🧨 Good morning friends, 

2026 will be the year when people in and with Asia will make incredible amounts of money, while others will lose a great deal of it.

We hope and wish, of course, that asiabits readers will be among the former—and with this edition, we're doing our part to make that a reality.

And now: enjoy the celebrations! We’ll be back on Monday, January 5, fresh and ready.

Asian Indices in 2025

🇨🇳 China pulls the lever

Dividends and share buybacks rise to around RMB 3.6 trillion in 2025, while capex declines. The goal is no longer growth at any cost, but returns for shareholders.

All just tech? 2025 was not a pure tech year. Commodities rose by over 100%, healthcare by around 50%, and entertainment & gaming by more than 40%. Real estate lagged behind.

🇭🇰 Hong Kong as the stock-market showcase

The Hang Seng gained over 30%. Banks are targeting 30,000 points in 2026. Hong Kong is increasingly becoming the IPO window for mainland companies and is once again attracting significant foreign capital.

🇯🇵 Japan on a new level

The Nikkei closed above 50,000 for the first time on 28.10.2025. The AI boom, reform hopes, and a weak yen fueled the rally. Year-end profit-taking does not change the structurally strong momentum heading into 2026.

🇰🇷 Korea surges ahead—with risk

The KOSPI rose by over 75%, making it the strongest market globally. Drivers were chips, foreign inflows, and reforms. Risks remain around AI profitability and Fed policy in the second half of 2026.

2026
The Year of tectonic shifts

Hardware
Robots march from factory to street

The year 2026 marks the transition from industrial robots to humanoid and service-oriented systems across East Asia.

• China is leading the race. Unitree and Fourier Intelligence are pushing into the market with aggressive pricing strategies.

• Japan's Kawasaki and Mitsubishi are banking on quality and care applications.

• South Korea is playing the integration card. With Samsung and Hyundai, the country is focusing on integrating robotics into smart factories and households.

• At the same time, Taiwan is driving the miniaturization of edge AI chips through TSMC and Foxconn, making robots smarter and more responsive.

The critical development will be cost reduction: humanoid platforms could drop below the $30,000 mark on a broad scale for the first time in 2026, making them affordable for small and medium-sized enterprises.

👉🏻 The infrastructure is growing explosively. Shenzhen, Seoul, and Tokyo are expanding fully automated warehouses and supply chains. Those who invest early here will secure decades of advantage.

Software
LLMs learn Mandarin (and come of age)

2026 will be the year of consolidation in the Asian AI software market. Western models have long dominated the market, but Chinese players are catching up massively.

The era of the all-rounder is also ending: specialized models for medicine, law, and industrial automation are taking over. Japan is focusing on AI for aging societies, while South Korea's Naver and Kakao are building localized alternatives.

• The breakthrough comes with on-device AI: smartphones and edge devices execute complex AI operations locally, without cloud dependency. This changes everything from privacy to business models.

👉🏻 Regulation becomes a competitive factor. China's strict data localization laws create closed ecosystems, while Japan's pragmatic approach enables international cooperation.

Raw Materials
Gold, Glory, and Rare Earths

In 2026, the strategic importance of critical raw materials intensifies dramatically. China continues to control around 80% of global rare earth processing and uses this as geopolitical leverage.

• Japan is intensifying exploration of deep-sea deposits off its coasts and investing in recycling technologies for electronic waste.

• Prices for neodymium, dysprosium, and terbium remain volatile and will likely continue to rise in 2026—essential for electric motors and wind turbines.

• Gold is experiencing a renaissance as a hedge: central banks in China and Asian emerging markets are increasing reserves, while private demand explodes due to geopolitical uncertainty.

• Silver benefits doubly from its role as both a precious metal and industrial metal, particularly through demand from the solar industry and electronics.

Strategic reserve-building is accelerating: China is systematically stockpiling critical minerals, while Japan and South Korea are establishing state-sponsored storage programs. The race for lithium alternatives is intensifying, with sodium-ion technology from China as a potential game-changer.

👉🏻 2026 will determine who holds the better cards in the resource poker game—and who gets pushed away from the table.

OUR PARTNER

Shoppers are adding to cart for the holidays

Over the next year, Roku predicts that 100% of the streaming audience will see ads. For growth marketers in 2026, CTV will remain an important “safe space” as AI creates widespread disruption in the search and social channels. Plus, easier access to self-serve CTV ad buying tools and targeting options will lead to a surge in locally-targeted streaming campaigns.

Read our guide to find out why growth marketers should make sure CTV is part of their 2026 media mix.

Learn more.

MARKET BIT

🤝 Asia M&A Review 2025 and Outlook for 2026

What happened: Trade War 2.0, Trump-driven volatility, and fluctuating interest rates distorted global M&A flows. Capital moved away from the US and found stability, attractive valuations, and political predictability in Asia.

The numbers: APAC reached USD 1.3 trillion in deal value (+21% YoY), despite fewer transactions. The market became more concentrated and more strategic. Japan hit record volumes, and China also regained significant momentum.

