PGI2

 PGI2

https://plato.com.au/global-strategies/plato-global-shares-income-fund-active-etf/#

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The Plato Global Shares Income Fund (Active ETF) (ASX: PGI2) is an active exchange-traded fund designed to maximize income for pension-phase investors and SMSFs. It provides Australian investors with convenient, listed access to a globally diversified dividend strategy that targets an attractive, consistent monthly income stream.

This is the global version of PL8

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Why PGI2?

Many Australian investors face heavy "single-economy" concentration risk by relying on just a few domestic dividend payers (like major banks and miners), which can suffer from low yields or dividend cuts. PGI2 solves this by: [1, 2]

Diversifying Globally: Giving investors exposure to large-cap global sectors generally underrepresented on the ASX—such as global healthcare, technology, and consumer staples. [1, 2]
Focusing on Pure Cash Dividends: The fund generates its distributions purely from actual cash dividends paid by its portfolio companies. [1, 2]
Monthly Distributions: Delivering its target yield (historically around 6% p.a. after fees) through consistent monthly payments to unitholders. [1, 2]

Fund Overview at a Glance

Issuer / Manager: Plato Investment Management
Benchmark: MSCI World ex Australia, Net Returns Unhedged Index
Management Fee: 0.85% per annum
Portfolio Composition: Typically holds between 100 to 600 global stocks; no single stock represents more than 3% of the portfolio.
Launch Date: Listed on the ASX in May 2026, though the underlying unlisted strategy has a track record exceeding a decade

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Key Fund Performance & Metrics

Last Closing Price: $11.47 AUD (as of market close on September 25, 2026).
Recent Momentum: Up 1.77% over the past week and 6.70% year-to-date (YTD).
Fund Market Cap: Approximately $369 million AUD.
Trailing Dividend Yield: Estimated at 2.23% (distributions are typically managed actively to optimize yield relative to global market cycles).
Recent Distributions: The fund paid cash distributions of 4.09¢ per unit in August 2026 and 4.35¢ per unit in September 2026. [1, 2, 3]

Strategic Investment Profile

Income Optimization: Focuses on extracting dividends from global companies, leaning into volatile price movements ahead of ex-dividend dates to boost returns.
Broad Diversification: Allocates capital internationally across multiple sectors including technology, software, energy, and telecommunications.
Tax Efficiency: Tailored specifically to capture franked distributions and reduce tax leakage for zero-to-low tax environments like superannuation pensions

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Co-fermented coffee

 Co-fermented coffee is a specialty coffee processed by adding external ingredients, such as fruits, herbs, or spices, to the coffee cherries during the fermentation stage to create distinct and vibrant flavor profiles. 

This natural process can result in intense fruit, spice, or even candy-like notes, but it is controversial within the industry for potentially masking the coffee's natural flavor and leading to disqualifications in competitions, according to some industry professionals. 

The Co-Fermentation Process

Mother Culture Creation: A "mother culture" is created with microorganisms from coffee plants and fed a mixture of fruit juices, fruits, and sweeteners. 

Cherry Preparation: Coffee cherries are selected based on their sugar content. 

Co-Fermentation: The cherries are pulped and then combined with the mother culture in a sealed tank for a controlled fermentation period. 

Drying: After co-fermentation, the cherries are dried, often in the sun and then under shade, until they reach a specific humidity level. 

Key Characteristics and Benefits

Flavor Innovation: The primary goal is to create unique and expressive flavor profiles, such as tropical fruit or candy-like notes, that are not achievable through traditional methods. 

Natural Flavor Development: Proponents argue that co-fermentation is an authentic way to develop flavor using natural ingredients and microbes, distinguishing it from coffees with added artificial flavors. 

Increased Market Value: Co-fermented coffees can command higher prices, as they offer a way to add value to coffee beans. 

Controversy and Industry Opinion

Natural vs. Artificial: Some argue that co-fermentation, even with natural ingredients, blurs the lines with flavored or infused coffee, which is often viewed negatively in the specialty coffee community. 

Disqualification from Competitions: The practice has led to disqualifications in high-profile competitions, such as the Best of Panama, with officials stating that co-fermented coffees are considered altered from their "natural DNA expression". 

