Page 2 - SMA changes rationale. Specialist Income Assertive

connecting 1.4 million Australian homes, with a $22 billion portfolio of assets delivering half of
Australia’s natural gas. APA also owns interests in gas storage facilities, gas-fired power stations, wind
farms and solar farms. The company is exposed mainly to gas volumes but does have some sensitivity
to gas prices.

Our view:
- Hard to replicate asset base which provides a strong platform for excess returns.
- Relatively defensive earnings stream is attractive in a weakening economic environment.
- The stock is a primary beneficiary of the transition away from coal given gas will be part of our
energy grid for at least the next 50 years.
- Valuation is currently below our fair value estimate and approximately 20% below its long-
term average.
- The dividend yield is well above market and expected to continue to grow.
- Limited regulation in the gas transmission market provides the opportunity for stronger
returns relative to other regulated infrastructure operators.

APA has recently announced their intention to acquire 100% of the Alinta Energy Pilbara for $1.72
billion – a very similar energy infrastructure business which appears to be further developed in its
plans for renewable energy storage and transmission. This should provide APA with additional
renewable energy knowledge and resources and is expected to be free cash flow accretive in the first
full financial year of ownership.

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PSK Financial Services Group Pty Ltd (ABN 24 134 987 205) trading as PSK Private Wealth and Employee Representatives of PSK Advisory Services Pty Ltd trading as PSK Private Wealth are all representatives of AFS licensee, PSK
Advisory Services Pty Ltd (ABN 30 008 587 595) AFSL #234656. This document contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to
consider your financial situation and needs before making any decisions based on this information.