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Research evidence excerpt

Asia Pacific Equity Research

Australia First to Market

15 August 2026

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QBE Insurance Group (Siddharth Parameswaran) (QBE AU, OW)

1H CY26 result: Holding the Line as Rates Roll Over

QBE delivered a 1H CY26 result that was a slight beat on JPM forecasts at the NPAT level, with reaffirmed CY26 guidance.

Whilst headline outlook comments for CY26 were unchanged from February, we note ex cat claims were flattered by

favourable cats/PYD (-2.4% together) and there was better than expected investment income. Management emphasized the

following: (1) they suggest current ROEs / CORs are broadly sustainable, (2) they acknowledge rates are low - and below

inflation; (3) they are shifting capital allocation from certain high capital consumption / loss making segments to pursue growth

in areas they deem attractive; (4) QBE has strong, conservative reserving which should result in ongoing releases; and (5)

capital levels are high-quality capital (plus conservative reinsurance/cat allowances) which should allow for continued growth,

but if they can’t find growth at acceptable return hurdles, it gives them the option of capital management. We think that in the

short to medium term, QBE can hold the COR given conservative reserving and perils allowances, although our cycle concerns

remain. We don’t have concerns on CY26 guidance, but will need to watch how tough cycle pressures end up to see the

outlook for CY27 and CY28. QBE remains our preferred pick among the general insurance underwriters, given it remains

cheap on a PE basis.

Storage King Group (Richard Jones, CFA) (SKG AU, OW)

~20% earnings re-set vs ~35% discount to NTA in consolidating asset class

SKG delivered a softish FY26 result, with FFO of $82.1m (6.24¢ps), -3.4% on pcp and 1.5% below our $83.3m forecast, due to

lower operating profit than we expected. FY27 DPS was rebased 27% to 4.5¢ps on a widened 80-100% payout, implying FFO

~5.1¢ps (-19%) as WACD lifts >100bp. NTA rose 1.7% to $1.77 and gearing stepped up 440bp to 33.7%. Weaker operational

results and outlook, a sharp rise in the average cost of debt and ~30% of assets as non-stabilising severely weigh on near-term

earnings.…