Australian Stock Investment Guide | Confirmed Opportunities in the Southern Hemisphere Are Emerging

Australia has long been regarded as a retirement destination, but few have seriously considered this resource-rich country from an investment perspective. In fact, for Taiwanese investors, Australia is not only a popular choice for studying abroad and immigration but also a seriously underestimated investment destination.

Why is the Australian stock market worth paying attention to now?

When it comes to global investment patterns, most people’s focus is on the US stock market and the tech sector. But this creates opportunities in the Australian stock market—especially as geopolitical risks in the Northern Hemisphere continue to rise, prompting global capital to seek safer assets as a haven.

The ASX200 rose 12.95% throughout 2024. This seemingly modest performance conceals profound structural changes. While lithium mines plummeted 30% due to overcapacity, copper stocks doubled against the trend—reflecting a broader shift in the resource sector.

The appeal of the Australian stock market lies in three levels: Since 1991, excluding the COVID-19 pandemic in 2020, the Australian market has maintained positive growth for 33 consecutive years, with an average annual return of 11.8%. Second, Australia has a tax treaty advantage with Taiwan, with dividends taxed at only 10-15%, far lower than the 30% in the US. Lastly, as the most stable economy in the Southern Hemisphere, Australian stocks offer an average dividend yield of over 4%.

The three major investment logic points for Australian stocks in 2025

Policy shift: from slogans to real money

The Australian Federal Treasurer announced that starting in 2025, hydrogen export companies will receive a subsidy of 2 AUD per kilogram, and legislation will require the phase-out of all coal-fired power plants by 2030. This is not just symbolic policy but a strategic move aligned with the EU’s carbon border adjustment mechanism—aiming for Australia to capture 15% of the global hydrogen export market.

Meanwhile, in 2025, the EU will begin imposing carbon tariffs, forcing traditional Australian resource giants to accelerate green transformation. BHP plans to invest 3 billion AUD in carbon capture projects, targeting a 30% reduction in emissions by 2030. This means technologically advanced mining companies will enjoy premium valuations, while laggards face valuation pressures.

Technological demand: copper is more scarce than lithium

The global frenzy to build AI data centers requires massive amounts of copper wiring for power and cooling. Coupled with the explosive growth of electric vehicles, the copper supply gap in 2025 could be more severe than that of lithium.

The lithium market has taught Australian miners a lesson—rather than competing on price with Asian rivals, it’s better to lock in long-term contracts with major clients like Tesla. This strategic shift is reshaping the valuation logic of Australian mining stocks.

Geopolitical game: resource security becomes a core asset

As US-China competition intensifies, Australia’s strategic position is highlighted—its advantage of holding the world’s second-largest rare earth reserves is being revalued. The US is investing heavily in Australian miners to reduce dependence on Chinese rare earths. Meanwhile, Indonesia and Vietnam are also vying for market share with cheap rare earths, so Australia must rely on technological refining advantages to maintain high-value zones.

Therefore, the core logic of investing in Australian stocks is to follow the threads of “who the government is funding,” “what technologies are being used globally,” and “which resources major powers are competing for”—these three clues.

Australian stocks to watch in 2025

FMG Fortescue (FFI Vision: The Saudi Arabia of Hydrogen)

FMG’s iron ore mining accounts for 80% of revenue, but its subsidiary FFI is actively developing the hydrogen industry, aiming for an annual green hydrogen production of 15 million tons by 2030.

The company’s unique advantage is using profits from iron ore mining to fund hydrogen energy—if it loses money, it has the backing; if it succeeds, it becomes a “new benchmark for energy transition.” Relying on low-cost hydrogen production technology and policy subsidies, FMG is poised for exponential growth in the energy transition. Suitable for aggressive investors willing to tolerate short-term volatility.

BHP Billiton (Dual benefits of high dividends + rising copper prices)

In 2024, BHP’s iron ore business contributed 65% of profits, with strong cash flow and an average dividend yield of 5.8% over the past five years. More importantly, BHP controls the world’s largest copper mine, Escondida, which will expand capacity to 1.4 million tons by 2025, perfectly positioning it to meet the global copper shortage.

Signing a 10-year copper supply agreement with Tesla means the company’s profits are directly linked to EV industry growth. The high-margin period, with Queensland coking coal costs at only 80 AUD/ton and spot prices at 320 AUD/ton, is expected to continue at least until 2026.

Unless there is a major global economic downturn or a collapse in mineral prices, BHP is a stable stock with limited downside, significant upside potential, and high dividends. Advanced investors may consider hedging with iron ore futures short positions.

RIO Tinto (Light-asset high-yield choice)

Compared to BHP, RIO has a lighter asset structure and lower debt ratio, resulting in less cash flow pressure in a high-interest-rate environment. The company’s dividend yield is about 6%, higher than BHP’s, making it a better choice for income-focused investors.

