Executive Summary

TC Energy is, following a deliberate multi-year simplification, one of the purest publicly traded expressions of the North American natural gas transmission theme. The company that until recently operated crude oil mainlines, an oil-marketing arm and a sprawling liquids franchise alongside its gas business has, through the October 2024 spin-off of that liquids business into South Bow Corporation, resolved itself into something conceptually cleaner: a regulated, contract-backed carrier of natural gas across Canada, the United States and Mexico, with a nuclear-anchored power arm attached. What makes TC Energy interesting is not a dramatic growth story of the kind that animates a consumer compounder, but the opposite — the durability and visibility of a toll-collecting infrastructure business whose earnings are approximately ninety-eight per cent underpinned by rate regulation or long-term take-or-pay contracts, arriving at precisely the moment when North American gas demand is being pulled upward by liquefied natural gas exports, data-centre electricity load and the retirement of coal-fired generation.

We approach TC Energy not as a commodity producer exposed to the price of the molecule it moves, but as the owner of irreplaceable rights-of-way whose value derives from regulated returns on an ever-expanding capital base. The network taps most of the continent’s major supply basins and carries over thirty per cent of the natural gas consumed in North America each day. Its four reporting segments — Canadian, United States and Mexican natural gas pipelines, together with Power and Energy Solutions — sit atop total assets of roughly C$118.6bn, of which the United States pipeline segment alone accounts for C$56.6bn. The financial architecture is a familiar utility one: costs, financing and an allowed return on equity are recovered through tolls, so that physical volumes may fluctuate seasonally while revenues remain comparatively stable through the year.

Our tone throughout is deliberately neutral. TC Energy offers a high-quality, visible earnings stream and a credible path to mid-single-digit compound growth in comparable EBITDA, guided to C$11.6bn–11.8bn in 2026 and to C$12.6bn–13.1bn by 2028. It also carries a balance sheet still working back toward its leverage target, a concentrated Mexican counterparty, and a valuation that already sits at the upper end of both its peer group and its own historical range. The purpose of this note is to lay out both sides with as much precision as the disclosure permits, and to identify the handful of variables on which the investment case ultimately turns.

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Pakistan Petroleum Limited is one of the more unusual propositions in emerging market energy. On the income statement it looks like a high-quality upstream business: gross margins above 60%, net margins near 38%, minimal debt, a portfolio of long-life legacy gas fields with some of the lowest lifting costs in Asia, and a return on equity in the low to mid teens through a decade of currency collapse, political turnover and two International Monetary Fund programmes. On the balance sheet it looks like something else entirely. Roughly Rs 600bn of trade receivables, equivalent to about Rs 220 per share and more than 60% of total assets, sit unpaid on the books of two state-owned gas utilities that are themselves insolvent on any commercial reading. In the year to June 2025 the company earned Rs 92bn and generated negative free cash flow of about Rs 10.7bn.

That gap between accounting profit and cash is the whole investment case, in both directions. It is why the shares change hands at roughly eight times earnings and below book value while the company earns a mid-teens return, and it is why the stock can move sharply on a newspaper report about a cabinet committee agenda.

Two such developments are live as this note is written. On 19 August 2026 the Petroleum Ministry placed a Rs 1.49 trillion settlement package before the Cabinet Committee on Energy, of which Rs 540bn is to be funded by incremental dividends from state-owned exploration companies. Market estimates put PPL’s share at Rs 80 to Rs 105 per share, against a share price of Rs 237.89. Separately, the closure of the Strait of Hormuz since late February 2026 has removed the imported liquefied natural gas that had been crowding indigenous gas out of the pipeline network, and PPL disclosed that curtailment at Sui, which had cut sales to the two Sui companies from about 209 million standard cubic feet per day to about 171 MMscfd, ceased in early March 2026.

This report examines what PPL is, how it earns money, why the shares have behaved as they have, how the state exercises its dual role as owner and debtor, and what the business is worth under a transparent set of assumptions.

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Introduction

In the next AGM, GSEF shareholders will face a continuation vote that in our view is unlikely to pass but will set the pathway for a future vote where activist and 18% shareholder Saba Capital is likely to succeed. Whenever the vote does succeed, the fund must be wound up, liquidated, or reorganised within 3 months. The boards own continuation vote is scheduled for 2028 and can only be brought forward if new dividend and disposal targets of the Germany portfolio are missed. GSEF will include Saba’s resolutions in the coming vote in the interest of transparency and is obviously pushing owners to vote no and avoid a simple majority saying yes.

The backdrop is a fund that has lost the confidence of its own share price. Net asset value fell from 102.8p to 74.9p over the year to 31 March 2026, a decline of roughly twenty-seven per cent driven overwhelmingly by lower third-party merchant revenue forecasts rather than anything operational. The shares sit near 45.8p, a discount to net asset value of about thirty-eight per cent. For a fund capitalised at a little over £230m against a stated portfolio value of £378m, that gap is the entire investment case, in both directions.