The shift: State-led reforms in China, governance pressure in Japan, and Hong Kong’s comeback turned the region into a global M&A magnet in uncertain times.

🇨🇳 Greater China

China reloaded: State guardrails, SOE-led mega-deals, and attractive valuations are driving domestic M&A. Selective foreign capital is cautiously returning.

Capital in transition: Western investors are stepping back. Gulf sovereigns and regional players are filling the gap—with longer time horizons and lower geopolitical sensitivity.

Hong Kong as a release valve: An IPO boom, PE exits, and Stock Connect are restoring Hong Kong’s role as a hub for dollar assets, while the mainland releases capital in a controlled way.

The details

Deal dynamics: Greater China reached USD 399 billion in deal value (+46% YoY), driven by USD 335 billion in domestic M&A. Fewer deals, but larger, politically supported transactions.

The state as conductor: “National Nine” and “M&A Six” are channeling capital into semiconductors, AI, EVs, and biotech. The goal: national champions, less speculation, more industrial depth.

Who is selling: Multinationals are restructuring after the 2025 tariff shock. Starbucks and Burger King are giving up control to regain capital, local expertise, and growth.

SOEs as deal engines: 20 of 29 mega-deals (>USD 1 billion) in 2025 were led by state-owned enterprises.

Outbound: selective & political: Europe remains a target region, but sensitive (remember: Nexperia case). Growth is pursued via ASEAN JVs, green-energy projects, and offshore holding structures—not classic acquisitions.

🇯🇵 Japan

The take-private machine: A weak yen, governance reforms, and activist pressure are driving record take-privates. Japan has become a prime hunting ground for strategic buyers and PE.

Demographics force deals: A shrinking population and stagnant revenues mean Japanese companies must acquire to grow.

The details

Record levels: Deal volume reached USD 315 billion in 2025, far above estimates of around USD 207.5 billion. The highest level in 25 years, fueled by inbound capital and corporate restructuring.

Governance works: Where boards once said “no thanks,” TSE and METI now push companies to seriously review takeover offers and clearly justify rejections. This makes Japan more takeover-friendly and accelerates carve-outs.

Financing 2.0: Private credit structures combine equity and debt, lowering capital costs and enabling larger deals without overstretching balance sheets.

🇰🇷 South Korea

Focus over fireworks: Korea’s M&A remains selective. Chaebols are optimizing portfolios, while chips, batteries, and tech supply chains are being reshaped under new government plans. 2025 deal volume: around USD 57 billion.

Sponsor market over strategic show: Private equity and buyouts set the tone. Control was the objective—minority stakes were often just the entry point before taking the wheel.

The details

Market size with direction: Around 1,277 transactions were recorded in Q1. No boom in Q2 either, but clear momentum and significantly more activity than a year earlier.

Buyouts as the engine: Buyouts more than doubled (around USD 15.6 billion). Korea remains a control-driven market: investors want to shape, not just participate.

Exits are returning: Exits rose sharply (around USD 10.1 billion). Still no IPO frenzy, but enough liquidity for sponsors to rotate portfolios, lock in gains, and push new deals.

Outlook 2026

Asia remains mandatory: China, Japan, and Hong Kong stay core pillars of global growth strategies—especially amid geopolitical tension.

A new buyer logic: While US and EU investors hesitate, Gulf states and ASEAN players are better positioned to capture opportunities in China and across the region.

Sectors & structure: Biotech, healthcare, TMT, and AI drive deal activity. Convertible bonds and private credit become the preferred bridge between equity and debt.

Momentum: Deal flow in China accelerated noticeably in the second half—so 2026 starts not with hope, but with pipeline.

👉🏻 Deep Dives: Reuters, PwC, MergerMarket, BusinessTimes SG, A&O Shearman

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HIGHLIGHT

As 2025 draws to a close, Asia’s deal market is setting off one last fireworks display. The signal for 2026? Faster, bigger, AI.

🤖 Meta acquires Chinese AI agent: billion-dollar Manus deal

💰 Flash exit after 9 months: Meta is acquiring AI agent specialist Manus just nine months after its product launch. Media reports put the price at over USD 2 billion—one of the fastest AI exits ever.

🌏 China → Singapore → Silicon Valley: Founded in China, Manus moved its headquarters to Singapore, avoiding geopolitical friction. The technology remains globally scalable, while its roots stay Chinese.

⚙️ Agents instead of chatbots: Manus develops general-purpose AI agents that operate like digital employees—handling research, coding, and automation with minimal prompting.

📊 Triple-digit revenue already: Eight months after launch, Manus reported over USD 100 million in annualized revenue, more than 147 trillion tokens processed, and over 80 million virtual computers.

🧠 Meta buys speed & talent: The Manus team is joining Meta, with founder Xiao Hong becoming a VP. The agents are set to be integrated into Meta AI, business tools, and consumer products.

Full Story: SCMP, DealStreet Asia, CNBC

OUR PARTNER

FIREWORK COOKIE

We are wishing you a new year full of big wins, small worries, and just enough chaos to keep things interesting.🍀

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