Australasian Equities - Fat Prophets

Fat Prophets
Australasian Equities

Core

medium

Buy

A Foothold in One of the World’s Fastest-Growing Markets QBE Insurance (ASX: QBE) has bought out an Indian business partner, taking full ownership of an insurance venture the two companies had run together for 18 years, deepening QBE’s exposure in India, a market growing quickly as more people take out cover for the first time. Meanwhile, in Canada, the company has expanded their marine and environmental insurance, building out higher‑margin niche lines. QBE is trading near year highs, and as a global insurer, the business is helped by rising bond yields,

iShares China Large-Cap ETF

Core

medium

Buy

On Sale The tape has been poor for the iShares China Large-Cap ETF (ASX: IZZ) year-to-date, falling around 15% YTD, though there has been an almost +8% rebound over the past week. Hong Kong equities rebounded hard on Wednesday, and IZZ’s largest holdings were among those leading the move. The Hang Seng Tech index jumped 4.3%, its best session in over a month, as a rally in chip and AI names pulled global money out of pricier markets (like the

Macquarie Group

Core

medium

Buy

Building a Fee Machine Macquarie Group (ASX: MQG) has closed out three deals in quick succession, and the business model of earning steady management fees is ticking over well. The Supreme Court approval has locked in an A$11.7 billion buyout of ports and logistics company Qube, giving Macquarie decades of fee income from a major transport network. Their US lending arm has also grown quickly, raising over US$1.6 billion in less than two years and attracting new investors. Separately, Macquarie sold off a portfolio of retirement home loans, freeing

Northern Star

Speculative

high

Hold

New Boss Waiting in the Wings Northern Star Resources (ASX: NST) hit gold production targets for the year (though only after cutting expectations already). A major upgrade to NST’s KCGM mill in Western Australia is scheduled to come online later this year, roughly doubling processing capacity, though final running costs remain unclear. A new CEO has been named, but does not start until October, leaving a gap in leadership. In our last tech update on the 3rd of June, we noted that “Northern Star

Fortescue

Speculative

high

Hold

Caught Between a Rock and a Hard Place Fortescue (ASX: FMG) is facing pressure on two fronts, even though the core business remains robustly profitable. China’s state-run iron ore buyer has told steel mills to stop taking certain Fortescue shipments from mid-July. This is a move designed to place pressure on FMG to lower iron ore pricing. Easing iron ore prices to around US$98 a tonne has also dampened sentiment despite FMG having very healthy profit margins at these prices. A heavy reliance

Suncorp

Core

medium

Buy

Weathering the Storm With a Five-Year Safety Net Suncorp (ASX: SUN) has locked in a new five-year insurance arrangement, worth up to $2.4 billion, designed to protect the company from the rising cost of storms, floods and bushfires. This should make profits more predictable, even though weather-related costs this year came in $250 million above budget. Growth in premiums has slowed slightly due to a weaker economy, but underlying profit margins are still tracking near the top of Suncorp’s target range.

Xero

Core

medium

Buy

Raising Prices Into the Market Panic Following the FY26 results, Xero has taken steps that sit awkwardly with the idea that it is paralysed by AI disruption risk. Xero has embedded itself inside Microsoft 365 Copilot and is raising subscription prices across its main UK plans. The market is still pricing the first-order fear – that general AI assistants will disintermediate its offerings – while the company seeks to convert those same assistants into distribution. On 1 July 2026, Xero announced an

BHP

Core

medium

Buy

Digs Deeper Into Copper’s Future BHP (ASX: BHP) is doubling down on copper, a metal in high demand for electric vehicles and power grids, by pursuing growth on several fronts at once. It has applied to reopen a previously closed mine in Chile, this time using recycled wastewater instead of groundwater to address community concerns. It has also tested new technology that pulls valuable metal out of waste material, and struck a deal to hand over an old Arizona site to

Rio Tinto

Core

medium

Buy

Betting Big on Batteries While Iron Ore Foots the Bill Rio Tinto (ASX: RIO) is expanding rapidly into forward-facing base metals tied to AI, underpinned by copper, but also lithium, aiming to triple lithium output to 200,000 tonnes by 2028. This is a division management expects to grow faster than any other mining operations, given the importance to battery manufacturing. The company has also renegotiated terms on the huge Mongolian copper mine (Oyu Tolgoi), cutting fees and interest costs to reflect lower risk now that the operation

Genesis Minerals

Speculative

high

Hold

Twenty Years Worth in the Ground Genesis Minerals’ $639m acquisition of Magnetic Resources was completed in late June, lifting group resources to 21.3Moz and reserves to 5.4Moz, and a fresh sweep of Laverton drilling confirms the organic engine behind “ASPIRE 500” is running. At mid-guidance production, that reserve base equates to roughly two decades of mine life. Yet with Australian-dollar gold down materially since our last note and the correction still unresolved, the margin cushion is narrowing even as it stays

