Morgan Stanley's research reports pointed out that Fast Retailing (06288.HK)(9983.JP) emphasized the "Fourth Frontier" strategy, focusing on the growth of its brand "Uniqlo" outside of Greater China. By the end of August 2026 in the 2026 fiscal year, Southeast Asia, North America, and Europe are expected to drive around 82% of the operating profit; Greater China is expected to rebound; the Japanese market is expected to remain stable based on profit growth.

Morgan Stanley expects the operating profit for the fiscal year ending in August 2025 to increase by 10.2% annually; for the 2026 fiscal year, it is expected to grow by 11.3%, also raising its target price of Japanese stocks from 43,000 yen to 55,000 yen, and the rating from "in line with the market" to "shareholding".

Morgan Stanley also pointed out that in response to the declining confidence of Chinese mainland consumers and increasing market competition, Fast Retailing has carried out reconstruction of its mainland China stores, leading to a roughly 1.5-fold increase in the monthly turnover of these stores. The bank expects the performance of the China mainland market in the 2025 fiscal year to accelerate reaching a bottom.

Furthermore, Morgan Stanley believes that with the expected warming up of the performance in Greater China, Fast Retailing's valuation may rise. Once the performance in Greater China bottoms out and rebounds more clearly, its growth prospects will further improve.