Investment Pitches

Pitch Summary:
Business Description: Leading provider of semiconductor design automation software and IP, enabling chip design, verification, and secure software development across AI, automotive, and hyperscaler markets. Thesis: Mission-critical supplier to the semiconductor and AI ecosystem, with durable double-digit revenue growth driven by rising chip complexity and AI workloads. FYQ3 Results: Revenue +14% ($1.6B) and EPS of $3.39 missed management's guidance. Backlog increased to $8.1B. Management guided F4Q25 EPS below expectations. What Happened: Stock fell 36% after reporting earnings due to weakness in the Design IP segment, BIS export restrictions disrupting China design activity, and challenges at a foundry customer. Edgewood's View: We believe the selloff was overdone and IP issue is narrower than investors fear. Management has taken steps to address, and we believe the IP segment can return to mid-teens growth in FY27, following a transition year in FY26. Resulting Action: Met with management immediately following earnings disappointment. Clarified ambiguous guidance and added 170bps to our position.

BSD Analysis:
Edgewood maintains conviction in Synopsys despite significant near-term headwinds, viewing the company as a mission-critical supplier to the semiconductor and AI ecosystem with sustainable competitive advantages. The investment thesis centers on Synopsys' essential role in enabling chip design and verification as semiconductor complexity increases driven by AI workloads and advanced node requirements. While Q3 results showed 14% revenue growth and an increased backlog to $8.1B, the stock plummeted 36% following earnings due to Design IP segment weakness, China export restrictions, and foundry customer challenges that caused EPS to miss guidance. Edgewood believes the market overreacted to what they view as transitory issues, arguing that the IP segment problems are narrower than feared and that management has implemented corrective measures. The fund expects the IP segment to return to mid-teens growth in FY27 after a transition year in FY26, while the core EDA business remains resilient. Following immediate post-earnings management meetings to clarify guidance ambiguities, Edgewood aggressively added 170 basis points to their position, demonstrating strong conviction that the selloff created an attractive entry point for a company with durable double-digit growth prospects in the expanding AI and semiconductor markets.

Pitch Summary:
Business Description: Leading producer (~90% market share) of photolithography machines used in semiconductor manufacturing. ASML's machines enable chips to become smaller and more power efficient every year. Thesis: Secular tailwinds (AI, robotics, cloud, electrification) will continue to drive demand for chips. ASML's EUV & High NA EUV machines continue to be essential equipment and will drive double digit revenue & earnings growth. Q2 Results: Revenue +41% (€7.7B), and EPS +47%. Reiterated FY2025 revenue & EPS guidance. What happened: Stock declined on 2026 revenue growth uncertainty. Edgewood's View: The negative stock reaction had nothing to do with ASML's competitive moat or the size of the market opportunity, rather it was a timing issue related to tariff uncertainty. Over a multi-year period we feel that ASML will compound revenue & earnings at a high teens rate. Resulting Action: Spoke with management. Did additional due diligence on ASML's technology moat. We added 50bps in late July.

BSD Analysis:
Edgewood maintains a bullish outlook on ASML, recognizing the company's near-monopolistic position with approximately 90% market share in photolithography equipment essential for semiconductor manufacturing. The investment thesis is anchored on secular growth drivers including AI, robotics, cloud computing, and electrification that will sustain long-term chip demand, positioning ASML's EUV and High NA EUV machines as critical enablers of Moore's Law progression. Strong Q2 results demonstrated the company's execution with 41% revenue growth to €7.7B and 47% EPS growth, while management reiterated full-year guidance. Despite these fundamentals, the stock declined on concerns about 2026 revenue growth timing, which Edgewood attributes to tariff-related uncertainty rather than any deterioration in competitive positioning or market opportunity. The fund emphasizes that ASML's technology moat remains intact and expects the company to compound revenue and earnings at high-teens rates over multiple years. Following direct management engagement and additional due diligence on the technology moat, Edgewood added 50 basis points to their position, viewing the decline as a timing-driven opportunity rather than a fundamental concern.

