Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

RiskRisk RewardReward– SGH Limited- SGH(SGH.AX)Limited (SGH.AX)

A clear beneficiary of Australia's capex boom

PRICE TARGET A$49.00 OVERWEIGHT THESIS

P/E relative: 18x P/E multiple applied to FY27e EPS, +1 standard deviation to the 5-year Capex Cycle Tailwinds: Australia is in the

historical average P/E early stages of a structural capex upcycle

across housing, defence, energy transition,

SOTP: Multiples are set in line with global peers, including Caterpillar distributors (FTT, TIH), mining, data centres and the Brisbane 2032

US equipment rental companies (SUNB, URI), and construction materials companies (CRH, Olympics. We expect investment to outpace

HOLN, HEI, VMC, MLM). Our SOTP implies a group valuation of ~14.5x FY27E EBIT. GDP. SGH’s portfolio is well aligned to these

long‑duration public and private investment

DCF: WACC 8.0%, terminal growth rate 3.0%. themes.

Strong Value Proposition: WesTrac’s

A$48.83 exclusive CAT dealership rights, Coates’

Consensus Price Target Distribution A$42.50 A$55.00 national scale and industrial services

MS PT offering, and Boral’s vertically integrated

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates footprint underpin pricing power, cost

discipline and operating leverage.

Capital Management & M&A: SGH has a

RISK REWARD CHART strong M&A track record, disciplined capital

allocation and potential upside from

value‑accretive acquisitions.

AUD

A$61.00A$61.00(+39.14%)A$61.00(+39.14%)(+39.14%)

Consensus Rating Distribution

75% Overweight

A$49.00A$49.00(+11.77%)A$49.00(+11.77%)(+11.77%) 25% Equal-weight

45 A$43.84A$43.84A$43.84 0% Underweight

MS Rating

30 Source: Refinitiv, Morgan Stanley Research

A$27.00A$27.00(-38.41%)A$27.00(-38.41%)(-38.41%)

JUL '25 JAN '26 JUL '26 JUL '27