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Introduction

Enbridge is, in the most literal sense, a toll road. It moves roughly thirty per cent of the crude oil produced in North America and a fifth of the natural gas consumed in the United States, and it is paid for the transport rather than for the commodity itself. Enbridge is unique as to its share price is not mainly affected by the familiar energy question of where oil and gas prices are heading, instead the main driver of earnings and therefore its share price is whether the barrels will keep flowing and how protected are the tolls against inflation and volume risk, and whether the price the market is asking for this collection of largely irreplaceable assets embeds a margin of safety that we can get comfortable with. The regulated earnings of Enbridge attracted us to analyse this business further as we see greater earnings quality in utilities and energy companies

The foundation is the insulation of its cash flows. Over ninety-eight per cent of Enbridge’s EBITDA is generated under regulated cost-of-service frameworks or long-term take-or-pay contracts, structures that break the link between the company’s earnings and the price of the commodity moving through its systems. The crown-jewel Liquids Mainline earns within a negotiated return band, the regulated gas pipelines and utilities earn an approved return on their invested capital, and the contracted assets are paid for reserved capacity whether or not a single barrel is transported. The result is an earnings profile that behaves far more like a portfolio of inflation-linked bonds than like a conventional energy producer, and which has delivered twenty consecutive years of meeting financial guidance and thirty-one consecutive years of dividend increases.

What elevates the investment case from a simple yield story to a margin-of-safety proposition is the relationship between the market’s valuation of the company and the cost of physically replicating its assets. Enbridge carries an enterprise value of approximately C$278 billion and a market capitalisation near C$163 billion; our bottom-up estimate of what it would cost to rebuild its network at today’s construction prices lands in a range of roughly C$460 to C$750 billion. In other words, an investor is being asked to pay for the equity at a fraction of the replacement cost of the underlying assets. In the case of the Mainline and much of the core, could not in practice be permitted or built again at any price. This is the essence of the downside protection with the barrier to entry being expressed directly on the balance sheet.

The report is organised into seven main sections. The first four establish what the business is and what it earns: the revenue and segment architecture with its regulated-return mechanics; the cost, cash-flow and balance-sheet profile with particular attention to leverage and free-cash-flow generation; the replacement-value case that anchors the margin of safety; and the forward revenue outlook across the liquids and gas franchises. The fifth examines the capital programme and the returns it is expected to earn, the sixth confronts the two genuine structural threats, renewables and electrification; the seventh places the valuation in the context of peers and Enbridge’s own history. Throughout the report, we are less interested in the upside case, which is well understood, than in what must remain true for the downside to stay protected.

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The investment debate around Hub Power is no longer about a power plant. It is about a holding company.

For most of its three decades on the Pakistan Stock Exchange, HUBC was the purest expression of the country’s independent power producer model: a 1,292 MW furnace oil plant in Balochistan, a dollar-indexed capacity payment stream, and a dividend cheque. That company effectively ceased to exist on October 1, 2024, when HUBC agreed to terminate the base plant’s power purchase agreement almost three years early as part of the government’s IPP reform drive. The asset that defined the company for thirty years now sits idle, and revenue from contracts with customers at the holding company level has fallen to zero.

What is remarkable is what has happened to earnings since. In the nine months to March 2026, consolidated revenue fell 22 percent, yet profit before tax rose 6 percent and profit attributable to shareholders slipped only 3 percent to Rs33 billion. The reason is that HUBC’s economic engine has quietly migrated out of its own income statement and into the line for associates and joint ventures, which contributed Rs32.3 billion in 9MFY26, roughly equal to the entire attributable profit. The Thar coal complex, the 1,320 MW China Power Hub plant, an upstream gas business built on the former Eni Pakistan assets, and a growing new-energy franchise anchored by BYD now drive earnings. The old Hub plant no longer needs to.

This is the central question for investors. Is HUBC a shrinking legacy IPP that is returning cash while its contracts run off, or is it Pakistan’s first genuinely diversified energy platform, with coal mining, upstream gas, electric vehicles, charging infrastructure and mineral exploration layered on top of a contracted generation core? The market appears to be pricing something in between. At roughly 6 to 6.5 times our estimate of FY26 earnings and a trailing dividend yield of about 9 percent, the stock is valued more generously than the terminal-value IPPs such as Kot Addu or Lalpir, but nowhere near what a growth platform with a credible earnings pipeline would command in most markets.

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Introduction

We initiate with a constructive but disciplined view on Essential Properties Realty Trust, an internally managed net-lease REIT that has quietly compiled one of the best growth records in the sector since its June 2018 initial public offering. The consensus view is that EPRT is simply the highest-quality, fastest-growing name in net lease and therefore deserves its premium. Our variant perception is narrower and more testable: the durability of EPRT’s model rests on two cruxes that the market treats as settled but are not — first, whether 7–9% AFFO-per-share growth can persist as the asset base scales and rates normalise, and second, whether a sub-investment-grade, consumer-facing tenant base that has only ever been tested in a benign cycle is genuinely investment-grade-equivalent in credit terms. We take a view on both: growth fades gradually toward the high-single digits rather than collapsing, and credit is better than the “BB” label implies but is not recession-proof. The business is a genuine quality compounder with a real, if narrow, moat; the shares are fair against their own history and attractive on a growth-adjusted basis, but carry an absolute premium that leaves little margin for error. This is a name to own on weakness and trim into multiple expansion, not to chase.