Pitch Summary:
Business Description: Leading provider of consumer credit analytics and scoring algorithms that is best known for the "FICO Score"—a three-digit metric used in a variety of consumer credit decisions. Thesis: FICO is the industry standard, used in 90%+ of consumer credit decisions across the US. There is an opportunity to proliferate scores beyond originations and close the Scores' price to value gap, specifically in mortgage and auto. FYQ3 Results: Revenue +20% and EPS +47%. Raised full year EPS. What Happened: Stock declined after FHFA Director Bill Pulte posted on X that government-sponsored enterprises (GSEs) could use an alternate score, creating headline risk around FICO's mortgage score moat and 2026 pricing. Edgewood's View: The market overestimated share-loss and pricing risk; we viewed management as having flexibility in how they wanted to approach Scores monetization and felt confident in the 20%+ multi-year EPS growth algorithm. Resulting Action: Added to the position throughout the quarter (250bps in total), with additions in the post Q3 earnings sell-off after numerous meetings with senior FICO management.

BSD Analysis:
Edgewood maintains strong conviction in Fair Isaac Corporation, viewing the company as the entrenched industry standard in consumer credit scoring with dominant market share exceeding 90% of US credit decisions. The investment thesis focuses on FICO's opportunity to expand score usage beyond loan originations into mortgage and auto sectors while closing the significant price-to-value gap in their scoring business. Despite robust Q3 results showing 20% revenue growth and 47% EPS growth with raised full-year guidance, the stock declined following regulatory headlines when FHFA Director Bill Pulte suggested GSEs could adopt alternative scoring models. Edgewood believes the market significantly overestimated both market share loss and pricing risks from potential regulatory changes. The fund views management as having substantial flexibility in monetization strategies and remains confident in FICO's ability to deliver over 20% multi-year EPS growth. Following extensive due diligence meetings with senior management, Edgewood aggressively added 250 basis points to their position throughout the quarter, including purchases during post-earnings weakness, demonstrating high conviction in the company's defensive moat and long-term growth algorithm despite regulatory noise.

Pitch Summary:
Business Description: Global pharmaceutical company with a leading position in diabetes/obesity and a rich pipeline of follow-on medicines addressing several therapeutic categories. Thesis: Lilly is a leader in diabetes and obesity markets which represent large global patient populations and today remain largely underserved. Excellent management team with a long-term focus on deploying capital towards R&D/serial innovation in therapeutic categories with large unmet needs. Q2 Results: Revenue +38% and EPS +61%. Raised FY 2025 revenue and EPS guidance. What Happened: Stock declined on results from P3 ATTAIN-1 trial – orforglipron (Lilly's oral GLP-1 molecule) delivered 12.4% weight loss at the highest dose – expectations were 13-15% weight loss. Edgewood's View: The market was too narrowly focused on one metric from one trial, demographics impacted results and the totality of data from 5 clinical trials would support approval. After a ~15% price decline, Lilly traded at ~20x 2026 EPS for a company that we believe can compound EPS >20% over the next 5 years. Resulting Action: After research meeting with senior management at LLY HQ, Edgewood added 100bps to our position in August.

BSD Analysis:
Edgewood maintains a bullish stance on Eli Lilly, viewing the company as a dominant player in the rapidly expanding diabetes and obesity markets that serve large, underserved patient populations. The fund's thesis centers on Lilly's leadership position in GLP-1 therapies and management's strategic focus on R&D investment in high-unmet-need therapeutic areas. Despite strong Q2 results showing 38% revenue growth and 61% EPS growth, the stock declined following disappointing Phase 3 trial results for orforglipron, where weight loss of 12.4% fell short of 13-15% expectations. Edgewood believes the market overreacted to a single trial metric, arguing that demographic factors influenced results and that data from five clinical trials collectively support regulatory approval. The fund views the 15% stock decline as creating an attractive entry point, with shares trading at approximately 20x 2026 EPS for a company they expect to compound earnings at over 20% annually for the next five years. Following direct engagement with senior management, Edgewood increased their position by 100 basis points, demonstrating conviction in the long-term growth trajectory despite near-term trial volatility.

Pitch Summary:
Business Description: Global medical technology manufacturer of devices used in interventional procedures across cardiology, endoscopy, neuromodulation, and urology markets. Thesis: Innovative portfolio in high growth categories drives durable double digit organic revenue growth. Disciplined expense management and smart capital deployment lead to mid-teens EPS growth. Strong pipeline across multiple disease categories offers LT optionality. Q2 Results: Revenue +23% (+17% organic) and EPS +21%. Raised FY25 guidance on strength in WATCHMAN (AFib implant device), EP, and endoscopy. What Happened: Shares advanced +4% post-earnings on accelerating momentum in key segments. Leading into 9/30 investor day, shares declined ~10% on growth and competition concerns. Edgewood's View: We believe the selloff was unwarranted and took advantage to continue building our position. Resulting Action: Edgewood added 100bps during the quarter; 9/30 investor day confirmed double digit + organic revenue growth and margin expansion over the next 3 years.

