Ashmore Group Share Price (ASHM)

This was always going to be a difficult set of results as EMs fell more than most on Iran war concerns.

That they also had a large withdrawal to move to net outflow was disappointing, but the Japan Post arrangements should be a decent inflow and EMs should bounce back later in the year once the war effects start correcting.

Could still suffer a bumpy ride as US/Iran do or dont work it out.

One to buy when the war ends / the disruption eases in EMs and the US thinks it is safe to start investing in them again.

EM will be more volatile in the Macro climate. I'll wait for drops if they come before going back in. Good results though.

I think it's appropriate to strip out the seed investment capital gains but not the 9m investment income (which is interest and divi income from the seeds, which IMO are repeatable and should be considered ongoing profits). That gives 35.2m underlying PBT from the core fund management business and these repeating cash flows in H1. It's reasonable to assume H2 will be considerably better due to the increase in AuM. So let's say they do 45m underlying PBT in H2. So a 90m PBT run rate giving post tax annualised net underlying profits of 67.5m.

That puts it on a 28.2x multiple of underlying run rate net profits. Net profits which assume an improved H2 and add back 18m of profits the company itself sees fit to adjust out.

It does have a strong balance sheet but strong enough to justify that multiple...? I'm not so sure.

Strong results were to be expected as the increased revenue from AUM growth should largely drop through to the bottom line. The FY results will be even better if the AUM grows modestly.

I expect the SP will rise from here….I will be buying more shortly.

EM appears to be the place to invest and Ashmore is benefiting.