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United Bank Limited has spent the last two years executing the most aggressive balance sheet transformation in the history of Pakistani banking. Deposits have grown from roughly Rs 2.6 trillion at the start of 2024 to a record Rs 6.1 trillion at June 2026, lifting UBL from a mid-tier position to the second-largest bank in the country by deposits. Over the same period, the bank has become, by a wide margin, the most profitable bank in Pakistan. It earned Rs 128 billion in 2025, up 59 percent, and in the first quarter of 2026 it became the first Pakistani bank ever to report more than Rs 100 billion of pre-tax profit in a single quarter. The board has paid shareholders record dividends alongside these results.

The central investment question is whether this represents durable shareholder value creation or a superbly timed trade. The honest answer is that it is both, and the distinction matters for what an investor should pay today. A large part of the recent earnings surge came from a leveraged position in long-duration government securities, funded with repo borrowings and rapidly mobilised low-cost deposits, built as interest rates fell from 22 percent in mid-2024 to 10.5 percent by the end of 2025. That position generated a 108 percent jump in net interest income in 2025 and large realised capital gains in 2026. It also concentrates the balance sheet: investments of Rs 9.9 trillion represent about 78 percent of total assets, borrowings of Rs 6.6 trillion exceed the entire deposit base, the advances-to-deposits ratio sits near 27 percent, and the Basel leverage ratio of 3.04 percent is barely above the 3.0 percent regulatory floor.

The fragility of carry earnings was demonstrated within a single quarter. When the State Bank raised the policy rate by 100 basis points in April 2026, the revaluation surplus on UBL’s bond book fell by roughly Rs 113 billion net of tax, equity dropped by Rs 83 billion despite a record accounting profit, and the consolidated capital adequacy ratio declined from 21.0 percent to 16.4 percent in three months. Reported profit and economic reality diverged: UBL booked a Rs 49 billion quarterly profit while total comprehensive income was a loss of Rs 63 billion.

None of this negates the genuine franchise progress. Current accounts grew 71 percent in 2025, fee income rose 48 percent, the bank leads the market in home remittances, the Islamic network has reached 775 branches, and the Silkbank amalgamation added scale and a consumer book at modest cost. These are the durable components of the story, and they are considerable. Our view is that UBL is a strengthened franchise trading at a valuation, around 2.7 times book value, that already pays for much of that strength, with near-term earnings that remain unusually dependent on balance sheet positioning rather than customer business. The total return case over the next two to three years rests primarily on the dividend, which currently yields around 7 percent, plus the bank’s ability to convert its enlarged deposit base into recurring core earnings before the rate-cycle windfall fades.

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Introduction

We review Gore Street Energy Storage Fund’s results for the financial year ended 31 March 2026, published on 15 July 2026. This was, on any reading, a punishing year for reported value: net asset value fell from £519.3m (102.8p per share) to £378.3m (74.9p), a net asset value total return of -23.9%. The decline was overwhelmingly a valuation event rather than an operational failure as the portfolio generated more revenue than the prior year and maintained fleet availability of 94.5%, however for an asset-value-focused investor the distinction matters less than the magnitude. The central question we pose, consistent with our house discipline, is whether the marked-down 74.9p carrying value is now conservative, fair, or still optimistic, and what evidence from private markets and forward power curves would move it. GSF trades at roughly a 35% discount to that reduced NAV, implying a market price in the region of 49p against a portfolio that private buyers have very recently paid full net asset value to own. That gap is the opportunity and the risk in equal measure. The new Board, fully refreshed by 1 February 2026 and chaired by Angus Gordon Lennox, has responded with a strategy predicated explicitly on closing the discount through disposals at or above book. We assess whether that plan is credible and whether the underlying assets support it.

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Introduction

Wireless connectivity is the invisible utility of modern life. Every call, every stream, every payment made on a mobile device passes through a physical network of antennae mounted on steel structures, and those structures that are unglamorous, largely unchanged in design for decades are among the most durable pieces of real estate ever created. A tower built once can serve multiple tenants for generations, carriers cannot deliver their service without it, and relocating equipment is so expensive and operationally risky that tenants almost never leave. The economics of owning the vertical real estate beneath the wireless industry are, in short, exceptional.

American Tower Corporation is the largest independent owner, operator and developer of multitenant communications real estate in the world. At the end of 2025 the company owned and operated a portfolio of approximately 149,700 communications sites: around 42,200 in the United States and Canada, 32,500 in Europe, 47,100 in Latin America and 27,900 across Africa and Asia-Pacific. Through its CoreSite subsidiary, acquired in 2021, it also owns 30 interconnection-rich data centre facilities across eleven US markets. The company operates as a REIT for US federal income tax purposes and reports across six segments, with property operations accounting for roughly 97 per cent of revenue.

For the financial year ended 31 December 2025 the company generated total revenue of approximately $10.65 billion, adjusted EBITDA of around $7.1 billion at a margin of roughly 66 per cent, and attributable AFFO per share of $10.76, up 8 per cent year on year. Net leverage stands at 4.9x, comfortably within the company’s 3–5x target range and the lowest among its listed tower peers.

The investment case we set out in this report is not one of dramatic mispricing or a catalyst-rich special situation. It is a quality-at-a-reasonable-price argument: a business with contracted, escalating, low-churn revenue of over $54 billion in future non-cancellable lease commitments, which has spent the past two years exiting its weakest markets, repairing its balance sheet and redirecting capital towards its best assets, and which now trades at a free cash flow yield of approximately 7 per cent at a moment when the industry’s capital cycle is turning in favour of incumbents.