BSD Analysis:
Edgewood maintains strong conviction in Boston Scientific, viewing the company as a leading medical technology manufacturer with an innovative device portfolio spanning high-growth interventional markets including cardiology, endoscopy, neuromodulation, and urology. The fund's investment thesis emphasizes BSX's ability to drive durable double-digit organic revenue growth through its innovative product portfolio, while disciplined expense management and strategic capital deployment support mid-teens EPS growth. Strong Q2 results demonstrated this execution with 23% total revenue growth (17% organic) and 21% EPS growth, driven by strength in key products like WATCHMAN AFib implant devices, electrophysiology, and endoscopy. Management raised full-year guidance reflecting accelerating momentum across key segments. Despite initial post-earnings strength, shares declined approximately 10% leading into the September investor day on concerns about growth sustainability and competitive pressures. Edgewood viewed this weakness as unwarranted and opportunistically increased their position by 100 basis points. The September investor day validated their thesis by confirming double-digit organic revenue growth and margin expansion targets over the next three years, reinforcing the company's long-term growth trajectory.

Pitch Summary:
Business Description: Global leader in robotic-assisted surgical systems, instruments and accessories with its da Vinci and Ion endoluminal platforms. Thesis: ISRG benefits from a large installed base, expanding recurring revenue from instruments, accessories and service, and the growing secular adoption of robotics in surgical applications. Q2 Results: Revenue +21% and EPS +23%. Procedure volumes +17%; raised FY25 GM guidance. Total placements of 395 units missed consensus by one. What Happened: Stock traded down 2% post-earnings and throughout the quarter alongside the broader Healthcare/MedTech market. Edgewood's View: We viewed the broader MedTech selloff as unwarranted. Following diligence in several areas, we felt confident in ISRG's competitive moat and long-term addressable market opportunity. We believe ISRG can compound revenue in the high teens and EPS 20+%. Resulting Action: Edgewood added 100bps to its position in September.

BSD Analysis:
Edgewood maintains a bullish stance on Intuitive Surgical, viewing the company as the global leader in robotic-assisted surgery with significant competitive advantages through its da Vinci and Ion platforms. The fund's investment thesis centers on ISRG's large installed base generating expanding recurring revenue streams from instruments, accessories, and service contracts, combined with the secular trend toward robotic surgery adoption. Strong Q2 results demonstrated the business momentum with 21% revenue growth, 23% EPS growth, and 17% procedure volume increases, while management raised full-year gross margin guidance. Despite solid fundamentals, the stock declined modestly alongside broader MedTech sector weakness, which Edgewood views as an unwarranted market reaction. The manager's confidence in ISRG's competitive moat and long-term addressable market opportunity was reinforced through comprehensive due diligence across multiple areas. Edgewood expects the company to compound revenue in the high teens and EPS at over 20% annually, leading to a 100 basis point position increase in September. The fund views the current valuation as attractive given the company's dominant market position and growth trajectory.

Pitch Summary:
Business Description: Leading provider of semiconductor design automation software and IP, enabling chip design, verification, and secure software development across AI, automotive, and hyperscaler markets. Thesis: Mission-critical supplier to the semiconductor and AI ecosystem, with durable double-digit revenue growth driven by rising chip complexity and AI workloads. FYQ3 Results: Revenue +14% ($1.6B) and EPS of $3.39 missed management's guidance. Backlog increased to $8.1B. Management guided F4Q25 EPS below expectations. What Happened: Stock fell 36% after reporting earnings due to weakness in the Design IP segment, BIS export restrictions disrupting China design activity, and challenges at a foundry customer. Edgewood's View: We believe the selloff was overdone and IP issue is narrower than investors fear. Management has taken steps to address, and we believe the IP segment can return to mid-teens growth in FY27, following a transition year in FY26. Resulting Action: Met with management immediately following earnings disappointment. Clarified ambiguous guidance and added 170bps to our position.