However, smaller scale means higher unit costs; if demand for minerals exceeds expectations, RIO’s growth will lag behind BHP.

CBA Commonwealth Bank of Australia (The anchor of the financial sector)

Known as the “most stable bet” in Australia’s financial sector. As the environment of high interest rates recedes, if the RBA starts cutting rates, pressure on CBA’s mortgage business will ease, with current bad debt rates at a manageable 0.4%.

With an average dividend yield of 5.2% over the past five years—much higher than the Big Four’s 4.5%—CBA has achieved dividend growth for 28 consecutive years. Whether the global economy improves or risk aversion increases, CBA’s business has growth momentum—this is the true meaning of “both offense and defense.” Long-term investors may consider locking in dividends at current prices, while short-term traders can buy when the stock price hits the lower Bollinger Band.

SFR Sandfire Resources (Leverage tool for copper price increases)

Known as the “cost killer” in copper mining. Its Motheo mine in Mozambique has a copper grade of 6%, far above the global average of 0.8%, with production costs of only 1.5 AUD/pound, lower than peers at 2.8 AUD/pound—cost advantage crushing competitors.

Expected to expand capacity to 200,000 tons in 2025, with a five-year supply agreement with Tesla to sell 50% of capacity at LME copper prices plus a 10% premium. Facing future copper shortages, prices are projected to rise to 12,000 AUD/ton. SFR is the purest play betting on copper price increases.

CSL Limited (Direct beneficiary of aging population dividends)

Over 5 million Australians aged 65 and above, with government Medicare budgets rising annually. CSL’s core logic is—companies that help reduce government healthcare costs, and thus get orders passively.

It controls 45% of global plasma collection centers, with purification technology costs 20% lower than competitors; holds 30% market share in flu vaccines, performing even better during severe winter epidemics; and its rare disease drugs sell for over $100,000 per dose, with government insurance covering the costs.

In 2024, market funds flooded into AI, leaving healthcare stocks relatively neglected, but in 2025, these profitable healthcare companies could see a rally. The aging trend and chronic disease prevalence are unlikely to reverse, making CSL’s growth prospects clear.

WES Western Group (A safe haven in retail)

Australia’s largest retailer, valued far below AI tech stocks, with less bubble risk. As consumer demand recovers, retail performance has inherent growth momentum. The company is currently in an upward trend; long-term investors can buy regularly, while swing traders may enter when the stock hits the lower Bollinger Band.

ZIP Zip Co Limited (Beneficiary of the end of the rate hike cycle)

A Buy Now Pay Later company, severely impacted over the past two years by rising interest rates—its customer base mainly consists of financially vulnerable groups, with high default risks. ZIP’s stock price fell from 14 AUD to 0.25 AUD, multiple times halved.

As the rate hike cycle ends, bad debts decrease and customer numbers increase, with the stock rebounding to 3.1 AUD. With rate cuts accelerating in 2025, bad debts are expected to further decline, making it worth watching.

GMG Goodman Group (The invisible king of infrastructure)

Australia’s largest property developer and REIT, mainly investing in warehouses, logistics centers, and office commercial real estate. It owns 65% of top-tier logistics warehouses in Australia, with giants like Amazon and Coles signing long-term leases, averaging at least 8 years, with a 98% occupancy rate.

12 consecutive years of dividend growth, with stable net profit margins exceeding peers. As inflation eases and the economy recovers, rising rents and property prices will directly boost the company’s net worth. Entering a rate-cutting cycle reduces capital costs, benefiting real estate growth. However, investors should be cautious of potential impacts from a global recession on occupancy rates.

The three main advantages of investing in Australian stocks

Stability advantage: Since 1991, continuous positive growth (except 2020 pandemic), with an average annual return of 11.8% and an average dividend yield of 4%, making it a natural long-term investment target.

Safety advantage: As geopolitical risks increase globally, Australia—one of the most politically and economically stable countries—attracts more safe capital inflows compared to US stocks, Taiwan stocks, Hong Kong stocks, and Japanese stocks.

Tax advantage: According to Article 10 of the DTA between Australia and Taiwan, dividend tax is only 10-15%, far lower than the 30% in US stocks, reducing investment costs naturally.

Conclusion: Seeking excess returns amid volatility

Australian stocks have faded from view over the past decade due to advances in mineral technology and the depreciation of the Australian dollar, but post-pandemic global emphasis on environmental protection and rising geopolitical risks in the Northern Hemisphere are rekindling their investment value.

In 2025, the federal election will reshape energy subsidy policies, AI computing power will redefine mining valuations, and the retreat of high interest rates will trigger a new wave of asset rotation. The charm of Australian stocks lies not in hedging but in excess returns amid volatility. Instead of trying to predict the trend, it’s better to develop your own investment strategy—this is true investment wisdom.