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Lucky Cement is the largest cement producer in Pakistan and the flagship of the Yunus Brothers Group, one of the country’s most consequential industrial families. It operates roughly 15.3 million tonnes per annum (mtpa) of domestic capacity across two strategically separated plants, holds joint-venture cement positions in Iraq and the Democratic Republic of Congo, controls a 660MW Thar lignite power plant, and consolidates a chemicals and pharmaceuticals platform (LCI Pakistan, the former ICI Pakistan) and an automotive assembler (Lucky Motor Corporation). On a trailing twelve-month basis to March 2026 the group generated PKR 494 billion of revenue, PKR 111 billion of EBITDA and PKR 83 billion of attributable net income, earning a 22% return on equity while carrying an essentially neutral net debt position.

The question this report addresses is not whether Lucky has performed well. Over the past five fiscal years attributable earnings have compounded at roughly 35% per annum, through the most hostile macroeconomic sequence in Pakistan’s modern history: a sovereign near-default, a 22% policy rate, a rupee that lost more than a third of its value, seaborne coal prices that quadrupled, and a domestic cement market that management itself concedes has not grown in six to seven years. The question is what structurally explains that outperformance, and whether the explanation survives contact with Pakistan’s next decade.

Our answer rests on four propositions. First, Lucky’s advantage in cement is a genuine cost and positioning advantage rather than a pricing one: it is the only producer with large-scale plants in both the North and South zones, the only one with a proprietary export terminal at Karachi Port, and among the most aggressive adopters of self-generated and renewable power, with roughly half to 55% of captive power needs now met from waste heat recovery, solar and wind. In an industry running at 55–60% utilisation, where the marginal tonne is fought over on cost, this is the difference between earning through the cycle and merely surviving it.

Second, the diversification programme, often dismissed as conglomeration, has functioned in practice as a deliberate hedging of the Pakistan cement cycle. International cement in Iraq and the DRC runs at 85–95% utilisation and earns hard-currency-linked margins; Lucky Electric converts domestic lignite into contracted power cash flows; LCI and Lucky Motor add consumer and industrial cyclicality that is imperfectly correlated with construction. In FY25, a year in which domestic cement demand fell 3%, group earnings rose 17%.

Third, capital allocation has been unusually disciplined by frontier-market family-group standards: two share buybacks in FY23 executed near cyclical trough valuations, a roughly 9% reduction in the share count between FY22 and FY25, expansion decisions timed counter-cyclically, and a refusal to add domestic cement capacity into an oversupplied market. The corollary, a token dividend and a payout ratio near 7%, is the principal governance objection to the stock, and we treat it as a live risk rather than a footnote.

Fourth, we think the market partially misreads the equity. At roughly 7.9x trailing and about 6x forward earnings, with an EV per tonne below the domestic industry average despite the highest-quality asset base, the stock is priced substantially as a Pakistan cement cyclical. Close to half of consolidated earnings now originates outside domestic grey cement. The embedded copper-gold exploration option in Balochistan, the Iraq and DRC expansions, and the power annuity are carried at little implied value. The offsetting truth is that the holding-company structure, thin payout and Pakistan’s sovereign risk premium are precisely why the multiple is low; a re-rating requires either distribution reform or sustained macro normalisation, neither of which is guaranteed.

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Engro is the closest thing the Pakistan Stock Exchange has to a genuine long-duration compounder, but the mechanism is widely misunderstood. The company did not compound by holding one great business. It compounded by executing a repeatable playbook over three decades: identify a structural deficit in the Pakistani economy (nutrients, protein, gas, power, connectivity); build the first-of-its-kind asset that closes it; run it to operational excellence; then monetise the mature asset and recycle capital into the next deficit. The 2016 sale of control in Engro Foods to FrieslandCampina for USD 446.8m, the 2018 sale of 29% of the LNG terminal holding company to Royal Vopak, the 2013 IPO of Engro Fertilizers, the record PKR 11.6bn buyback of 2023 and the PKR 48/share dividend year of 2023 are all expressions of the same discipline. Engro behaves less like a family conglomerate and more like an infrastructure private-equity firm with a permanent listed balance sheet.

The last decade validated the model under stress. Between 2015 and 2025 Pakistan endured two IMF programmes, a sovereign near-default, depreciation from roughly PKR 105 to over PKR 280 per US dollar, inflation peaking near 38% and a 22% policy rate. Through this, consolidated revenue grew from PKR 184bn in 2015 to PKR 598bn in 2025, carried by businesses selected for macro resilience: urea priced against import parity with local-currency gas costs; an LNG terminal and Thar power assets earning contracted, largely dollar-indexed capacity payments; PVC priced off international benchmarks. The portfolio was engineered as a rupee-crisis hedge that pays cash, and shareholders were paid accordingly: dividends of PKR 25, 34 and 48 per share in 2021-2023, alongside the largest buyback in PSX history.