Impact on Farmers: There's concern that co-fermentation could devalue the effort of farmers who invest in traditional processing methods, as it may become easier to achieve distinct flavors through this technique rather than through careful cultivation

Japan coffee growing regions

 Japan isn’t widely known as a coffee-producing country, but it does have a few small and distinctive coffee-growing regions. Because Japan’s climate is generally too cool for coffee, production is limited and considered more of a specialty or artisanal practice.

Here are the key growing areas:

1. Okinawa Prefecture

The heart of Japan’s coffee cultivation

Okinawa has the warmest, most subtropical climate in the country, making it the only region where coffee can be grown reliably outdoors.

Notable characteristics

Arabica coffee is grown, especially Typica and Catuaí varieties.

Farms are small and yields are low, but the quality is often high.

Coffee grown here is sometimes marketed as “Okinawa Coffee” and tends to be expensive.

Major locations

Yomitan Village – One of the best-known producing areas; hosts coffee farm tours.

Higashi Village – Features agroforestry coffee (grown alongside other plants).

Ishigaki & Miyako Islands – Smaller experimental plots.

2. Kagoshima Prefecture (Yakushima & Tanegashima)

Kagoshima, in southern Kyushu, has Japan’s mildest climate after Okinawa. Coffee is grown in:

Yakushima Island

A UNESCO World Heritage site with subtropical lowlands.

Some farmers grow coffee as part of diversified agriculture.

Production is tiny and experimental, but interest has grown in recent years.

Tanegashima Island

Similar climate to Yakushima, with boutique coffee farms exploring small-batch cultivation.

3. Greenhouse / Controlled-Environment Coffee (Various Regions)

Some coffee in Japan is grown in greenhouses or botanical gardens, especially for research or novelty.

Examples include:

Shizuoka (greenhouse-grown coffee at experimental stations)

Kanagawa (Yokohama’s Koganei area has hobbyist growers)

Tokyo (Shinjuku Gyoen and botanical gardens occasionally cultivate coffee plants)

These are not commercial-scale operations but demonstrate Japan’s scientific and artisanal interest.

4. Specialty Microlots & New Experimental Farms

In the last decade, a small wave of farmers across southern Japan—including parts of Wakayama, Miyazaki, and Kumamoto—have experimented with coffee cultivation, usually under protective structures or in sheltered microclimates. Production remains extremely limited but is growing slowly due to specialty-coffee demand.

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What Makes Japanese Coffee Growing Unique?

- High labor and land costs → extremely premium pricing

- Very low yields → beans often sold in tiny lots

- High quality control due to Japan’s precision-focused farming culture

- Appeal to food tourism → farm tours, on-site roasting

- Climate challenges → frequent typhoon exposure, low heat accumulation

Vietnamese coffee

Vietnam is the world's second-largest coffee producer (after Brazil), primarily growing Robusta beans in the Central Highlands, though challenges like climate change and the need for more sustainable practices are impacting the industry. Most coffee is hand-picked and then wet processed, with little focus on natural, honey.

Apart from the Central Highlands (Tây Nguyên), two other coffee producing areas stand out:

The Northwestern Highlands (Tây Bắc) including the Son La highland and Moc Chau plateau areas

and 

The Central Coastal Region (Trung Bộ)... Quang Tri and Nghe An provinces. Particularly in Khe Sanh region.

In the past, the focus was quantity over quality but this is changing.

The country is also the largest Robusta producer globally, with approximately 97% of its coffee output being Robusta, and exports are a major source of income. Recently, a decline in Robusta output has led to higher prices and has farmers exploring other crops like pepper and fruit. 

Key aspects of coffee growing in Vietnam

Dominance of Robusta: Vietnam is the world's largest Robusta producer, with it making up about 95% of its coffee output.  This hardy bean is well-suited for mass cultivation in the region's climate.

Arabica makes up about 5%. This is grown in both North and South regions of Da Lat, Dien Bien, Nghe An, Son La, and Quang Tri, which range in maximum altitude from 1000 to 1400 m.a.s.l  The most common arabica variety in Vietnam is Catimor, which is high-yielding, resilient, and grows at lower altitudes. There are also small farms growing Bourbon and Typica.

Central Highlands (Tây Nguyên): This region is the heart of Vietnam's coffee production, accounting for around 80% of the country's Robusta coffee. The climate is tropical and warm with rainy and dry monsoon seasons. The central highlands includes five provinces: Dak Lak, Gia Lai, Dak Nong, Lam Dong, and Kontum. Altitudes here range between 300 m.a.s.l. and 600 m.a.s.l.