BSD Analysis:
Edgewood maintains conviction in Synopsys despite the significant 36% stock decline following disappointing earnings results. The fund views Synopsys as a mission-critical supplier to the semiconductor and AI ecosystem, with its design automation software and IP solutions becoming increasingly valuable as chip complexity rises with AI workloads. While Q3 results showed 14% revenue growth and an increased backlog to $8.1 billion, earnings missed guidance due to weakness in the Design IP segment, China export restrictions, and foundry customer challenges. Edgewood believes the market overreacted to what they consider a narrower IP segment issue than investors fear. The manager expects the IP segment to return to mid-teens growth in fiscal 2027 following a transition year in 2026, as management has implemented corrective measures. The fund's confidence was reinforced through immediate post-earnings management engagement that clarified ambiguous guidance elements. Edgewood significantly increased their position by 170 basis points, demonstrating strong conviction in the company's long-term prospects despite near-term headwinds.

Pitch Summary:
Business Description: Leading producer (~90% market share) of photolithography machines used in semiconductor manufacturing. ASML's machines enable chips to become smaller and more power efficient every year. Thesis: Secular tailwinds (AI, robotics, cloud, electrification) will continue to drive demand for chips. ASML's EUV & High NA EUV machines continue to be essential equipment and will drive double digit revenue & earnings growth. Q2 Results: Revenue +41% (€7.7B), and EPS +47%. Reiterated FY2025 revenue & EPS guidance. What happened: Stock declined on 2026 revenue growth uncertainty. Edgewood's View: The negative stock reaction had nothing to do with ASML's competitive moat or the size of the market opportunity, rather it was a timing issue related to tariff uncertainty. Over a multi-year period we feel that ASML will compound revenue & earnings at a high teens rate. Resulting Action: Spoke with management. Did additional due diligence on ASML's technology moat. We added 50bps in late July.

BSD Analysis:
Edgewood maintains a bullish outlook on ASML, recognizing the company's near-monopolistic position with approximately 90% market share in advanced photolithography equipment essential for semiconductor manufacturing. The fund's investment thesis is anchored on powerful secular tailwinds including AI, robotics, cloud computing, and electrification that will drive sustained chip demand growth. ASML's EUV and High NA EUV machines represent mission-critical technology that enables the continued miniaturization and power efficiency improvements in semiconductors. Despite strong Q2 results showing 41% revenue growth and 47% EPS growth, the stock declined on concerns about 2026 revenue growth uncertainty. Edgewood views this weakness as a temporary timing issue related to tariff uncertainty rather than any fundamental deterioration in ASML's competitive moat or addressable market opportunity. The manager expects ASML to compound revenue and earnings at high-teens rates over multiple years, supported by the company's technological leadership and the structural growth in semiconductor demand. Following additional management engagement and technology moat analysis, Edgewood added 50 basis points to their position.

Pitch Summary:
Business Description: Leading provider of consumer credit analytics and scoring algorithms that is best known for the "FICO Score"—a three-digit metric used in a variety of consumer credit decisions. Thesis: FICO is the industry standard, used in 90%+ of consumer credit decisions across the US. There is an opportunity to proliferate scores beyond originations and close the Scores' price to value gap, specifically in mortgage and auto. FYQ3 Results: Revenue +20% and EPS +47%. Raised full year EPS. What Happened: Stock declined after FHFA Director Bill Pulte posted on X that government-sponsored enterprises (GSEs) could use an alternate score, creating headline risk around FICO's mortgage score moat and 2026 pricing. Edgewood's View: The market overestimated share-loss and pricing risk; we viewed management as having flexibility in how they wanted to approach Scores monetization and felt confident in the 20%+ multi-year EPS growth algorithm. Resulting Action: Added to the position throughout the quarter (250bps in total), with additions in the post Q3 earnings sell-off after numerous meetings with senior FICO management.

BSD Analysis:
Edgewood maintains strong conviction in Fair Isaac Corporation, viewing the company as the entrenched industry standard in consumer credit scoring with its FICO Score used in over 90% of US credit decisions. The fund's investment thesis focuses on FICO's dominant market position and the significant opportunity to expand score usage beyond loan originations into mortgage and auto sectors, potentially closing the substantial price-to-value gap. Despite regulatory headline risk from FHFA Director comments about alternative scoring models for government-sponsored enterprises, Edgewood believes the market dramatically overestimated both market share loss and pricing pressure risks. The manager emphasizes management's strategic flexibility in monetizing their Scores business and maintains confidence in the company's ability to deliver over 20% multi-year EPS growth. Strong quarterly results showing 20% revenue growth and 47% EPS growth, along with raised full-year guidance, reinforce the fundamental strength of the business model. Edgewood significantly increased their position by 250 basis points throughout the quarter, demonstrating high conviction following extensive management engagement.