Three structural changes define the next decade. First, the January 2025 Scheme of Arrangement collapsed the two-tier Dawood Hercules/Engro structure into a single listed vehicle, Engro Holdings, removing one layer of holding-company friction and widening the investment mandate. Second, the growth engine has pivoted from energy to digital infrastructure: the June 2025 completion of the USD 563m Deodar transaction with Jazz/VEON made Engro Pakistan’s largest independent tower company, with roughly 15,000 sites and over 53% market share, funded through PKR 133bn of Islamic financing and a deliberate dividend suspension. Third, the intended thermal exit failed when the Liberty consortium SPAs signed in April 2024 were terminated in April 2025, leaving Engro holding coal-linked power assets it had marked for sale, plus the earnings noise of a large impairment reversal.

The question today is not whether Engro compounded (the record is strong on a dividend-inclusive rupee basis) but whether the engine survives its own maturity. The bull case: the tower platform replicates the LNG playbook, fertilizer remains a cash annuity, and the simplified structure narrows a conglomerate discount that Topline Securities’ 2025 sum-of-the-parts work put at roughly 39% at PKR 229. The bear case: macro recidivism, gas and circular-debt risk to the annuities, tower integration and leverage risk, and the reality that PSX investors chronically under-price family-controlled allocation vehicles with paused dividends. Our judgment: the model is intact, the current phase is a reinvestment trough rather than terminal maturity, and the principal risks are macro and perception risks rather than operational ones.

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Introduction

OMV Aktiengesellschaft traces its origins to 3 July 1956, when Österreichische Mineralölverwaltung Aktiengesellschaft was registered in Vienna as successor to the Soviet Mineral Oil Administration, the entity that had managed Austria’s oil and gas assets during the Soviet occupation zone of the post-war period. Under the Austrian State Treaty of 1955, control of these assets passed to the newly independent Austrian state, and the company was established with a mandate to secure the country’s energy supply. The Schwechat refinery near Vienna began operations in 1960, establishing OMV’s crude processing base, and the company’s first natural gas supply contract, signed with the Soviet Union in 1968, marked the beginning of its role as a gas intermediary between East and West. The Trans-Austria Gas Pipeline, commissioned in 1974, cemented Austria’s position as a regional transit corridor, a role that remains structurally important to OMV’s Gas Marketing & Power business today.

The company’s transformation from a wholly state-owned national champion into an internationally listed integrated group began with its initial public offering in December 1987, when Österreichische Industrieholding AG reduced its stake below 100% for the first time. Diversification into petrochemicals followed in 1990 with the acquisition of Chemie Linz Group, a decision that, three and a half decades later, underpins the Borouge Group International transaction discussed later in this report. The company adopted its current short-form name, OMV, in 1995. Two further transactions defined its regional footprint: a stake in Borealis in 1998, later increased to full ownership, and the acquisition of a majority interest in Romania’s Petrom in 2004, which gave OMV its Central and Eastern European production and retail base and remains, through OMV Petrom, one of the group’s most important subsidiaries. A 15% stake in ADNOC Refining and ADNOC Global Trading, acquired in 2019, provided OMV’s first direct link into Gulf refining and trading economics, a relationship that has since deepened considerably.

OMV’s ownership structure reflects this history of state origin and subsequent internationalisation. As at the most recent disclosure, Österreichische Beteiligungs AG, the Austrian state holding company, owns 31.5% of OMV, and the Abu Dhabi National Oil Company, through its international investment arm XRG, owns 24.9%, with the balance in free float. A consortium agreement between ÖBAG and ADNOC governs coordinated behaviour and share transfer restrictions between the two anchor shareholders, though neither holds a controlling stake and OMV operates under a one-share-one-vote-one-dividend principle. In April 2026, OMV announced that Emma Delaney would succeed Alfred Stern as Chairwoman of the Executive Board and Chief Executive Officer with effect from September 2026, marking the first leadership transition of the Stern era, during which the group’s Strategy 2030 and the Borouge transaction were conceived and executed.

Operationally, OMV is organised into three segments. Energy comprises Exploration & Production, Gas Marketing & Power, and a Low Carbon Business; hydrocarbon production stood at 305 thousand barrels of oil equivalent per day in 2025, of which roughly 40% was natural gas, and the group operates approximately 30 terawatt-hours of gas storage capacity together with a gas-fired power plant in Romania. Fuels operates three European refineries — Schwechat in Austria, Burghausen in Germany, and Petrobrazi in Romania — with total processing capacity of around 500 thousand barrels per day, supplemented by a 15% interest in ADNOC Refining and ADNOC Global Trading in the United Arab Emirates, and a retail network of approximately 1,700 filling stations across eight European countries under the OMV, Petrom, Avanti, and VIVA brands. Chemicals, conducted principally through the Borealis subsidiary, makes OMV one of Europe’s largest producers of ethylene and propylene and places it among the world’s ten largest polyolefin producers; this is the segment most immediately affected by the Borouge Group International transaction described below. At the end of 2025, OMV employed 22,315 people across 97 nationalities, with the largest single national groupings being Romanian (46.8% of the workforce, reflecting the scale of OMV Petrom) and Austrian (18.3%).