Prominent Vietnam coffee plantation locations in the Central Highlands include: Dak Mil (Dak Nong), Dak Ha (Kon Tum), Chu Se (Gia Lai). Most notably, Buon Ma Thuot in Dak Lak province is recognized as the world’s premier coffee-producing hub.

Export market: Vietnam is the second-largest coffee exporter globally, with a significant portion of its coffee being exported to Europe. Most coffee is exported as green beans for processing elsewhere.

These are some of the northern regions of coffee growing.

Northwestern Highlands (Tây Bắc) 

Dien Bien;

Dien Bien's coffee growing areas are located at an altitude of 900 to 1200 meters above sea level, with some regions reaching up to 1400 meters. The region's mountainous terrain and cool, rainy climate create ideal conditions for high-quality Arabica coffee, similar to the soil in Brazil's Sao Paulo region. 

Son La

The Son La coffee growing area's altitude is typically between 900 and 1,200 meters above sea level, though some sources cite a broader range from 600 to 1,050 meters

Nghe An and Quang Tri are located in the Central Coastal Region.

Nghe An

The altitude for growing coffee in Nghe An is generally between 1,000 and 1,400 meters above sea level

Quang Tri

The primary coffee-growing region in Quang Tri, centered around Khe Sanh, has an average altitude of 350-500 meters. Khe Sanh’s (Quang Tri) and Phu Quy’s (Nghe An) geographical and climatic conditions better suit Catimor varieties. Catimor represents a crossbreed between Caturra (Arabica) and Hybrid de Timor (an Arabica-Robusta hybrid)

Focus on quality: Historically, Vietnamese coffee production focused on quantity. However, there is a growing trend toward improving quality, with farmers experimenting with more sophisticated processing methods for both Robusta and Arabica beans.

Historical context: Coffee was introduced to Vietnam by the French in the 19th century. The industry experienced rapid growth starting in the 1990s due to economic reforms.

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Coffee index. Click here :

https://djjondent.blogspot.com/2024/03/coffee.html

BSL - bluescope

 BSL Bluescope steel

22-july 2026

https://www.bluescope.com/

https://stockanalysis.com/quote/asx/bsl/

https://www.tradingview.com/symbols/ASX-BSL/financials-overview/

https://www.marketindex.com.au/asx/bsl

https://koalagains.com/stocks/ASX/bsl

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ASX:BSL (BlueScope Steel) has experienced a highly cyclical five-year period. The company generated massive pandemic-era profits peaking in FY2022 but has since seen earnings decline significantly due to softer steel spreads and cyclical headwinds. Despite the downturn, BSL maintained a robust balance sheet with minimal debt. [1, 2, 3, 4, 5]

Financial Highlights over the Last 5 Years

• Profitability: Net profit skyrocketed to a record AUD 2.81 billion in FY2022 on the back of historic steel spreads. Since then, profits have progressively tapered down. FY2024 net profit sat at AUD 804 million, before dropping to AUD 83.8 million in FY2025 due to challenging cyclical market conditions and asset impairments. [1, 2, 3, 4]

• Debt: BlueScope has maintained an exceptionally conservative balance sheet, operating in a net cash position for much of this period. As of recent figures, the Debt-to-Equity ratio sat comfortably around 8% to 10%, with cash and equivalents exceeding outstanding debt. [1, 2, 3]

https://stockanalysis.com/quote/asx/bsl/financials/ratios/

These are the D/E ratios for the last 5 years:

2026 - 0.10

2025 - 0.08

2024 - 0.06

2023 - 0.07

2022 - 0.13

• Return on Equity (ROE): ROE followed the broader profit cycle. It spiked to an impressive 32.2% in FY2022 before trending downwards to 10.1% in FY2023 and 7.6% in FY2024. In the most recent trailing twelve months, ROE has compressed to roughly 3.4%. [1, 2]

Recent Developments

• Takeover Bids: In early 2026, BlueScope rejected unsolicited takeover proposals from Seven Group Holdings (SGH) and Steel Dynamics. The final revised A$32.35 per share proposal was spurned by the board as undervaluing the company. This is mostly why I own shares in this company. [1, 2]
• Shareholder Returns and Dividends: BlueScope declared unfranked dividends of A$1.00 & A$0.65 per share (see that crazy spikes in the dividend of Jan & Feb 2026). The board indicated plans to significantly rebase returns, targeting to distribute at least 75% of free cash flow as ordinary dividends (we will see). There is zero franking, so keep this within super. [1, 2]