South32

Speculative

high

Hold

Aluminium Out, Copper In South32 (ASX: S32) surged after agreeing to sell its aluminium value chain assets to Alcoa in a deal sized at US$5.6bn, pivoting the company toward a heavier copper exposure. The deal includes US$3.1 billion in cash, with a planned US$500 million special dividend to shareholders. At the same time, South32 is spending US$725 million to expand its Chilean copper mine, aiming to lift output by about 30% from around FY30. The sale is expected to close next year, pending several regulatory

Orica

Core

medium

Hold

Explosives Company Bets on Hydrogen Orica (ASX: ORI) has given the final go-ahead for a hydrogen production facility at the existing Newcastle chemical plant, backed by A$547 million in government funding. Though the first output is years away, shareholders benefit from the heavy government subsidy. Meanwhile, the core explosives business remains the near-term earnings driver, and deeper mines are a structurally supportive factor in the years ahead. In our last tech update on the 3rd of June, we noted that “Orica has resumed upward momentum following

Collins Foods

Core

medium

Buy

Record Sales, Higher Profits and Digital Doing the Heavy Lifting Collins Foods (ASX: CKF) after reporting record revenue of A$1.59 billion in FY26, with underlying profit up +13% to A$61.4 million. Same-store sales at Australian KFC stores opened at least one year ago rose +2.7%, and digital ordering channels now account for over 43% of sales. This points to the core Australian market remaining highly resilient for KFC despite multiple consumer headwinds. This is constructive. In Europe, operating profit almost doubled, but same-store

Domino’s Pizza Enterprises

Core

medium

Hold

Licence Clock Extended; Turnaround Clock Still Ticking Domino’s Pizza Enterprises (ASX: DMP) has secured an extension of its rights to run the Domino’s brand in France and Belgium until 30 September 2026, removing immediate licence risk. The share price fell about 5% on the news, reflecting broader scepticism after 1H26 sales fell 1.6% across the network and 2.5% at comparable stores, not to mention pressure from higher labour costs. Profit in Europe improved 23%, yet Australia and Japan remain soft, and the US parent has cut full‑year

CSL

Core

medium

Hold

Small Setback; Turnaround Still in Motion CSL (ASX: CSL) is dealing with a contained setback in one small drug while the broader business still hinges on much larger franchises. The European regulator has recommended pulling TAVNEOS, a medicine for a rare inflammatory blood-vessel disease, but that product contributes only about 1% of CSL’s total sales, so the direct financial hit is limited. FY26 guidance has already been cut, with revenue now expected around US$15.2 billion and underlying profit slightly below last year,

Scentre Group

Core

medium

Hold

1500 Apartments: Changing the Maths Scentre Group (ASX: SCG), which owns and operates Westfield shopping centres and currently enjoys a 99.8% occupancy with retailers paying higher rents on new leases, has announced plans to build roughly 1,500 apartments across eight towers adjacent to Westfield Warringah Mall on Sydney’s Northern Beaches, which are progressing through a state government fast-track process. In addition, a $240 million upgrade at Westfield Bondi Junction is also underway. The business is well run and has probably faced the peak of local interest rate

Woodside Energy

Core

medium

Hold

Alcoa Deal Locks In Three Years of Gas Revenue Woodside Energy (ASX: WDS) has signed a three-year gas supply deal with Alcoa’s Australian alumina refineries that runs from next year through to 2030, locking in a meaningful share of domestic gas volumes. Meanwhile, the group’s offshore Senegal oil field has now produced over 50 million barrels and is being assessed for a potential second phase that could unlock a further 250 million barrels. While near-term sentiment will be dominated by the US/Iran

James Hardie Industries

Core

medium

Buy

What Patient Capital signalled The housing bear case has had a difficult few weeks. In the space of approximately a month, Berkshire Hathaway committed US$8.5 billion to acquire Taylor Morrison, one of the largest US homebuilders, and a landmark bipartisan housing bill cleared both chambers of Congress with wide margins – not an easy feat in today’s fragmented US political environment. Both are favourable for James Hardie and the broader US housing cohort. JHX is the largest exterior cladding supplier

Paladin Energy

Speculative

high

Buy

Seven From Eight Holes Hit Uranium Paladin Energy (ASX: PDN) announced a significant new uranium discovery at the Canadian Patterson Lake South project, named Atlas. Seven of eight drill holes struck uranium, with the strongest results reaching grades of 4.25% (note: an impressive result that is more than 40x higher than the global average for operating uranium mines), located 3.5 kilometres from the company’s existing deposit. The existing deposit holds 93.7 million pounds of uranium at production costs well below current uranium prices.

Judo Capital

Speculative

high

Hold

3 Bad Loans? Judo Capital (ASX: JDO) plunged -40.4% after a profit warning, trimming its full-year profit forecast from A$180-190 million to A$163-169 million. The downgrade was driven by three specific business loans that turned sour, pushing bad debt charges to more than double the bank’s own long-term target. Loan book growth, interest margins and cost controls all remain on track. The question investors are now asking is whether these three problem loans are isolated incidents or an early warning of

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