Regal Asian Investments delivered a 3.2% net portfolio return in August, lifting its 12-month performance to 36.4% despite continued volatility across Asian equities. The listed investment company’s shares ended the month at a 14.3% discount to post-tax NTA, while its buy-back and fully franked dividend continued.
- 3.2% net portfolio return in August
- 36.4% net return over 12 months
- $3.03 post-tax NTA versus $2.60 share price
- 0.3 million shares repurchased at $2.67 average
- 10.0 cent fully franked dividend payable on 25 September
August Return Reverses Part of July Decline
Regal Asian Investments Limited (ASX:RG8) posted a 3.2% net portfolio return in August, recovering some ground after the portfolio fell 8.3% in July. The gain took RG8’s net portfolio return for the 12 months to 31 August to 36.4%, while its 2026 year-to-date return stood at 7.9%.
The monthly report described Asian equities as recovering from July’s sharp rotations, although volatility remained elevated. Korea, Taiwan and Japan finished higher, while Chinese equities were broadly flat. Performance remained widely dispersed across sectors and individual stocks, a setting in which RG8 said stock selection was increasingly important.
Industrial and Technology Holdings Drive Gains
South Korean holdings Hanwha Aerospace, Hyosung Heavy Industries and HD Hyundai Electric were among the main contributors. Hanwha Aerospace rebounded after its July sell-off following strong second-quarter earnings, with the company’s order pipeline supporting the potential for further contract wins, according to RG8. The two electrical equipment companies benefited from robust earnings and orders as investment in power infrastructure responds to demand linked to artificial intelligence and data centres.
Japanese and Chinese banks also added to performance. Japanese lenders continued to benefit from higher domestic interest rates, while China’s large banks remained resilient despite a soft economy, with earnings improving and margin pressure stabilising. The gains were partly offset by Tencent and Alibaba, where heavy AI investment is increasing near-term spending. Tencent’s gaming and advertising businesses remained strong, while Alibaba’s cloud operations accelerated even as commerce profitability stayed subdued.
Discount to NTA Remains a Central Shareholder Issue
RG8 ended August with post-tax net tangible assets of $3.03 per share, compared with a month-end share price of $2.60. That represented a 14.3% discount to NTA. The NTA figure is unaudited, and a separate calculation including deferred tax liabilities and assets on unrealised gains and losses put NTA at $2.99 per share.
The company bought back approximately 0.3 million shares during August at an average price of $2.67. It also confirmed that the 10.0 cent fully franked dividend announced with its FY26 results had an ex-date of 24 August and is payable on 25 September. Based on the month-end share price, RG8 reported a last-12-month dividend yield of 6.9% before franking.
Leveraged Long Short Portfolio Keeps Risk High
The portfolio held 140% of NTA in long positions and 41% in shorts at month-end, producing gross exposure of 180% and net exposure of 99%. Financials, materials, information technology and industrials were the largest sector exposures on a gross basis. Materials contributed 30% of net exposure, information technology 29%, financials 24% and industrials 23%, while consumer discretionary and healthcare were negative on a net basis.
The report’s recent detractors included Japanese construction companies Kajima and Taisei. RG8 said underlying construction demand and profitability remained solid, but higher labour and construction costs posed a risk to margins. For shareholders, the combination of a strong trailing return, elevated portfolio exposure and a persistent NTA discount leaves the next monthly result important: it will show whether August marked a durable recovery from July or merely another turn in a volatile sequence.
Bottom Line?
RG8 enters the next reporting month with strong trailing performance, but the 14.3% NTA discount and high gross exposure keep valuation and volatility firmly in focus.
Questions in the middle?
- Can RG8 sustain its recovery after the sharp July decline?
- Will the share buy-back narrow the discount to NTA over time?
- How much will AI-related spending and construction-cost pressure affect portfolio contributors?