Pitch Summary:
Business Description: Global pharmaceutical company with a leading position in diabetes/obesity and a rich pipeline of follow-on medicines addressing several therapeutic categories. Thesis: Lilly is a leader in diabetes and obesity markets which represent large global patient populations and today remain largely underserved. Excellent management team with a long-term focus on deploying capital towards R&D/serial innovation in therapeutic categories with large unmet needs. Q2 Results: Revenue +38% and EPS +61%. Raised FY 2025 revenue and EPS guidance. What Happened: Stock declined on results from P3 ATTAIN-1 trial – orforglipron (Lilly's oral GLP-1 molecule) delivered 12.4% weight loss at the highest dose – expectations were 13-15% weight loss. Edgewood's View: The market was too narrowly focused on one metric from one trial, demographics impacted results and the totality of data from 5 clinical trials would support approval. After a ~15% price decline, Lilly traded at ~20x 2026 EPS for a company that we believe can compound EPS >20% over the next 5 years. Resulting Action: After research meeting with senior management at LLY HQ, Edgewood added 100bps to our position in August.

BSD Analysis:
Edgewood maintains a bullish stance on Eli Lilly, viewing the company as a dominant player in the massive diabetes and obesity markets that remain significantly underserved globally. The fund's thesis centers on Lilly's leadership position in GLP-1 therapies and its robust pipeline addressing multiple therapeutic areas with substantial unmet medical needs. Despite the stock's decline following disappointing weight loss results from the ATTAIN-1 trial for orforglipron (12.4% vs. expected 13-15%), Edgewood believes the market overreacted to a single data point. The manager emphasizes that the totality of data across five clinical trials should still support regulatory approval. At approximately 20x 2026 EPS following the decline, Edgewood sees compelling value for a company they expect to compound earnings at over 20% annually for the next five years. The fund's conviction was reinforced through direct engagement with senior management, leading to a 100 basis point position increase.

BSD Analysis:
EQUAM participated in Rieter's highly dilutive capital increase to fund the acquisition of Barmag, Oerlikon's artificial textile fiber machinery division. The complex transaction involved a capital reduction followed by two tranches of new share issuance at CHF 3.43 and CHF 5.31, raising CHF 477 million total. EQUAM executed an arbitrage strategy by exercising pre-emptive rights in tranche A at CHF 3.43 while simultaneously selling existing shares at CHF 6.52. The combined entity now trades at 3.9x normalized EBITDA with CHF 464 million market capitalization. Post-acquisition leverage stands at 3x current EBITDA and 2.1x normalized EBITDA, including UBS acquisition financing. The manager views this as an attractive valuation for the enlarged textile machinery business. The transaction structure heavily favored participating shareholders while significantly diluting non-participants, demonstrating the importance of active participation in corporate actions.

Pitch Summary:
During the quarter, we began investing in Domino's Pizza, the British company that operates the brand in the United Kingdom and Ireland. Domino's does not manage restaurants directly, as it acts as a master franchisee. Its revenue comes from the sale of raw materials to franchisees and the collection of royalties for the use of the brand, so its asset structure is very light and its operating risk relatively low. Domino's has the largest number of franchised pizzerias in the United Kingdom, a total of 1,378, which, compared to the 381 of its nearest competitors, shows its high market share. It plans to open around 600 new franchises in towns with fewer than 10,000 citizens, where its franchisees achieve higher average sales than restaurants in large cities. It is also considering launching a new brand, drawing on its powerful network of franchisees. We have begun investing in Domino's, taking advantage of the weakness of its share price, which has fallen 43% so far this year. Although employment remains stable and retail sales are steady, consumer confidence in the United Kingdom is very low. The possible tax increase in the Labour government's next budget, which comes on top of previous increases, has led many consumers to reduce their spending. In this context, sales volume has fallen slightly, but Domino's has continued to increase its market share in the pizza delivery segment (+5.6 pp to 53.7% share). First-half results reflected weak consumption, with like-for-like sales falling 0.1% and EBITDA falling 7.4%, much less than the decline in the share price. The company has ex-IFRS16 debt of 2.3x and offers an equity free cash flow yield of 9%.

