BHP Group Ltd (ASX: BHP) shares rose again on Monday on a report out of China.

The country’s largest steelmaker is considering buying into one of the BHP’s biggest iron ore mines.

What does this mean for BHP?

Well, this piece of news points to a change in how Australia’s biggest miner and its biggest customer deal with each other.

What China’s Baowu is proposing

China Baowu Steel Group is reportedly weighing a minority stake in BHP’s Jimblebar operation in the Pilbara.

The range under discussion is 15% to 25%.

The stake would come out of BHP’s own 85% holding, with Itochu and Mitsui owning the remaining 15%.

Jimblebar is not a peripheral asset.

The operation produced roughly 62.5 million tonnes in FY26, close to a quarter of BHP’s total iron ore output.

BHP responded to the reports without confirming anything.

BHP notes the recent media speculation regarding a potential partnership involving part of the Western Australia Iron Ore (WAIO) business. BHP has a long history of partnerships at its assets and regularly explores options that may create long-term value to its shareholders.

Why this matters more than the price move for BHP shares

Context is everything here.

Until April, China Mineral Resources Group was restricting purchases of BHP’s US dollar-denominated cargoes.

That pricing dispute ran for roughly seven months.

CMRG negotiates contracts covering more than half of China’s iron ore imports.

It was resolved shortly after Brandon Craig met leaders of both CMRG and Baowu in Beijing.

Craig became BHP’s chief executive on 1 July.

A customer that owns part of the mine has a very different set of incentives in the next pricing negotiation.

That is the real significance for BHP shares.

The precedent at Rio Tinto

This would not be the first time Baowu has bought into the Pilbara.

Rio Tinto Ltd (ASX: RIO) opened the Western Range mine with Baowu in June 2025.

The US$2 billion joint venture is owned 54/46 and can produce up to 25 million tonnes a year.

The model already exists and it already works.

The contrast between the two miners is important to highlight.

BHP settled with CMRG in April.

Rio Tinto has not, and in August CMRG reportedly instructed some Chinese mills to halt negotiations with the company over shipments from September.

Rio Tinto delivered a strong first half regardless, with underlying EBITDA up 28% to US$14.8 billion and the interim dividend up 43%.

What it means for BHP shares from here

The underlying business is in good shape.

FY26 revenue rose 15% to US$58.8 billion, underlying EBITDA rose 27% to US$32.9 billion, and underlying attributable profit rose 30% to US$13.2 billion.

Net debt fell to US$8.7 billion and the full-year dividend was 172 US cents fully franked.

Iron ore production reached 265 million tonnes at a unit cost of US$19.66 a tonne.

That is the lowest among the majors for a seventh straight year.

The obstacles are somewhat political.

The Federal Opposition has already objected to a Chinese stake in a major Western Australian iron ore mine, and foreign investment approvals in resources have tightened considerably.

No decision has been made and there is no certainty any transaction follows.

Foolish takeaway

BHP shares are up roughly 50% over twelve months and about 10% below the record high set on 26 August.

The broker consensus target of around $59 sits below the current price.

A lot of optimism is already priced in.

I would not buy on the Baowu headline alone, because it is speculation and it faces a potential political challenge.

What it does signal is that BHP has repaired the most important commercial relationship it has.

The post Why this news from China has changed the outlook for BHP shares appeared first on The Motley Fool Australia.

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• This ASX 200 giant is up 37% in 2026. Is the pullback worth buying?

Motley Fool contributor Mark Verhoeven has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investors looking for ideas over the next few months have a new list to work through.

UBS has released its latest “Top Picks” list, naming 10 ASX shares its analysts see as the most compelling opportunities over the next 3 to 6 months.

The list is selected from a wider pool of 30 stocks and is updated each month.

So, which ASX shares made the cut this time?

Resources and industrials are in hot demand

UBS says the August reporting season reinforced what it describes as a “capex over consumer” cycle.

The broker sees stronger conditions in areas benefiting from spending on data centres, mining, energy and defence, while consumer-facing parts of the market look less attractive.

Several of the stocks on the list fit that view.

They include Genesis Minerals Ltd (ASX: GMD), which finished Monday at $8.17, Mineral Resources Ltd (ASX: MIN) at $63.06, Orica Ltd (ASX: ORI) at $22.95 and Ventia Services Group Ltd (ASX: VNT) at $5.73.

