Wealth Update: Profit Taking Across MAH, SFR & SHA as ASX Volatility Creates New Opportunities

�The Australian market has had a turbulent start to the year. Investors have had to navigate geo Contact Me for Wealth Management Information ( mark.elzayed@investorpulse.com.au ) Hi Eason, *Wealth Update: Profit Taking Across MAH, SFR & SHA as ASX Volatility Creates New Opportunities* The Australian market has had a turbulent start to the year. Investors have had to navigate geopolitical tensions, persistent inflation pressures, energy price volatility and changing expectations around interest rates. Despite the uncertainty, our portfolios have continued to demonstrate resilience and strong long-term performance relative to the broader market. *Turning Strong Positions into Realised Gains* *Over recent months, we have actively managed the portfolios by selectively taking profits in positions that delivered substantial upside.* One of the recent highlights was *Macmahon Holdings Limited (ASX: MAH)* , where we locked in a gain of 34.61% from an average entry price of approximately $0.65 per share. The company continued to benefit from strong mining activity across Australia, improving operational execution and growing contract wins. Over the trailing twelve months, revenue climbed to approximately $2.56bn, while net profit nearly doubled year-on-year to around $92m. The company also continues to benefit from a growing underground mining pipeline and stronger cash generation. Another major contributor was *SHAPE Australia Corporation Limited (ASX: SHA)* , where we secured an impressive 70.42% upside following our average entry price around $4.46 per share. The company has delivered exceptional operational momentum, with revenue rising more than 33% during the latest reporting period and trailing twelve-month revenue now exceeding A$1bn. Net income increased more than 43% year-on-year, supported by strong project execution, acquisition synergies and robust demand across commercial fit-outs and refurbishment activity. *GR Engineering Services Limited (ASX: GNG)* has also remained one of our strongest industrial holdings. We progressively built the position with an average entry price of approximately $2.86 per share before securing gains of around 76.67%. The company continues to benefit from elevated investment activity across critical minerals, gold and copper developments, alongside robust engineering demand throughout the mining sector. *Sandfire Resources Limited (ASX: SFR)* also performed strongly over the period, allowing us to partially realise profits while securing approximately 40.12% upside from our average entry price near $12.95 per share. Copper market fundamentals continue to remain favourable, supported by electrification demand, constrained global supply and increasing long-term investment into renewable infrastructure and grid expansion. On the other hand, we exited *Ricegrowers Ltd (ASX: SGLLV)* , despite the company continuing to offer an attractive dividend yield of approximately 5.88%. While the yield profile remained appealing, we believed there were more compelling opportunities elsewhere in the market offering stronger growth potential and better risk-adjusted returns. Contact Me for Wealth Management Information ( mark.elzayed@investorpulse.com.au ) *Short-Term Volatility, Long-Term Outperformance* *Our growth portfolio* experienced modest short-term weakness given its higher-beta positioning and the broader market pullback earlier this year following the energy-driven selloff. Year-to-date, the portfolio is down approximately -1.5%, compared with the ASX 200 decline of around -0.48%. However, the longer-term picture remains extremely encouraging. Over a rolling 12-month period, the growth portfolio advanced approximately 27.2%, significantly outperforming the broader market return of roughly 3.4%. Over the past three years, the strategy has delivered cumulative performance of approximately 116%, outperforming the benchmark by nearly five times. *Our income portfolio* also experienced limited short-term weakness, declining approximately -1.4% year-to-date versus the ASX 200 decline of around -0.48%. Importantly, the strategy continues to operate with lower volatility, approximately 6% below the benchmark, while maintaining strong risk-adjusted returns. Over the past 12 months, the income portfolio returned approximately 9.2%, compared with 3.4% for the index. Including dividend reinvestment, the strategy has generated cumulative three-year returns of approximately 48.9%, while continuing to provide an attractive portfolio yield near 4.86%. Contact Me for Wealth Management Information ( mark.elzayed@investorpulse.com.au ) Meanwhile, *our balanced portfolio* has been the standout performer during this more difficult market environment. Year-to-date, the balanced strategy advanced approximately 2.4%, materially outperforming the ASX 200 decline of -0.48%. Over the past 12 months, the portfolio generated returns of approximately 19.2% compared with 3.4% for the benchmark. Including dividend reinvestment, the balanced portfolio returned approximately 50.8% over the past three years, more than double the ASX 200 performance of around 22.3%. *What Could Drive Stocks from Here?* *Looking ahead, we continue to see several possible scenarios for the Australian market over the remainder of the year.* *Base Case Scenario: Gradual Recovery and Earnings Stability (50% Probability):* Our central scenario remains constructive for the ASX 300. Under this environment, inflation gradually eases while commodity prices remain relatively supportive, allowing earnings growth to stabilise into FY27. Australian corporates continue to report relatively healthy balance sheets, and recent reporting seasons have shown resilience across industrials, infrastructure and selected mining sectors. Earlier this year, Australian companies collectively delivered one of the strongest earnings upgrade cycles in recent years, with FY2026 profit expectations increasing approximately 10% across the market. *Bullish Scenario: Rate Cuts and Risk Appetite Returns (25% Probability):* A more optimistic scenario would involve a faster decline in inflation, softer oil prices and eventual interest rate cuts from global central banks. ** Under this environment, cyclical sectors including technology, consumer discretionary and small-cap industrials could rebound strongly. Lower discount rates would likely support higher market valuations while improving household spending could provide additional earnings momentum across the domestic economy. *Bearish Scenario: Energy Shock and Sticky Inflation (25% Probability):* The main downside risk remains a renewed escalation in geopolitical tensions and another sharp move higher in global energy prices. If oil prices remain elevated above US$100 per barrel for an extended period, inflationary pressures could intensify again, forcing central banks to maintain tighter monetary conditions for longer. Earlier this year, geopolitical tensions and higher energy prices triggered a sharp market selloff that erased roughly A$90bn from the Australian share market in a single session. *In such an environment, defensive sectors and high-quality dividend-paying companies would likely continue to outperform while higher-beta sectors remain volatile.* *Staying Focused on the Bigger Picture* While markets may continue to experience short-term volatility, we remain confident in the long-term opportunities available across the Australian market, particularly within quality industrial businesses, infrastructure-linked companies, selective mining services firms and cash-generative dividend payers. Our investment approach remains disciplined, selective and focused on long-term capital compounding. We continue to prioritise balance sheet strength, sustainable earnings growth and downside protection while remaining patient and opportunistic during periods of market dislocation. As always, thank you for your continued trust and confidence. Contact Me for Wealth Management Information ( mark.elzayed@investorpulse.com.au ) **Free Disclaimer:* The base platform has no monthly fees, however, brokerage fees apply when buying or selling stocks through the platform. Many thanks for reading our updates! Feel free to call us or reply to this email with suggestions. If you have some friends you think would be interested, let us know - we have a referral program available. *Very important & unique disclaimer provided by our legal team* This email and any files transmitted with it are confidential. 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