BSD Analysis:
EQUAM initiated a position in Domino's Pizza Group during Q3, capitalizing on a 43% share price decline driven by weak UK consumer confidence and potential tax increases. The manager views this as an attractive entry point for a dominant franchise operator with 1,378 locations versus 381 for nearest competitors, representing 53.7% market share in pizza delivery. The business model is asset-light, generating revenue through raw material sales to franchisees and royalty collections, which reduces operational risk. Despite challenging conditions, the company maintained market share gains (+5.6pp) while like-for-like sales declined only 0.1% and EBITDA fell 7.4% - significantly less than the share price drop. The expansion strategy targets 600 new franchises in smaller towns where average sales exceed urban locations. With 2.3x debt-to-EBITDA and 9% free cash flow yield, the valuation appears compelling given the temporary nature of consumer weakness.

Pitch Summary:
Within the real estate sector, DLF Ltd. had lacklustre performance for the quarter. As one of the largest residential and commercial real estate developers in India focused on the National Capital Region, DLF performed poorly on the back of an operationally weaker quarter when collections lagged pre-sales and gross margins were weaker than typical. Despite that, pre-sales were strong with a strong outlook given the launch pipeline, and the rental business delivered strong metrics, driving our long-term positive view on the name.

BSD Analysis:
Despite near-term operational challenges, the manager maintains a bullish long-term view on DLF Limited based on strong underlying business fundamentals and positive outlook indicators. The investment thesis acknowledges short-term headwinds including collections lagging pre-sales and weaker-than-typical gross margins during the third quarter, which contributed to the stock's underperformance. However, the manager emphasizes several positive factors that support the long-term investment case: strong pre-sales performance, a robust launch pipeline providing future revenue visibility, and strong metrics from the rental business segment. DLF's position as one of India's largest residential and commercial real estate developers focused on the National Capital Region provides significant market presence and development expertise. The manager's confidence reflects the company's ability to navigate temporary operational challenges while maintaining strong demand for its properties. The rental business strength provides recurring revenue stability and demonstrates DLF's diversified business model beyond pure development activities. The fund views current weakness as temporary, with strong pre-sales and launch pipeline supporting future earnings recovery.

Pitch Summary:
Also contributing to performance in China/Hong Kong was Contemporary Amperex Technology Co. As the world's largest electric vehicle (EV) battery and energy storage system (ESS) producer, Contemporary Amperex outperformed the benchmark in the third quarter, supported by resilient EV battery demand and stronger-than-expected ESS growth in China and abroad. Recent policy support on ESS from Beijing has lifted earnings expectations, whilst global AI infrastructure investment is expected to accelerate ESS deployments in the coming years, reinforcing CATL's leadership and margin outlook.

BSD Analysis:
The manager maintains a bullish position on Contemporary Amperex Technology (CATL) based on the company's dominant market position and multiple growth catalysts across electric vehicle batteries and energy storage systems. The investment thesis centers on CATL's status as the world's largest EV battery and ESS producer, providing significant scale advantages and market leadership. The manager highlights resilient EV battery demand combined with stronger-than-expected growth in energy storage systems both domestically in China and internationally. Recent policy support from Beijing specifically targeting ESS development has enhanced earnings expectations and provided regulatory tailwinds for the sector. The fund sees additional upside from global AI infrastructure investment, which is expected to accelerate ESS deployments as data centers require reliable backup power and grid stabilization. CATL's third-quarter outperformance demonstrates the company's ability to capitalize on both traditional EV growth and emerging AI-driven energy storage demand. The manager's confidence in CATL's leadership position and margin outlook reflects the company's technological advantages and expanding addressable market across multiple high-growth segments.

Pitch Summary:
Alibaba Group, the leading e-commerce company and AI/cloud service provider in China, performed well during the period due to the market's increasing confidence on Alibaba's mid-to long-term earnings growth outlook thanks to Alibaba's streamlined operations and clear strategies to focus on two growth areas (e-commerce/quick commerce and AI/cloud service) in the next decade. We believe Alibaba can deliver a sustainable double-digit earnings growth outlook in the next two to three years on improving China macroeconomics, Alibaba's improving monetisation and an increasing addressable market in the retail space, unlocking the new growth opportunities in the AI era.