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PE ratios

Over the last 10 years, BlueScope Steel Limited (ASX: BSL) has traded at a 10-year median P/E ratio of 10.59. Its valuation fluctuates heavily due to the highly cyclical nature of global steel prices and manufacturing margins. [1, 2]

As of July 2026, its current Trailing Twelve Months (TTM) P/E ratio sits at roughly 54.95, driven upward by a sharp drop in earnings per share over the last couple of years. [1, 2, 3]

10-Year Historical P/E Ratio Overview

The following table shows the approximate P/E ratios for BlueScope Steel over the past decade, reflecting a mix of standard financial year-end reports and calendar year closes: [1, 2, 3, 4]

Year [1, 2, 3, 4, 5, 6, 7]	Approximate P/E Ratio	Valuation Context
2026 (Current TTM)	~54.95	Cyclical earnings dip; stock price remains resilient.
2025	~48.13 to 128	Subdued global steel demand compressed compressed margins.
2024	11.23 to 11.5	Moderating earnings but closer to long-term averages.
2023	9.43 to 11.14	Normalization from pandemic-era record highs.
2022	2.58 to 2.61	Historically low P/E due to record windfall profits.
2021	9.27	Strong post-COVID infrastructure boom boost.
2020	~15.5	Industrial slowdowns caused by global pandemic lockdowns.
2019	~6.5	Strong building and construction demand globally.
2018	~9.2	Steady margins across US and Australian divisions.
2017	~12.8	Recovery phase driven by restructuring efficiencies.
2016	~18.5	Turning point from previous loss-making years.

Crucial Financial Insights For BSL

When reviewing BlueScope's historical multiples, keep these factors in mind:

• The "Cyclical Trap": BlueScope often looks cheapest (lowest P/E) at the top of its profit cycle (e.g., 2.58x in 2022) because its immediate earnings are temporarily inflated. Conversely, it looks expensive (high P/E) at the bottom of a cycle when its earnings drop but investors hold the stock anticipating a recovery. [1, 2]
• Long-Term Medians: While the historical 10-year mean is skewed high (~24.4) by occasional low-earnings periods, the 10-year median sits at a lean 10.59. [, 2]
• Forward Expectations: Analysts project a significant rebound in earnings over the next 3 years, which drops its Forward P/E ratio much lower than the current trailing figures. [1, 2]

charts

below $26 its a buy

To have a P/E ratio of 15 at its current trailing twelve months (TTM) earnings, the shares of BlueScope Steel Limited (ASX:BSL) would need to be priced at A$27.15.

Calculation Breakdown

The Price-to-Earnings (P/E) ratio is calculated using a straightforward formula: [1, 2]
P/E Ratio=Share Price  /  EPS

Current TTM Earnings (oct 2026): BlueScope Steel's most recent trailing twelve months earnings per share (EPS) sits at A$1.81 (following its surged FY2026 full-year financial reports).
Target Multiple: The target P/E ratio is 15.
Implied Share Price: [1, 2]
Target Price=15  x $1.81=$27.15

Current Valuation Context

With BSL currently trading around A$30.04 (giving it a trailing P/E multiple of approximately 16.6x), the stock would need to experience a price decrease of roughly 9.6% to hit a 15x multiple, assuming no changes to underlying net profits

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ROIC Vs WACC

BlueScope Steel (ASX: BSL) has generally achieved an average ROIC (Return on Invested Capital) above its WACC (Weighted Average Cost of Capital) through the economic cycle, despite cyclical volatility. Current metrics place BSL's ROIC around 2.10% to 6.61% (depending on trailing 12-month steel price troughs) against a WACC median of roughly 11.15% (with current WACC near 12.82%). [1, 2, 3, 4]

Cycle Performance and Spread

Value Creation: During peak steel-margin years (such as 2021–2023), BlueScope’s ROIC surged well above 20%, vastly exceeding its historical WACC of ~9% to 11%, generating massive economic value. [1]
Trough Periods: During softer cyclical periods (like FY2025/2026), softening earnings compressed ROIC down to single digits (6.2% to ~2.1%), falling beneath the elevated post-inflation WACC. [1, 2]
Long-Term Target: Management explicitly maintains a core financial framework target to deliver an ROIC > WACC on average through the cycle. [1]

