Australasian Equities - Fat Prophets

Fat Prophets
Australasian Equities

Core

medium

Hold

Going AI Praemium (ASX: PPS) is in the middle of replacing its core operating platform with a new system built using AI capabilities acquired through the purchase of technology firm Technotia. The technology team has been cut from over 140 staff to around 40, targeting A$9 million in annual salary savings. Meanwhile, a customer launch is planned for later in 2026, with migration running through the rest of the year. In our last tech update on the 23rd of April, we noted that “Praemium continued to consolidate constructively above the primary uptrend,

BHP

Core

medium

Buy

A New Escondida Every Year BHP (ASX: BHP) eased about −7.5% from its all-time high in early June to around A$60.20 at the time of writing, as iron ore slipped back toward US$100/t and a broad commodity sell-off took some heat out of the diversified miners. We read the dip not as a top but as a buying opportunity in a stock whose earnings base has quietly changed shape, with a structural engine still underneath the re-rate. That engine is copper. In

Woodside Energy

Core

medium

Hold

Keeping the Country Running? Woodside Energy’s (ASX: WDS) flagship Scarborough gas project off Western Australia is 96% complete and on track to ship its first cargo in late 2026. A separate project in Louisiana, USA, is 31% complete with first shipments expected in 2029. Disruption to roughly 20% of global liquefied natural gas supplies following the Middle East conflict has tightened the market, providing a genuine pricing tailwind. In our last tech update on the 30th of April, we noted that “In terms of the big

Ansell

Core

medium

Hold

What the Sell-Off Bought Ansell’s first-half numbers were strong. EBIT up 15% on flat sales, margins among the highest in recent years, cash conversion at 112%, and full-year guidance held. The stock has fallen roughly 25% from its November peak anyway. Three things have weighed on the shares, but don’t change the long-term story. In February, Neil Salmon handed over to incoming CEO Nathalie Ahlström on results day itself, a transition that was telegraphed and orderly. However, in April, CFO Brian

Downer EDI

Speculative

high

Buy

Nine Years of Revenue Locked In Downer EDI (ASX: DOW) has secured a $310 million contract to maintain key Sydney toll roads for up to nine years from July 2026. This builds on existing work in Melbourne and extends a long-standing relationship with one of Australia’s most demanding infrastructure owners. The company manages over 50,000 kilometres of road networks across Australia and New Zealand. The business is steadily shifting away from riskier construction projects toward lower-risk, long-dated maintenance and services work, supporting more

Domino’s Pizza Enterprises

Core

medium

Hold

Labour Pain? Domino’s Pizza Enterprises (ASX: DMP) is navigating a difficult period, with same-store sales already down 2.5% across the group and the Australian and New Zealand business falling 4.7%. A new CEO is still settling in. From 1 July, award wages rise 4.75%, directly increasing labour costs across a franchise network where individual store profits are already thin at around A$103,000 per year. Cost savings of A$55 to A$70 million and digital efficiencies provide some offset. Until same-store sales show a clear recovery,

Treasury Wine Estates

Core

medium

Hold

Ascent! Treasury Wine Estates (ASX: TWE) popped higher last week after the vintner unveiled its “Ascent” transformation plan at the 2026 Investor Day, with plans to cut the wine brand portfolio from 76 to fewer than 30, focusing resources on three flagship labels and seven regional brands. Operating profit guidance of A$480m to A$490m for 2026 is flat again in 2027, with meaningful revenue growth and margin improvement not expected until 2028. Debt levels peak at roughly 2.9x earnings in 2026, and dividends have been suspended. The US business remains in

South32

Speculative

high

Hold

A Portfolio Built for the Energy Transition South32 (ASX: S32) is increasingly positioning itself around copper, zinc and silver, metals closely tied to electric vehicles, renewable energy and data centre construction. The flagship development project in Arizona, which contains large zinc and silver deposits, has seen costs rise more than 50% to US$3.3 billion, with first production now delayed to late 2028 and full output pushed to 2031. On the other hand, the broader resource has grown by 52%, extending the project’s life to 33 years.

The Lottery Corporation

Speculative

high

Buy

Funding Digital Transformation The Lottery Corporation (ASX: TLC) has cut its annual operating cost guidance by $10 million by permanently reducing staff numbers. The savings are being redirected into artificial intelligence, digital product improvements and customer experience upgrades, funding the transformation from within rather than asking shareholders for more money. Online lottery sales already represent 41.2% of total turnover and are growing. Dividends remain fully franked at 8 cents per share for the half year. The company is cycling out of

SRG Global

Core

medium

Hold

Impressive update, but not chasing Yesterday’s update from SRG Global was impressive, and the market quickly marked the stock +16% higher. A$1.85b in new contracts, FY26 EBITDA guidance upgraded to A$168m, and FY27 EBITDA guided at A$190m–200m, above the market consensus. The HOLD rating is unchanged. While the stock could see more upward momentum from liquidity flows, we don’t like the risk-to-reward in chasing the stock at these levels. The announcement itself deserves the market reaction. A$1.85b in contract wins across