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Introduction

Iberdrola, S.A. was formed on 1 November 1992 through the merger of two Spanish regional utilities, Hidroeléctrica Española and Iberduero, and remains headquartered in Bilbao. For its first decade the combined entity was a domestically focused Spanish generator and distributor, a profile that began to change decisively after José Ignacio Sánchez Galán joined as Chief Executive in May 2001 and became Executive Chairman in 2006. Under his tenure, the company has invested more than €175 billion in electricity networks, renewable generation and storage, and its market capitalisation has grown roughly twelvefold to exceed €135 billion at the end of 2025.

The international expansion that underpins the group’s current shape was built through three deals. In the United Kingdom, Iberdrola agreed an £11.6 billion takeover of ScottishPower in November 2006, completed in April 2007, giving it a vertically integrated UK utility with both networks and generation. In the United States, the company closed its acquisition of Energy East in September 2008 for approximately €6.1 billion including assumed debt; the business was rebranded Iberdrola USA and merged with UIL Holdings in 2015 to form Avangrid, listed on the NYSE, with Iberdrola buying out the remaining 18.4 per cent minority stake in December 2024 to take full ownership. In Brazil, Iberdrola has held a stake in Neoenergia since 1997, taking majority control in 2017 and progressively increasing its position thereafter; it acquired pension fund PREVI’s residual 30.3 per cent holding in October 2025 and is in the process of taking the business to full ownership and delisting from B3 during 2026. The group describes itself as the world’s largest producer of wind power and supplies energy to close to 100 million people across dozens of countries.

This corporate transformation has been reflected in a sustained period of share price outperformance. Iberdrola’s stock rose from €11.87 at the end of 2023 to €13.30 at the end of 2024 — a total shareholder return of 44.9 per cent that year against 9.3 per cent for the Eurostoxx Utilities index, 30.7 per cent for the Eurostoxx 50 and 21.4 per cent for the Ibex 35 — before extending further to €18.465 by the end of 2025 and above €20 by April 2026, at which point it stood at its highest level since October 2011. Measured over the ten years to March 2016–2026, the shares returned approximately 237 per cent against 127 per cent for the Eurostoxx Utilities index, 85 per cent for the Eurostoxx 50 and 96 per cent for the Ibex 35. By June 2026 Iberdrola’s market capitalisation exceeded €140 billion, making it Europe’s largest utility by that measure and one of the two largest globally.

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Saif Power Limited (SPWL) operates a single 225 MW combined-cycle plant at Qadarabad, Sahiwal, and sells electricity to a single counterparty, the Central Power Purchasing Agency Guarantee Limited (CPPA-G). For most of its operating life since 2010, the asset behaved like an inflation- and currency-protected bond: a dollar-indexed capacity payment delivered a contracted return on equity regardless of whether the plant was dispatched. That model has now been dismantled. We view SPWL as a structurally impaired asset rather than a cyclically depressed one.

The thesis rests on four observations. First, the February 2025 conversion to a Hybrid Take-and-Pay tariff has removed the unconditional return on equity below a 35% dispatch threshold, transferring volume risk from the offtaker to the company at precisely the moment grid demand for thermal generation is contracting. Second, dispatch has already collapsed: plant utilisation fell to roughly 8% in 2024 even as availability was maintained above 94%, meaning the plant is mechanically ready but rarely called. Third, the structural driver of that collapse, the displacement of expensive imported-fuel generation by rooftop solar and cheaper sources in the merit order, is accelerating rather than reversing. Fourth, the residual equity story now depends on capacity-payment cash flows that are themselves the explicit target of an IMF-backed sector reform programme.

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Introduction

Equinix, Inc. (NASDAQ: EQIX) has been one of the more striking beneficiaries of the artificial intelligence infrastructure cycle, with shares closing around $1,064 in mid-June 2026, up roughly 39 per cent year-to-date and delivering a three-year total shareholder return of approximately 49 per cent. The stock touched an all-time high of $1,128.68 in late April 2026, and the company now carries a market capitalisation of approximately $105 billion against a backdrop of record bookings and sustained margin expansion.

The relevance of Equinix to the AI boom is frequently misunderstood. Unlike the gas turbine and grid equipment manufacturers that have become the most obvious ‘pick and shovel’ beneficiaries of the data centre build-out, General Electric Vernova foremost among them, Equinix does not sell capital equipment into data centres. It is the data centre, and more specifically it is the connective tissue between thousands of enterprises, clouds, and networks that increasingly need to sit physically close to one another. Where GE Vernova profits from the construction wave as hyperscale campuses are built, Equinix profits from the operational wave that follows: the persistent, recurring need for interconnection and low-latency compute as artificial intelligence moves from training, which is concentrated in remote hyperscale campuses, to inference, which is distributed and proximity-dependent. Management estimates that AI-related demand now represents 50 to 60 per cent of Equinix’s largest bookings, up from roughly half a year earlier, and eight of the top ten AI model providers and four of the top five neoclouds are actively expanding within the Equinix platform.

This report sets out our updated view of Equinix’s position. We examine the company’s growth over the past three years, the scale and quality of its new development pipeline, the economics of its existing site portfolio and whether rents and energy costs are likely to move in the company’s favour, the industry-wide data centre construction slowdown and its asymmetric effect on Equinix relative to peers, the evolution of returns on invested capital, and the capital expenditure programme that will determine whether the current valuation can be justified looking forward.

