which is registered in
Japan as a Financial Instruments Business Operator with the Kanto Local Finance Bureau (registration number: The Director-General of Kanto
Local Finance Bureau (FIBO) No.3387) and regulated by the Financial Services Agency. It is also a member of Japan Investment Advisers
Association. This report is solely for qualified institutional investors in Japan only, as defined in Article 2, paragraph (3), items (i) of the Financial
Instruments and Exchange Act.
For the institutional client readers in Japan who have been granted access to the Bernstein website by Daiwa Securities Group Inc. (“Daiwa”), your
access to this report should not be construed as meaning that Bernstein is providing you with investment advice for any purposes. Whilst Bernstein
has prepared this report, your relationship is, and will remain with, Daiwa, and Bernstein has neither any contractual relationship with you nor any
obligations towards you.
Notice to Australian Investors:
The information contained in this report is only directed to recipients who are wholesale clients as defined in section 761G of the Corporations Act
2001 (“Corporations Act”).
For Reports distributed In Australia by SG Securities (HK) Limited
This report is distributed by SG Securities (HK) Limited, a Registered Foreign Company and Foreign Financial Services Provider in Australia (ARBN
126058688) that is exempt from the requirement to hold an Australian financial services licence under the Corporations Act. SG Securities (HK)

68 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

Limited is regulated by the Securities and Futures Commission under Hong Kong laws, which differ from Australian laws. The information contained
in this report is only directed to recipients who are wholesale clients as defined under the Corporations Act.
For Reports Distributed in Australia by SG Sydney Branch
This report is distributed by SG (ABN 71 092 516 286). SG holds an AFSL no. 511956 issued under the Corporations Act. SGis a foreign Authorised
Deposit-Taking Institution under the Banking Act 1959 (Cth).
Bernstein Clients
Sanford C. Bernstein (Hong Kong) Limited 盛博香港有限公司 is responsible for distributing research in Australia. It is regulated by the Securities
and Futures Commission Securities and Exchange Commission under Hong Kong laws which differ from Australian laws. U.S. laws, by the Financial
Conduct Authority under U.K. laws,. Sanford C. Bernstein (Hong Kong) Limited 盛博香港有限公司 is exempt from the requirement to hold an
Australian financial services license under the Corporations Act in respect of the provision of the following financial services to wholesale clients:
• providing financial product advice;
• dealing in a financial product;
• making a market for a financial product; and
• providing a custodial or depository service.
Notice to Canadian Investors
This report may not be passed onto any person in Canada unless that person qualifies as "permitted client" as defined in Section 1.1 of National
Instrument 31-103.
SG Clients
This report is for information purposes only and is intended for use by Permitted Clients, as defined under National Instrument 31-103, Accredited
Investors, as defined under National Instrument 45-106, Accredited Counterparties as defined under the Derivatives Act (Québec) and "Qualified
Parties" as defined under the ASC, BCSC, SFSC and NBSC Orders.
Bernstein Clients
If this report pertains to a Canadian domiciled company, it is being distributed in Canada by Sanford C. Bernstein (Canada) Limited, which is
licensed and regulated by the Canadian Investment Regulatory Organization. If the report pertains to a non-Canadian domiciled company, it is
being distributed by Bernstein Institutional Services LLC, which is licensed and regulated by both the SEC and FINRA, into Canada under the
International Dealers Exemption.
Notice to Indian Investors
SG Clients
Societe Generale Global Solution Center Pvt. Ltd (SG GSC) is a 100% owned subsidiary of Societe Generale, SA, Paris. Societe Generale SA is
authorised and supervised by the ACPR and regulated by the AMF. Analysts employed by SG GSC do not produce research covering securities
listed on any stock exchange recognised by the Securities and Exchange Board of India (SEBI) and is not licensed by either SEBI or the Reserve
Bank of India.
Bernstein Clients
This report is being distributed in India by Sanford C. Bernstein (India) Private Limited (SCB India) which is licensed and regulated by SEBI as a
research analyst entity under the SEBI (Research Analyst) Regulations, 2014, having registration no. INH000006378/ BSE Enlistment No. 6238
and as a stock broker having registration no. INZ000213537. SCB India is currently engaged in the business of providing research and stock broking
services. Please refer to www.bernsteinresearch.in for more information.
• SCB India is a private limited company incorporated on April 12, 2017 under the Companies Act, 2013 bearing corporate
identification number U65999MH2017FTC293762, and registered office at Level 3A, 4th Floor, First International Financial
Centre, Plot Nos C-54 and C-55, G Block, Near CBI Office, Bandra Kurla Complex, Bandra (East), Mumbai 400098,
Maharashtra, India (Phone No: +91-22-68421401).
• For details of SCB India affiliates/group companies, kindly email [email protected].
• SCB India does not have any disciplinary history as at the date of this report.
• Except as noted above, SCB India and/or its affiliates/group companies, the Research Analysts authoring this report, and their
relatives:
o do not have any financial interest in the subject company;
o do not have actual/beneficial ownership of one percent or more in securities of the subject company;
o is not engaged in any investment banking activities for Indian companies;
o have not managed or co-managed a public offering in the past twelve months for any Indian companies;
o have not received any compensation for investment banking services or merchant banking services from the subject
company in the past 12 months;
o have not received compensation for brokerage services from the subject company in the past twelve months;

DEGLOBALIZATION 69
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

o have not received any compensation or other benefits from the subject company or third party related to the specific
recommendations or views in this report;
o do not currently, but may in the future, act as a market maker in the financial instruments of the companies covered in the
report; and
o do not have any conflict of interest in the subject company as of the date of this report.
• Except as noted above, the company/companies that is/are subject of this report has not been a client of SCB India during
twelve months preceding the date of distribution of this research report. Neither SCB India nor its affiliates/group companies
have received compensation for products or services other than investment banking, merchant banking or brokerage services
from the subject company in the past twelve months.
• The principal research analyst(s) who prepared this report, members of the analysts' team, and members of their households
are not an officer, director, employee, or advisory board member of the companies covered in the report. SCB India has not
been engaged in market making activity for the subject company.
• Our Compliance Officer / Grievance Officer is Ms. Rupal Talati, who can be reached at +91-22-68421451, or
[email protected] / [email protected]
• The investor charter of SCB India is available on its website (bernsteinresearch.in)
• Registration granted by SEBI, and certification from NISM, is in no way a guarantee of performance of the intermediary or
provide any assurance of returns to investors. Investments in securities market are subject to market risks. Read all the related
documents carefully before investing.