BSD Analysis:
The manager presents a compelling bull case for Alibaba Group centered on the company's strategic refocus and positioning for sustainable growth in both traditional e-commerce and emerging AI/cloud services. The investment thesis highlights Alibaba's streamlined operations and clear strategic focus on two key growth verticals: e-commerce/quick commerce and AI/cloud services over the next decade. The manager expects sustainable double-digit earnings growth over the next two to three years, driven by three key factors: improving Chinese macroeconomic conditions, enhanced monetization capabilities, and an expanding addressable market in retail. The fund views Alibaba as well-positioned to capitalize on AI-era opportunities, leveraging its dominant e-commerce platform and growing cloud infrastructure. The manager's confidence reflects Alibaba's market leadership in Chinese e-commerce combined with significant growth potential in cloud and AI services. The position benefits from both cyclical recovery in Chinese consumer spending and structural growth in digital transformation. Alibaba's strong third-quarter performance demonstrates market recognition of the company's strategic repositioning and earnings growth potential.

Pitch Summary:
Within the IT sector, Samsung Electronics was a top contributor. As a leading memory chip and consumer electronics conglomerate, Samsung outperformed the benchmark in the third quarter due to its narrowing technology gap in high bandwidth memory versus peers and stronger-than-expected demand for commodity dynamic random access memory and NAND flash memory. We expect Samsung Electronics to deliver significant margin expansion in the coming quarters, with share prices likely to trend higher as these tailwinds persist.

BSD Analysis:
The manager maintains a bullish stance on Samsung Electronics based on the company's improving competitive position in memory semiconductors and strong demand fundamentals. The investment thesis centers on Samsung's narrowing technology gap in high bandwidth memory (HBM) compared to competitors, positioning the company to capture more market share in this critical AI-enabling technology. The manager highlights stronger-than-expected demand for both commodity DRAM and NAND flash memory, indicating broad-based strength across Samsung's memory portfolio. The fund expects significant margin expansion in coming quarters as these favorable demand and competitive dynamics persist. Samsung's outperformance during the third quarter demonstrates the company's ability to capitalize on the AI-driven memory boom. The manager's confidence in continued share price appreciation reflects expectations that current tailwinds will sustain Samsung's earnings momentum. The position benefits from both cyclical memory demand recovery and structural AI-related memory requirements driving long-term growth.

Pitch Summary:
Taiwan equities also advanced (14.33%), with the positive sentiment on tech stocks driven by growing AI adoption globally and global data centre vendors' comments on stronger capital expenditures (capex) outlook. For example, Oracle has recently revised up its fiscal-year 2026 capex plan by 40% to US$35 billion. OpenAI has signed a contract with Oracle recently to purchase US$300 billion in computing power over the next five years. The AI theme, including AI server infrastructure, AI at the edge and agentic AI, dominate the technology-heavy Taiwan and Korea equity market performance. We have revised up Taiwan gross domestic product growth to ~5% on the back of strong AI-related tech demand and corporate capex expansion. However, we are closely monitoring inventory levels for tech cycle as well as shifts in the political environment affected by US-China negotiations.

BSD Analysis:
The manager presents a bullish thesis on Taiwan Semiconductor Manufacturing driven by the artificial intelligence boom and robust capital expenditure growth from major technology companies. The investment case centers on Taiwan's dominant position in AI-related semiconductor manufacturing, with the manager highlighting Oracle's 40% increase in fiscal 2026 capex to $35 billion and OpenAI's massive $300 billion computing power contract as key demand catalysts. The fund has revised Taiwan's GDP growth expectations upward to approximately 5%, reflecting strong AI-driven technology demand and corporate investment expansion. The manager acknowledges monitoring risks including technology inventory cycles and potential US-China trade tensions that could impact the semiconductor supply chain. Taiwan's market performance of 14.33% in the quarter demonstrates strong momentum in AI infrastructure themes. The position reflects confidence in Taiwan's critical role in global AI infrastructure development. However, the manager maintains cautious oversight of geopolitical and cyclical factors that could affect semiconductor demand patterns.

