Research notes

GQG has provided a May FUM update. Overall, monthly outflows appear to be stabilising in the -A$1.5bn to -A$2.0bn range, although investment performance remains highly volatile. While FUM is effectively flat calendar year-to-date, with outflows offset by positive market movements, we acknowledge it will be difficult for GQG to re-rate until the current outflow cycle ends. We lower our GQG FY26F/FY27F EPS forecasts by 1%-5% and reduce our price target to A$1.64 (from A$1.92). While the near-term operating environment remains difficult, we continue to see long-term value in the GQG franchise, trading at ~9x FY1 PE with a ~10% dividend yield. ACCUMULATE.

TTX successfully completes a placement to fund the expansion of its production facility and build on its customer success team. We have updated our model to reflect the new capital and take a more optimistic stance on FDA approval for its dental/orthopedic products. Independent research shows TTX’s drug delivery platform can safely carry and protect fragile drugs when delivered through the nose. Future licensing opportunities are likely. Our valuation has increased to A$7.15 (was A$6.84). SPECULATIVE BUY.

Given recent profit downgrades from other travel industry peers due to the conflict in the Middle East, HLO’s downgrade wasn’t a surprise. It has revised its FY26 EBITDA guidance by 11-14%. We have downgraded our forecasts. We assume that the conflict and a subdued consumer environment continue to impact the 1H27, followed by a strong recovery in the 2H27. This could prove conservative given HLO’s strong 1Q27 bookings. We are buyers of HLO during this period of short-term uncertainty and share price weakness because when operating conditions ultimately improve, both its earnings and share price leverage to the upside will be material.

After a challenging 1H26, VEE has seen an improvement in 2H26 driven by higher Defence revenue from the fulfilment of ASC orders in hand alongside a recovery in propulsion sales. VEE has also completed construction of its ~1,000m2 factory extension, with the additional space to accommodate anticipated future growth in propulsion, defence, and engineering. Management expects FY26 revenue of $50-52m and EBITDA of $3.25-3.75m. Reflecting this guidance, we decrease FY26F revenue by 2% to $51.3m but increase EBITDA by 140% to $3.6m. Our target price rises to $0.85 (from $0.80) and we maintain our SPECULATIVE BUY rating. We believe VEE’s outlook remains positive with multiple growth opportunities across defence (eg, HII, Northrop Grumman, Hunter Class Frigate Program), propulsion (VEEM Extreme, Sharrow), and gyros (Mark III). While the timing of order flow can be uncertain and may drive near-term earnings volatility, the long-term earnings potential from these opportunities remains significant.

Palo Alto Networks, Inc. is a global cybersecurity leader headquartered in Santa Clara, California. Founded in 2005, the company provides advanced security platforms including next-generation firewalls, cloud security via Prisma Cloud, secure access through Prisma Access, and AI-driven security operations with its Cortex platform.

Siemens AG is a technology company which engages in the areas of automation and digitalisation. It operates through the following segments: Digital Industries, Smart Infrastructure, Mobility, Siemens Healthineers, and Siemens Financial Services.

TEA has agreed to acquire Victorian specialist electrical contractor Maxim Group for up to $254m (~5.4x FY26F EV/EBIT). The deal is ~31% EPS accretive, scales TEA’s Electrical segment to >$100m EBIT and diversifies earnings away from resources into data centres, infrastructure and Battery Energy Storage Systems (BESS). TEA will look to leverage its regional expertise as data centres increasingly move out of metropolitan areas. Maxim’s owner-led team is retained and aligned via scrip and a three-year earn-out. We make meaningful EPS changes of +30-34% in each of FY27 and FY28. Target price rises to $9.15 (from $5.25). BUY maintained.

NVIDIA Corporation is an American semiconductor company and a global manufacturer of high-end graphics processing units (GPUs). The company is based in California and has five operating segments: (1) Data Center, (2) Gaming, (3) Professional Visualisation, (4) Automotive, and (5) Original Equipment Manufacturer (OEM). As the engine of Artificial Intelligence (AI), NVIDIA is committed to accelerating the growth of generative AI, by recognising it as a new computing platform, like the PC, internet and mobile-cloud.

VYS is acquiring NewGround, adding highly accretive (~25% EPS) annuity-style earnings that, alongside greater customer-base diversification in the industrial division, materially increases earnings visibility. The limited upfront cash component of $8.3m preserves balance sheet flexibility, providing further capacity to continue building out its integrated water-services platform via acquisitions. Incorporating NewGround from early October, we raise our EPS forecasts in FY27 and FY28 by +19 and +24% respectively. Target price increases to A$1.10 (from A$0.90). Reflecting the improvement in earnings quality and reduced volatility, we upgrade VYS from Speculative Buy to Buy. While the Kariyarra asset management business carries a binary outcome, at the current share price, investors are getting this optionality for free.