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Zarea Limited is routinely described, by its sponsors and by parts of the local press, as Pakistan’s first listed B2B technology marketplace. The more accurate description is less flattering and more interesting: Zarea is a young commodity intermediation business that uses software to organize what has historically been done over phone calls, personal relationships, and informal credit. Whether that distinction matters is the entire investment question. Platforms earn high multiples because they scale revenue without scaling balance sheet and cost. Traders earn low multiples because every incremental rupee of revenue requires inventory, credit exposure, and people. Zarea’s reported financials suggest the company is migrating from the first category toward the second, and investors pricing it as software may be valuing a business that is quietly becoming something else.

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Introduction

Associated British Foods plc has spent the better part of six decades as one of Britain’s most unusual conglomerates. It is a business that, in the same annual report, discusses the sugar price in Europe, the performance of Twinings tea in Australia, and the like-for-like sales of a value fashion chain that operates 486 stores across 19 countries. That discrepancy has been an enduring source of valuation frustration for investors. The market has consistently struggled to price a group where roughly half of revenue comes from farming, processing sugar and manufacturing yeast, and the other half comes from one of the world’s largest physical clothing retailers. The result has been a persistent and deeply embedded conglomerate discount, with ABF’s blended enterprise value sitting at approximately 6x EV/EBITDA as of the time of writing, a multiple that fails to reflect the quality of either business in isolation.

On 21 April 2026, alongside its H1 2026 results, ABF's board announced it had reached a definitive decision to proceed with a demerger of its Retail business trading as Primark from its Food operations, to be known as FoodCo. The separation is to be effected by way of a dividend demerger, under which existing ABF shareholders will receive shares in Primark directly, without any cash consideration, retaining their existing holding in FoodCo simultaneously. Both entities are expected to list on the Equity Shares (Commercial Companies) category of the London Stock Exchange and, given their scale, are anticipated to be constituents of the FTSE 100 on admission. The timetable targets completion before the end of the 2027 calendar year, with a probable sweet spot between June and October of that year, as indicated by ABF's Chairman.

This report initiates coverage on Primark as a standalone investment case ahead of that listing. Primark is, by annualised revenue of approximately £9.5bn, the largest pure-play international apparel retailer that will exist on the London Stock Exchange. It operates a business model that is structurally differentiated from its peers: physical-only stores, no ecommerce fulfilment cost base, a lean central supply chain managed from Dublin, disciplined capital allocation, and a consistent track record of strong free cash flow generation across most market environments. It is also a business confronting genuine structural questions: the competitive pressure from Shein and Temu, the long absence from online retail, and the challenge of reigniting like-for-like sales in a weak European consumer environment. The investment case requires both to be held simultaneously.

We believe the demerger is the right structural decision, that Primark deserves a materially higher EV/EBITDA multiple as a standalone listed entity than it is currently afforded inside ABF, and that the valuation range implied by peer comparisons, approximately 10x to 13x EV/EBITDA represents a substantial re-rating from today's blended 6x. We are constructive on the long-term case and cautious on the near-term execution risk.

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The standard reading of OGDC is by now almost ritualistic. It is the large, lethargic, government-controlled incumbent. It is over-owned by indices and under-loved by analysts. Its receivables are a black hole, its production is in gentle decline, and its capital is held hostage by a state that views it as a fiscal utility rather than a growth enterprise. Each of these observations contains some truth, and each, taken in isolation, justifies the low multiple at which the shares change hands. What the consensus consistently fails to do is assemble these facts into the correct picture, because the correct picture is uncomfortable for a market trained to reward growth narratives and punish complexity.

Our argument is straightforward to state and harder to dismiss once examined. OGDC’s durable advantage is not its scale, though it has scale. It is not its dividend, though the dividend is now the largest in the company’s history. The advantage is positional. OGDC sits on the deepest, oldest, and most strategically located inventory of hydrocarbon acreage in Pakistan, accumulated across six decades of preferential access that no private operator, foreign major, or younger national champion can realistically reconstruct. That positional advantage has been quietly suppressed for years by policy, by pricing, and by the chronic liquidity disease of the Pakistani energy chain. It has not been destroyed. And a sequence of events now unfolding around the Strait of Hormuz is precisely the kind of catalyst that converts suppressed strategic value into realized economic value.

Frame OGDC correctly, and it ceases to be a low-multiple state-owned oil company. It becomes a strategic national energy platform that the market has mistaken for one.

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Interloop Limited is, by most measures, the most successful manufacturing export business Pakistan has produced in the modern era. It began in 1992 with ten knitting machines bought from Italy and a few million rupees of family money. Today it ships hundreds of millions of pairs of socks a year to Nike, Adidas, Puma, H&M, Target, M&S, Zara and Levi’s, runs denim and apparel plants across a large industrial park near Lahore, employs more than thirty-seven thousand people, and is the only Pakistani textile company ever admitted to the MSCI frontier-markets index. Revenue reached about PKR 179 billion in the year to June 2025, having compounded at roughly a third a year in rupee terms since 2021.

The single most useful way to think about the stock is this. Interloop is not really a Pakistani textile company that exports. It is a global apparel-supply franchise that happens to be domiciled in Pakistan, and the market mostly prices the domicile rather than the franchise. That gap is the entire investment question. The outside-in research in this memo broadly supports that reframe, but with two material qualifications the company’s own materials understate, set out below.

