Why Is Platinum Asia Investments Restructuring After a 226% Profit Surge?

Strong Financial Performance Amid Strategic Transition

Platinum Asia Investments Limited (PAI) has delivered a standout financial year ending 30 June 2025, reporting a net profit after tax of $44.7 million, a remarkable 226% increase compared to the prior year. Total revenue and other income also surged by 176% to $66.6 million. This performance was driven by strong investment returns, with the company’s pre-tax net tangible asset (NTA) per share increasing from $1.03 to $1.17 despite dividend payments.

While the company’s 15.8% pre-tax NTA return for the year was solid, it fell short of the MSCI All Country Asia ex Japan Net Index benchmark, which returned 19.0%. The underperformance of 3.2% was primarily attributed to a higher weighting in Chinese equities, which faced headwinds, and a lower exposure to stronger-performing markets such as Taiwan and India.

Scheme of Arrangement and Delisting Approved

In a significant corporate development, PAI shareholders voted in favour of a Scheme of Arrangement on 12 August 2025. This Scheme will see PAI’s ASX-listed shares exchanged for units in the Platinum Asia Fund Complex ETF (ASX, PAXX), with implementation expected on 25 August 2025. Following this, PAI will be delisted from the ASX and is expected to wind up operations.

The strategic review that led to this decision was initiated in April 2024 to address the persistent discount at which PAI’s shares traded relative to its NTA, often between 15-20%. The move to an ETF structure aims to provide shareholders with greater liquidity and the ability to exit at prices closer to net asset value, overcoming limitations inherent in the closed-ended LIC structure.

Special Dividend and Dividend Policy Changes

As part of the transition, the Board declared a special dividend payable on 12 September 2025, reflecting the retained profits at the Scheme Valuation Date of 22 August 2025. This dividend will be partially franked at a 25% tax rate, reflecting the company’s status as a base rate entity. No final dividend will be paid for the 2025 financial year, with only an interim dividend of 0.5 cents per share having been distributed earlier.

Notably, the Dividend Reinvestment Plan (DRP) was suspended on 16 July 2025, signaling a shift in capital management aligned with the Scheme and impending wind-up.

Investment Management and Market Outlook

The company’s portfolio, managed by Cameron Robertson, delivered returns through key holdings such as Taiwan Semiconductor, China Merchants Bank, Tencent, Ping An Insurance, and JD.com. Despite macroeconomic uncertainties including trade policies and inflation, the investment manager emphasized the resilience of select sectors and the importance of active, bottom-up stock picking in dynamic Asian markets.

Looking ahead, the merger between Platinum Asset Management Limited (PAI’s ultimate parent) and L1 Capital, scheduled for a shareholder vote in September 2025, may further influence the investment landscape and management structure.

Governance and Final Remarks

The Board maintained rigorous oversight throughout the year, with no material compliance issues reported. Directors’ remuneration remained steady, with no performance fees accrued due to the portfolio’s underperformance relative to the benchmark. The company’s auditor, PricewaterhouseCoopers, issued an unqualified opinion while highlighting the financial statements’ preparation on a liquidation basis in light of the Scheme.

As PAI prepares to transition into the ETF structure and exit the ASX, shareholders face a pivotal moment that balances strong historical returns with structural change designed to enhance liquidity and shareholder value.