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Asia back in rally mode: South Korea's benchmark index surged +4.39%, fueled by a Wall Street rally (Dow +1.38% to 46,208) and de-escalation signals from the Middle East. Hang Seng (+1.6%), Nikkei (+1.1%) and CSI 300 (+0.5%) followed suit, while Brent crude bounced back +3.5% to $103.70.

TOP BIT

LG offensive: from refrigerator motor to robot muscle

LG Electronics is making 2026 a pivotal year for its transformation.

At the general meeting in Seoul, CEO Lyu announced the radical expansion of the B2B robotics business.

The key: LG doesn't just want to build finished robots, but become the world's most important supplier for their "muscles." For this, the group uses its decades of experience from household appliance production.

Strategy: "Axium" – hardware dominance

The centerpiece of the new strategy is actuators (drive elements). These account for over 40% of a robot's production costs.

• Economies of scale: LG already produces 45 million motors annually for washing machines and refrigerators. This infrastructure is now being used for the new "Axium" actuator line.

• Goal: LG wants to establish itself as a key supplier for global robot manufacturers, while its own brand CLOiD goes into commercial testing in 2027.

The 4 pillars of the "Physical AI" vision 2026

LG is leaving the pure consumer market and focusing on high-margin B2B sectors:

Growth & efficiency: the AI transformation

CEO Lyu is planning a company-wide "AI transformation" to increase productivity by over 30% in the next three years.

• Design automation: AI is to shorten development cycles and reduce costs.

• Investor bonus: As a sign of confidence, LG increased the dividend by 35% to 1,350 won per share.

All details & data: Korea Times, The Korea Herald

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MARKET BIT

Asia PE fundraising hits $58bn, a 12-year low but exits are bouncing back

The Asia-Pacific private equity market is moving at two speeds.

Fundraising dropped to $58 billion in 2025, a 12-year low and down 37% year-on-year. At the same time, exit values climbed 24% to $150 billion.

The details

Asia's share of global PE fundraising: just 5%, down from 12% in 2021. New fund count dropped 44%. LPs have become pickier, backing managers with proven track records over newcomers.

Bright spot Japan: $15 billion raised (+12%), the only major market with growth in both deal value and count.

Deal activity was mixed overall: value down 8%, but count up 6%. Average buyout size shrank to $438 million (from $630 million the year prior), a five-year low. Multiples, though, climbed to 13.4x EV/EBITDA (from 11.9x).

Exits tell the real story

IPO and open-market exits jumped over 70%, trade exits over 60%. Large exits above $1 billion roughly quadrupled. Net distributions to LPs turned positive for the first time since 2021.

Greater China reclaimed top spot as the largest exit market, with exit volume up 76% year-on-year. South Korea's exits rose 38% despite political turmoil.

• Sector shift: Tech fell to 25% of deal value, a 10-year low. Capital is flowing into advanced manufacturing (22%), energy (15%) and healthcare (14%) instead.

• Dry powder: $240 billion sitting uninvested, down from a $315 billion peak in 2023.

What 2026 Looks Like

2020 to 2022 was the peak: low rates, high valuations, plenty of FOMO. Many GPs overpaid. Now, three to five years later, exits are due, and the math isn't working out for over a third of those deals.

Funds that bring their 2020-2022 investments to a clean exit now will get the next fundraise.

And the pipeline points to recovery: KKR (Asia V, $15 billion), EQT BPEA ($12.5 billion) and Blackstone (Asia III, $10 billion) are in market with mega-funds. Combined, the largest funds are targeting $61 billion.

Sources: SCMP, BusinessTimes, Bain

CHART OF THE WEEK

In 2025, China produced 960.8 million tons of steel, a decline for the first time in 15 years (-4.4%).

The reason: the real estate crisis has caused domestic demand to collapse.

In aluminum, however, China continues to grow: 45 million tons (2025), which is 60% of world production.

With this, China is reaching the self-imposed capacity limit that Beijing introduced for energy conservation. US aluminum production has fallen from 3.6 Mt (1996) to 0.6 Mt.

HIGHLIGHTS 

🇹🇼 Grab Buys Foodpanda Taiwan for $600 Million: The Southeast Asian superapp is expanding beyond ASEAN for the first time. Grab will take over Delivery Hero's Taiwan operations, gaining a presence in 21 cities. Foodpanda Taiwan generated roughly $1.8 billion in gross merchandise value in 2025 and is already profitable. The deal is expected to close in the second half of 2026.

🇰🇷 Naver Goes All-In on AI Agents: South Korea's largest internet company plans to deploy AI agents across all services by year-end, backed by record R&D spending of over 2 trillion won ($1.33 billion). An AI Tab in its search engine goes live in the first half, while a shopping agent will expand to all categories by December. Agents for finance, health and local services will follow.

🇬🇧 British Energy Giant Bets on China: Octopus Energy, the UK's largest green electricity provider, has launched a joint venture called Bitong Energy with China's PCG Power. The goal: trade 140 TWh of renewable power annually in China by 2030. The partnership was unveiled during Prime Minister Starmer's visit to Beijing. CEO Greg Jackson calls China's clean tech the best in the world.

🇨🇳 China's Bubble Tea Chains Eye New Frontiers: Chagee is preparing to open its first store in South Korea, following Heytea, Mixue and Luckin Coffee. Over 60 Chinese F&B brands already operate more than 6,100 outlets across Southeast Asia. With the region getting crowded, Japan, Korea, the US and Europe are becoming the new targets. The global market for new-style tea drinks is projected to grow at 7.2% annually through 2028.

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