The case is not simple. The same year revenue hit a record, net profit fell about two-thirds to PKR 5.65 billion, the dividend was cut by nearly eighty percent, return on equity dropped from the mid-fifties into single digits, and total debt that had roughly tripled in four years to over PKR 90 billion suddenly looked heavy against a thinner stream of earnings. For a moment the textbook compounder looked like a textbook warning about debt-funded growth meeting higher interest rates and a hostile tax change. Both pictures are real, and the truth sits in the tension between them.

The early evidence from late 2025 into 2026 is that the durable advantages are outlasting the cyclical pain. First-half profit to December 2025 rose roughly fourfold to about PKR 5.9 billion, gross margins widened, finance costs eased, and the company paid its first interim dividend in two years. On trailing twelve months the business now earns around PKR 10 billion, and the trailing multiple has compressed back toward the low teens. The recovery looks cyclical rather than structural, but the share has already moved to anticipate it, so the easy money has probably been made.

Two qualifications the bull case must absorb. First, the industry tailwinds Interloop cites are weaker and more two-sided than presented. McKinsey’s buyer surveys put Bangladesh, India and Vietnam, not Pakistan, at the top of brands’ sourcing-growth plans; H&M and Inditex have been shifting Pakistani volume toward Vietnam and Bangladesh; and Bangladesh, far from being in structural retreat, grew garment exports ~9% in FY25 and is on track to cross US$50 billion in 2026, with more LEED-certified green factories than any country on earth. Interloop has been winning orders the wider Pakistani industry has not, which makes the company a genuine outlier, but the rising tide it invokes is, at the macro level, lifting its competitors faster. Second, Pakistan’s policy drag is structural, not a one-off. The 2025 tax shock that gutted earnings is not reversing: the sector still carries an effective tax burden the trade bodies put near 68%, industrial power costs roughly 80% above India’s, and over PKR 320 billion of refunds remain stuck. The FY26–27 budget is widely expected to leave the export tax regime broadly intact.

Set against that, the company-quality evidence is strong and corroborated from the customer side. Independent peer data confirm that scaled, vertically integrated, audited suppliers earn structurally higher and steadier margins (Shenzhou ~19% net, Eclat ~21% operating) and trade at clear premiums; that brands are consolidating volume into fewer strategic vendors; and that Interloop’s seat on Nike’s sustainability council is the kind of status that does not move on price. The franchise bent in 2025; it did not break, and it is already recovering, the signature of a durable business.

The verdict is unchanged in direction but narrower in size than the original draft implied. Interloop has built something durable, and the market still prices a country rather than the company. But the deep discount that made the stock a near-automatic buy in the 2023 crisis has largely corrected; consensus targets clustering around PKR 90–110 imply solid rather than spectacular upside; and the remaining return is conditional on the apparel ramp filling, deleveraging continuing, and a policy environment that is manageable rather than friendly. The single variable that links the whole thesis is capacity utilisation at the apparel park. Watch it above all else.

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Introduction

The energy transition is the defining infrastructure theme of our generation. Solar and wind capacity is being added to electricity grids at a pace that has no historical precedent, yet the very intermittency that makes these technologies clean creates a fundamental engineering problem: the grid must be balanced in real time, every second of every day, and renewable generation cannot be switched on and off at will. Battery energy storage systems (BESS) solve this problem. They absorb surplus electricity when the grid does not need it and discharge it when it does, providing the flexible, millisecond-responsive service that grid operators require to keep the lights on. Without large-scale storage, the energy transition stalls.

Gore Street Energy Storage Fund plc is London’s first listed energy storage fund. It has been investing in utility-scale BESS assets since its IPO in May 2018 at 100p per share, building a portfolio that spans five electricity grids: Great Britain, the Island of Ireland, Germany, Texas (ERCOT), and California (CAISO). At the time of writing, the Group has 753 MW of energised capacity and a total portfolio of 1.25 GW, making it one of the largest listed BESS operators in the world by operational capacity.

The investment case at first glance appears straightforward: real, operational infrastructure assets generating cash flows, held by a fund trading at a 41% discount to its independently audited net asset value of 87.9p per share. At 53.8p, the shares imply a valuation of roughly £272 million against a portfolio that private market buyers like large utilities, sovereign wealth funds and pension institutions are reportedly paying NAV-supportive prices to access. This is a disconnect that we believe is closing, unevenly and slowly, but closing, nonetheless.

The case requires some patience and a clear-eyed understanding of what has gone wrong. The discount is not irrational: it reflects three years of dividend cuts, a sustained revenue collapse in the Great Britain ancillary services market, dividends funded from capital rather than income, and a credibility deficit that accumulated between 2022 and 2025. The question we seek to answer in this report is whether those headwinds are now turning, whether the underlying asset quality justifies the current price, and what conditions must be met for the market to close the gap to NAV.

We are bullish on the structural case for battery storage as an asset class. We are cautious on the near-term execution risk at GSF specifically, and the share price will remain hostage to management’s ability to demonstrate, through consistent quarterly delivery, that the nadir is behind them. What we do believe is that the current discount offers a margin of safety that makes this an asymmetric opportunity for investors willing to take a 24–36 month view.

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