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Buffet analysis

BlueScope Steel’s (ASX: BSL) financial architecture reflects a hyper-cyclical, capital-intensive manufacturing operation that deliberately maintains a conservative balance sheet. [1, 2, 3]

While its volatile Return on Equity (ROE) contradicts Warren Buffett's preference for consistent compounding, its capital allocation strategy closely aligns with standard Buffett benchmarks regarding debt management and shareholder return structures. [1, 2, 3]

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Historical ROE Trends (FY2021–FY2026)

BlueScope’s ROE trends highlight the extreme commoditization and cyclicality of the steel industry, heavily dictated by US hot-rolled coil (HRC) spreads and global supply dynamics: [1, 2, 3]

The Post-Pandemic Peak (FY2021–FY2022): ROE expanded aggressively from 16.7% in FY2021 to a generational high of 32.2% in FY2022, driven by unprecedented global steel spreads and massive earnings surges. [1]
The Downcycle Contraction (FY2023–FY2025): As spreads compressed and input costs normalized, ROE fell dramatically to 9.9% in FY2023, dropped to 7.6% in FY2024, and bottomed out at a cyclical low of 0.7%–3.9% in FY2025 due to structural margin compression. [1, 2]
The Current Recovery (FY2026): For the fiscal year ending June 2026, underlying EBIT jumped to A$1.27 billion, pushing ROE back up to 7.9%–8.10%. This rebound reflects stronger North American operations, specifically its highly optimized North Star mini-mill expansion. [1, 2, 3, 4]

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Capital Allocation & Buffett Benchmarks Comparison

Buffett Benchmark Criteria	Warren Buffett / Berkshire Standard	BlueScope Steel (ASX: BSL) Performance	Strategic Alignment
Consistency of ROE	High & Stable ROE (>15% annually) without using excessive leverage to juice returns.	Volatile ROE (0.7% to 32.2%). Strongly tethered to global steel market cycles.	❌ Mismatch: Fails Buffett's predictable economic moat criteria.
Debt & Leverage Limitations	Conservative Debt/Equity (<0.50). Core operations should fund themselves comfortably.	Debt/Equity stands at 0.08–0.16. Total debt is A$1.77B against A$1.17B cash.	Strong Pass: Extremely fortress-like balance sheet protects against market downturns.
Capital Expenditures	Low maintenance CapEx requirements relative to net cash generation.	Highly capital intensive. A massive A$2.5B multi-year expansion program is only just ramping down.	❌ Mismatch: Fails Buffett's preference for asset-light cash compounders.
Shareholder Return Framework	Prioritize buybacks or special payouts if retained earnings cannot be deployed at high rates.	Target distribution is raised to at least 75% of FCF via massive dividend hikes ($3.00/share across CY2026).	Strong Pass: Capital discipline ensures returns flow to shareholders during cycle pivots.

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Financial Analysis & Strategic Takeaways

1. The High CapEx Burden vs. Retained Earnings Efficiency

Buffett assesses capital allocation by evaluating how much cash a company must sink back into its plants just to remain competitive. BlueScope has been executing a major A$2.5 billion investment pipeline (such as the North Star expansion and domestic modernization). This capital-heavy phase heavily depressed free cash flow down to A$109.5 million in recent cycles. However, as management confirms this CapEx program is finally wrapping up, the capital allocation mix is shifting toward direct shareholder distributions. [1, 2, 3, 4]

2. The Debt "Saving Grace"

A major pillar of the Berkshire Hathaway framework is avoiding structural leverage that can wipe out a cyclical firm during an industry collapse. BlueScope passes this test. Its net debt remains low, and it operates with a healthy Current Ratio of 1.92x. This under-leveraged capital profile made BlueScope a highly attractive corporate target, triggering a best-and-final takeover proposal of A$32.35 per share in early 2026 by an SGH and Steel Dynamics consortium, though the company continues to advance independently. [1, 2, 3, 4]

3. Shareholder Return Pivot

With capital investment winding down, BlueScope rebased its capital framework by declaring A$0.65 regular and A$0.70 special dividends, executing a planned A$3.00 payout per share for the calendar year, and signaling an intent to sustain this elevated distribution baseline into 2027. [1]

While it lacks the predictable consumer moat of a typical Buffett holding, its rigorous financial discipline ensures that capital isn't destroyed through destructive debt or wasteful acquisitions at the top of the market cycle. [1, 2]

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