Northern Star

Speculative

high

Hold

Shares Jump After Elliott Goes Public With Demands Northern Star surged (ASX: NST) and was in the spotlight after famed activist investor Elliott Investment Management built a stake worth over A$1 billion in the gold miner and publicly called for a strategic review, including a potential sale of the company. The announcement triggered a rally after a steep year-to-date fall. A new CEO is being sought, a major processing facility expansion is due for completion in early 2027, and full-year production guidance was

Orica

Core

medium

Hold

US Manufacturing Plants Now Fully Owned Orica (ASX: ORI) has resolved two significant US issues in quick succession. A long-running legal dispute was settled for US$169.5 million, removing a major source of uncertainty, and the company has taken full ownership of four US manufacturing facilities previously held in a joint venture for US$25 million plus US$48 million in assumed debt. Together, these moves are expected to deliver A$35 million in annual profit improvement once integrated. In our last tech update on the 17th of

Collins Foods

Core

medium

Buy

German Network Up by 50% Collins Foods (ASX: CKF) completed the purchase of eight KFC outlets in the Munich area of Germany on 1 June 2026 for €31.1 million. The acquisition lifts its German network to 25 restaurants across three states. The newly acquired stores are already generating higher profit margins than existing German locations. Germany has just one KFC restaurant per 1.8 million people, pointing to significant room for growth. Full-year profit growth guidance of mid-to-high teens remains intact. In our last tech

St Barbara

Speculative

high

Buy

Gold Production to Quadruple Between 2027 and 2030 St Barbara (ASX: SBM), an Australian gold producer with operations in Papua New Guinea and Canada, is now entirely debt-free, amassing A$504 million in cash in a single quarter. A major investment from a Chinese partner closed in early April, fully funding an expansion that is expected to nearly quadruple annual gold production from 48,000 ounces in 2027 to 191,000 ounces by 2030. Operations in both Papua New Guinea and Nova Scotia now have the

Generation Development Group

Core

medium

Buy

FUM Cross $4 Billion, Cementing a Market-Leading Position Generation Development Group (ASX: GDG) completed the transfer of $1.8 billion in new client portfolios in May, pushing total funds under management above $4 billion. Separately, Colonial First State, which oversees $136 billion in retirement savings, selected the company’s retirement income and tax-effective investment products for their largest-ever retirement expansion, launching in August 2026 alongside Challenger and BlackRock. With two structural growth themes now running simultaneously and BlackRock holding a minority stake, the long-term earnings runway for

Judo Capital

Speculative

high

Hold

Getting Stronger Judo Capital (ASX: JDO) completed a $750 million loan securitisation in which it packaged up a portion of its business loans and sold the associated risk to outside investors. This strengthened its capital position to 13.2% and is expected to improve returns on shareholders’ funds by 25 to 30 basis points in 2027, without reducing the size of its loan book. Pricing was significantly better than its first deal in 2023. However, returns on equity remain below the cost

Treasury Wine Estates

Core

medium

Hold

Hard Work of Rebuilding Has Just Begun Treasury Wine Estates (ASX: TWE) is well placed to benefit, given a strong presence in the premium end of the wine market. New CEO Sam Fischer delivered a better-than-expected update, though shares still slipped. The CFO is retiring in September 2026, and a prominent global wine industry investor is publicly criticising TWE’s excessive stock levels and pricing discipline while quietly building a stake in the company. A bid may not be far away. The strategy day on 4 June must deliver. In our

Austal

Core

medium

Hold

New Boss and Order Book Stocked Up Austal (ASX: ASB) has confirmed has replaced the CEO in the US business after a period of instability that resulted in an accounting error, cutting full-year profit guidance by 18% to A$110 million. The company has 12 vessels currently under construction for the US Navy and Coast Guard. The order book is well stocked, and Australia’s Henderson yard is positioned for over +20 years of continuous work. Strong order visibility is offset by real execution risk,

BHP

Core

medium

Buy

BHP Hits an All-Time High as Copper Becomes the Primary Earnings Driver BHP (ASX: BHP) reached an all-time share price high this month, driven by copper prices. Copper has now overtaken iron ore as the company’s primary earnings driver, with 1H26 profits up 22% and dividends rising 46% to US$0.73 per share. With world-class, low-cost copper assets already in production, BHP has unmatched leverage to one of the most in-demand metals of the decade. In our last tech update on the 23rd of April, we noted that

Mirvac

Core

medium

Hold

Housing Shortage? Solution: 2 Week Homes Mirvac (ASX: MGR) is building a significant portfolio of purpose-built rental apartments, currently at 2,200 with a target of 5,000, backed by a $1.8 billion partnership with two major institutional investors. The company is also trialling factory-built homes in south-west Sydney, cutting construction time by roughly half and waste by 60%. Though near-term earnings are under pressure from higher borrowing costs, softer profit margins on home sales and rising construction costs. The strategy is credible, but the financial benefits

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