Notice to Swiss Investors

The products mentioned in this report may not be suitable for all types of investors and is provided only to qualified investors as defined in article
10 of the Swiss Collective Investment Scheme Act and related provisions of the Collective Investment Scheme Ordinance and in strict compliance
with applicable Swiss law and regulations. This report is based on the Directives on the Independence of Financial Research issued by the Swiss
Bankers Association (SBA) in January 2008.
SG Clients
This report is provided in Switzerland by or through Société Générale Paris, Zürich Branch.
Bernstein Clients
This report is provided in Switzerland by or through Bernstein Autonomous LLP.
Notice to Middle East Investors who are Bernstein Clients
Bernstein Autonomous LLP, DIFC branch has its principal office at Gate Village 06, DIFC, Dubai, UAE. Bernstein Autonomous LLP, DIFC branch
is regulated by the Dubai Financial Services Authority (DFSA) with the registration number F008549 and is provisioned for Arranging Deals in
Investments and Advising on Financial Products. All communications and services are directed at Professional Clients and Market Counterparties
only (as defined in the DFSA rulebook). Persons other than Professional Clients and Market Counterparties, such as Retail Clients, are not the
intended recipients of our communications or services.
Notice to Korean Investors who are SG Clients
This report is distributed in Korea by SG Securities Korea Co., Ltd which is regulated by the Financial Supervisory Service and the Financial Services
Commission.
Notice to SG Clients in Thailand receiving this report from offshore
This report has been distributed by SG solely at your request. This report is not intended to be either an offer, sale, or invitation for subscription or
purchase of the securities or any regulated financial services in Thailand. Neither SG, nor any representatives, directors, employees of SG nor any
other entities affiliated with SG make any representations or warranties, expressed or implied, with respect to the completeness or accuracy of any
of the information contained in this report or any other information (whether communicated in written or oral form) transferred or made available to
you.
LEGAL
All research reports are disseminated to our clients through posting on the firm's password protected websites: bernsteinresearch.com and
autonomous.com. This report is provided subject to the terms and conditions of any agreement that the clients may have entered into with the
entities noted herein. All research reports are disseminated on a simultaneous basis to eligible clients through electronic report to our client portal.
The information is private and confidential and for the use of the clients only. Certain, but not all, research reports are also made available to clients
through third-party vendors or redistributed to clients through alternate electronic means as a convenience.
The securities described herein may not be eligible for sale in all jurisdictions where that permission profile is not consistent with the licenses held
by the entities noted herein. This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident
of, or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or

70 DEGLOBALIZATION
COLLABORATIVE RESEARCH - EQUITY STRATEGY 12 June 2025

regulation or which would subject any of the entities referenced herein or any of their subsidiaries or affiliates to any registration or licensing
requirement within such jurisdiction. This report is based upon public sources we believe to be reliable, but no representation is made by us that
the report is accurate or complete. This report is not an offer to buy or sell any security, and it does not constitute investment, legal or tax advice.
MSCI DISCLAIMER: The MSCI sourced information is the exclusive property of Morgan Stanley Capital International Inc. (MSCI). Without prior
written permission of MSCI, this information and any other MSCI intellectual property may not be reproduced, re-disseminated or used to create
any financial products, including any indices. This information is provided on an “as is” basis. The user assumes the entire risk of any use made of
this information. MSCI, its affiliates and any third party involved in, or related to, computing or compiling the information hereby expressly disclaim
all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of this information. Without
limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in, or related to, computing or compiling the
information have any liability for any damages of any kind. MSCI, Morgan Stanley Capital International and the MSCI indexes are service marks of
MSCI and its affiliates or such similar language as may be provided by or approved in advance by MSCI.
Bloomberg Disclaimer: Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its
affiliates (collectively “Bloomberg”). Bloomberg or Bloomberg’s licensors own all proprietary rights in the Bloomberg Indices. Neither Bloomberg nor
Bloomberg’s licensors approves or endorses this material or guarantees the accuracy or completeness of any information herein, or makes any
warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability
or responsibility for injury or damages arising in connection therewith.
No part of this material may be reproduced, distributed or transmitted or otherwise made available without prior consent of the entities noted herein.
Copyright Société Générale Group, Bernstein Institutional Services LLC Bernstein Autonomous LLP, BSG France S.A., Sanford C. Bernstein (Hong
Kong) Limited 盛博香港有限公司, Sanford C. Bernstein (Canada) Limited, Sanford C. Bernstein (India) Private Limited (SEBI registration no.
INH000006378), Sanford C. Bernstein (Singapore) Private Limited and Sanford C. Bernstein Japan KK (サンフォード・C・バーンスタイン株式会
社). All rights reserved. The trademarks and service marks contained herein are the property of their respective owners. Any unauthorized use or
disclosure is strictly prohibited. The entities noted herein may pursue legal action if the unauthorized use results in any defamation and/or
reputational risk to the entities noted herein and research published under the Bernstein and Autonomous brands.

DEGLOBALIZATION 71