ASX Earnings: Market Likes Reining in Costs, but It Could Be too Early

We raise our fair value estimate for wide-moat ASX by 3% to AUD 77 with first-half fiscal 2025 results. The exchange showed the first signs of stabilization in cost growth, an issue since the botched replacement project for its clearing system. Combined with 6% growth in operating revenue on the previous corresponding period, due to high volatility around the US election, underlying net profit after tax grew a solid 10% on the PCP. Shares rallied on the news of cost containment but remain undervalued and not reflective of the exchange’s long-term margin potential. The exchange declared an AUD 1.11 per share dividend for the period.