Pitch Summary:
Shares of enterprise software developer Salesforce traded down after the company provided lower-than-expected forward sales guidance during its most recent earnings release. This prompted concerns about the company's transformation from a software-as-a-service (SaaS) business to an AI-powered enterprise business (its Agentforce platform) and an overall slowdown in revenue growth. We believe that Salesforce is well positioned to grow and scale Agentforce over time, and we continue to like its operational strength, market dominance and focus on balancing growth with improving profitability.

BSD Analysis:
The manager maintains a bullish stance on Salesforce despite guidance disappointment and transformation concerns, focusing on the company's AI platform potential and market leadership. While lower sales guidance has created near-term uncertainty about the transition from traditional SaaS to AI-powered enterprise solutions, the manager views this as a temporary challenge during a strategic transformation. Salesforce's Agentforce platform represents a significant opportunity to capture value from enterprise AI adoption, leveraging the company's existing customer relationships and CRM dominance. The manager emphasizes Salesforce's operational strength and market-leading position in CRM, which provide defensive moats and cross-selling opportunities for new AI products. The company's focus on balancing growth with profitability improvement demonstrates disciplined management and sustainable business practices. Despite revenue growth concerns, the manager appears confident in Salesforce's ability to successfully scale Agentforce and maintain its competitive advantages. The transformation to AI-powered enterprise solutions positions Salesforce for the next phase of enterprise software evolution. The manager views current weakness as a buying opportunity in a fundamentally strong business undergoing strategic evolution.

Pitch Summary:
Comcast is the largest multinational telecommunications and media conglomerate in the US, with brands including Xfinity cable, NBCUniversal (theme parks and TV stations with Peacock streaming service) and UK-based pay-TV company Sky. The company reported better-than-expected results for its most recent quarter, but shares traded lower due to ongoing declines in broadband subscribers. Our investment thesis remains intact, as we believe Comcast has the scale, density and cost advantages to outperform both fixed wireless and other fiber internet providers over the long term. Meanwhile, the other parts of the business have been performing well, and Comcast continues to generate strong cash flows and return capital to shareholders through both dividends and share buybacks.

BSD Analysis:
The manager maintains conviction in Comcast despite broadband subscriber headwinds, emphasizing the company's competitive advantages and diversified business model. While broadband subscriber losses create near-term pressure, the manager believes Comcast's scale, network density, and cost structure provide sustainable competitive advantages over fixed wireless and fiber competitors. The company's diversified portfolio including NBCUniversal's theme parks, television stations, and Peacock streaming service provides multiple revenue streams and reduces dependence on traditional cable. Recent better-than-expected results demonstrate operational resilience across the broader business portfolio. Comcast's strong cash flow generation supports consistent capital returns through dividends and share buybacks, providing direct shareholder value regardless of subscriber trends. The manager appears confident that Comcast's infrastructure investments and scale advantages will enable market share defense and eventual stabilization. The combination of competitive moats, business diversification, and strong cash generation creates a compelling long-term investment case. Despite cord-cutting pressures, the manager views Comcast as well-positioned to adapt and maintain profitability.

Pitch Summary:
Tobacco company Philip Morris reported better-than-expected earnings for its most recent quarter, but slightly soft sales weighed on the stock. The company attributed the sales weakness to supply issues in Indonesia and Turkey due to regulatory changes. However, its noncombustible products continue to lead growth. We remain constructive on this cash flow-generative business and are pleased with Philip Morris's commitment to returning cash to shareholders through reliable dividends and stock repurchases.

BSD Analysis:
The manager maintains a constructive view on Philip Morris despite temporary sales softness, focusing on the company's transformation and cash generation capabilities. The recent sales weakness in Indonesia and Turkey stems from regulatory-driven supply issues rather than fundamental demand problems, suggesting these headwinds are temporary and addressable. Philip Morris's noncombustible products continue to drive growth, reflecting successful execution of the company's transformation strategy away from traditional cigarettes. This product innovation positions the company well for evolving regulatory environments and changing consumer preferences. The manager emphasizes Philip Morris's exceptional cash flow generation, which provides financial flexibility and supports consistent shareholder returns. The company's commitment to reliable dividends and share buybacks demonstrates disciplined capital allocation and management's confidence in the business model. Despite regulatory challenges in specific markets, the overall transformation toward reduced-risk products creates long-term value. The manager appears confident that Philip Morris's diversified geographic presence and product innovation will drive sustained cash flow generation and shareholder returns.