UBS is currently overweight both the mining and industrial sectors.

Megaport Ltd (ASX: MP1) also makes the cut. The data centre connectivity company closed Monday at $17.13 after a strong run this year, up 45%.

The full UBS top 10

The rest of the list is a pretty much a mixed bunch.

Auckland International Airport Ltd (ASX: AIA) finished Monday at $6.99, while AMP Ltd (ASX: AMP) closed at $2.48.

Healthcare heavyweight CSL Ltd (ASX: CSL) ended the session at $173.18, while gaming company Light & Wonder Inc (ASX: LNW) finished at $125.30.

Sigma Healthcare Ltd (ASX: SIG) rounds out the list after closing Monday at $2.69.

That gives UBS a mix of mining, infrastructure, technology, healthcare, financial and consumer-related exposure.

It’s also worth remembering these are short-term picks, not necessarily the stocks UBS likes best over the next 5 or 10 years.

The list can change quickly as share prices and earnings expectations move on the daily.

What is UBS avoiding?

Just as interesting is where UBS is more cautious.

The broker isn’t keen on banks, consumer discretionary shares and real estate, with higher RBA interest rates and weaker sentiment making life tougher across those parts of the market.

UBS thinks that could lead to more earnings-per-share (EPS) downgrades in the months ahead.

That leaves the broker leaning more heavily towards companies exposed to business investment and infrastructure spending.

Of course, these are only 3-to-6-month picks, and UBS refreshes the list every month.

I’d be interested to see which of these 10 are still there next time around.

The post UBS names its 10 top ASX picks for the next 3-6 months appeared first on The Motley Fool Australia.

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• Buy, hold, sell: Megaport, Xero, AMP shares

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Light & Wonder Inc, and Megaport. The Motley Fool Australia has recommended CSL and Light & Wonder Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are plenty of interesting investment opportunities available on the ASX share market right now.

The experts in charge of WAM Capital Ltd (ASX: WAM) have outlined some compelling opportunities in its portfolio that have pleasing outlooks.

WAM Capital is a listed investment company (LIC) – a company that invests in other shares to generate profits for shareholders. Which ASX shares? The LIC wants to find the “most compelling undervalued growth opportunities in the Australian market”.

Let’s dive into the two stocks that Wilson Asset Management highlighted as ideas in its August 2026 update.

EVT Ltd (ASX: EVT)

The first ASX share that WAM discussed was EVT, an Australian leisure and property company that operates cinemas, hotels and commercial properties. Its cinema chains are reportedly the largest in Australia and New Zealand.

The fund manager noted that the EVT share price rose in August following the release of its FY26 annual result. It shot up 18% during last month.

Wilson Asset Management highlighted that the ASX share’s reported net profit after tax (NPAT) rose 51.9% year-over-year to $50.7 million. The company’s board of directors declared a fully franked final dividend of 23 cents per share, representing a year-over-year rise of 4.5%.

WAM said that the FY26 result was ahead of the consensus of analysts’ expectations, driven by the cinema segment.

The fund manager also noted the business plans to divest approximately $800 million of non-core property assets, as well as an independent strategic review of the group structure.

WAM said the proposed asset divestments are expected to support hotel growth and potential special dividends, while the strategic review is a potential catalyst to unlock further shareholder value.

FDC Consolidated Holdings Ltd (ASX: FDC)

The other ASX share that Wilson Asset Management wanted to highlight was FDC, an integrated construction and building services company that delivers major construction, fit-out and refurbishment solutions across Australia.

The FDC share price also increased by 19% in August 2026. This positive performance was in response to the company’s first annual result as an ASX-listed company.

FDC reported that revenue grew by 13% year-over-year, which reflected the strength of its diversified business model and national footprint, according to WAM. There was double-digit growth across its construction, fit-out and refurbishment segments.

WAM then pointed out that FDC also reaffirmed its FY27 prospectus forecasts and highlighted a diversified project pipeline, which supported confidence in the ASX share’s future earnings growth.

The post Why a fund manager loves these ASX shares right now appeared first on The Motley Fool Australia.

More reading

• 40 ASX shares with ex-dividend dates next week
• Ouch: WAM Capital shares crash 15% as dividend cut in half
• WAM Capital trims FY27 dividend after portfolio setback in FY26
• Here are the top 10 ASX 200 shares today
• EVT Ltd posts profit jump and pivots focus to hotel growth in FY26 results

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.