Morgan Stanley expects five of its top Asia stock picks to rise by more than 50% over the next 12 months. The Wall Street bank is bullish on a set of Asian stocks as the broad MSCI Asia Pacific equities index has entered a new bull market, rising 25% from last October’s low. The investment bank said the makeup of pan-Asian stocks is changing rapidly. Morgan Stanley identified Japan as a standout performer, particularly on large-cap stocks, as the country’s stock market now has an investible market capitalization exceeding $3.5 trillion, outpacing all other markets in the region. That puts China in second place — its market capitalization of about $2 trillion is only approximately twice that of India. The table below highlights five of Morgan Stanley’s buy-rated stocks with the biggest upside potential. Alibaba Alibaba Group, the Chinese technology giant that’s also listed in the United States, is making significant progress in its restructuring process, according to Morgan Stanley. Earlier this year, it announced plans to overhaul its organization and split into six units to reassure investors about the company’s ability to be “nimble” to market changes. Shares of Alibaba are expected to rise by 62% over the next 12 months, according to the Wall Street bank’s analysts. The stock is also the bank’s top pick in the China internet sector. “The latest restructuring progress and faster-than-expected pace of capital management are encouraging,” wrote Morgan Stanley’s analyst Gary Yu in a note to clients on May 29. “Full cloud spinoff and step-up in pace of share repurchase imply a 30% return to shareholders.” Astellas Pharma Morgan Stanley is also bullish on Astellas Pharma , a Japanese pharmaceutical company. The bank expects Astellas’ shares to rise by 66% over the next 12 months as the company plans to challenge a recent U.S. court decision. The decision declared invalid a patent related to a drug formulation of mirabegron, a medication used to treat overactive bladder. The decision will allow other pharma companies to manufacture generic versions of the drug. The patent was a key part of Astellas’ medium-term business plan. “The likelihood of generics being immediately released in May 2024 is low,” Morgan Stanley analysts Shinichiro Muraoka and Jaeheon Lee said in a note to clients on June 12. Despite this setback, the bank’s analysts suggest that the financial upside from Veozah, its new menopause drug for hot flashes, is much more significant than the potential downside from the patent issue. Sea Despite the challenges from inflation and post-pandemic economic reopenings, Morgan Stanley still sees long-term potential in Sea Limited . Shares of the Singapore-based technology company could rise by 67%, according to the bank’s analysts. The bank noted that the company’s long-term structural opportunity continues to persist, especially with its low e-commerce penetration. JD.com Morgan Stanley highlighted JD.com , a leading Chinese e-commerce company, for its potential growth as Chinese consumer spending picks up. The investment bank expects the total value of all goods sold through its platform to have reaccelerated from the second quarter of this year. It also expects margins to remain resilient, thanks to JD.com’s growing merchant and user base. “This therefore makes J.D.’s current share price and valuation levels very attractive for long-term investors, in our view,” said Morgan Stanley’s analysts, led by Eddy Wang, in a note to clients on June 6. Ping An Ping An Insurance , a major Chinese insurance company, anticipates more supportive business conditions on the back of China’s reopening. “Coupled with potential reform benefits, management is confident that the worst period is over and business will improve from here,” the bank’s analyst, Jenny Jiang, said. The report also suggests that the impact of the Covid-19 pandemic on the company has been minimal, and its investments in real estate are not as large as perceived.