New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

Fisher & Paykel Healthcare Corp / Equity Bottom-Up

Fisher & Paykel Healthcare Corporation Limited designs, manufactures and markets heated humidification products and systems for use in respiratory care and the treatment of sleep apnea.  The Company also offers patient warming and neonatal care products, including warming products and infant resuscitators.

<ul><li>We upgrade our rating on F&amp;P Healthcare (FPH) to NEUTRAL from UNDERPERFORM.</li><li>Our analysis suggests a large long-term opportunity in the anaesthesia market.</li><li>This reflects: (1) strong industry feedback, (2) large market size, and (3) current use case/body of clinical research, underpinning a solid market penetration ability (which we expect to grow through time). </li></ul>

We upgrade our rating on F&amp;P Healthcare (FPH) to NEUTRAL from UNDERPERFORM.Our analysis suggests a large long-term opportunity in the anaesthesia market.This reflects: (1) strong industry feedback, (2) large market size, and (3) current use case/body of clinical research, underpinning a solid market penetration ability (which we expect to grow through time). 

F&P Healthcare - The Next Big Thing; Upgrade to NEUTRAL

Air New Zealand Limited operates an airline business that provides international and domestic air passenger and cargo transport services throughout New Zealand and the South West Pacific. The Company also provides engineering and ground handling services.

<ul><li>Air New Zealand (AIR) has downgraded earnings for the fourth time in FY24, due to weaker domestic demand and the impact of elevated competition on North American services. </li><li>On an underlying basis the company now expects profit before tax to be broadly breakeven through 2H24.</li><li>The trading backdrop has deteriorated further, with no support from fuel prices. </li></ul>

Air New Zealand (AIR) has downgraded earnings for the fourth time in FY24, due to weaker domestic demand and the impact of elevated competition on North American services. On an underlying basis the company now expects profit before tax to be broadly breakeven through 2H24.The trading backdrop has deteriorated further, with no support from fuel prices. 

Air New Zealand  - Second Half Loss of Altitude

Genesis Energy Ltd. generates, transports, and retails electricity. The Company owns and operates hydroelectric generating stations to produce electricity, as well as explores natural gas and bottled liquefied petroleum gas.

<ul><li>Genesis Energy (GNE) has reported mixed 3Q24 operating statistics, with retail performing well, wholesale okay, but Kupe troubles continue.</li><li>Retail volume and price growth continue to be positive, particularly in electricity.</li><li>The Kupe KS-9 well drilled in 2Q24 has not lifted production as expected, with final well commissioning pushed back a further month to the end of May. </li></ul>

Genesis Energy (GNE) has reported mixed 3Q24 operating statistics, with retail performing well, wholesale okay, but Kupe troubles continue.Retail volume and price growth continue to be positive, particularly in electricity.The Kupe KS-9 well drilled in 2Q24 has not lifted production as expected, with final well commissioning pushed back a further month to the end of May. 

Steel & Tube Holdings Limited produces and distributes steel throughout New Zealand and its products include steel fasteners, nuts, bolts and screws.  The Company's other activities include steel reinforcing.

<ul><li>We have reviewed our Steel and Tube (STU) earnings forecasts after the recent softer tone to a number of business surveys and our own channel checks that have highlighted stable but not yet improving NZ activity after some green shoots over the first few months of the year.</li><li>While this has resulted in cuts to our near-term estimates, we still expect a pick-up in activity over FY25.</li><li>STU is well positioned for both a continuation of soft activity as well as any rebound in demand, with cost out initiatives progressing well, inventory now largely normalised, and net cash on its balance sheet. </li></ul>

We have reviewed our Steel and Tube (STU) earnings forecasts after the recent softer tone to a number of business surveys and our own channel checks that have highlighted stable but not yet improving NZ activity after some green shoots over the first few months of the year.While this has resulted in cuts to our near-term estimates, we still expect a pick-up in activity over FY25.STU is well positioned for both a continuation of soft activity as well as any rebound in demand, with cost out initiatives progressing well, inventory now largely normalised, and net cash on its balance sheet. 

Steel & Tube Holdings - Recasting Our Estimates

Channel Infrastructure NZ Ltd / Equity Bottom-Up

Channel Infrastructure NZ Limited operates a fuel infrastructure company. The Company owns and operates a petroleum pipeline from the refinery to a terminal at Marsden Point, in Northland. Channel Infrastructure produces motor gasoline, automotive and diesel fuels, aviation jet fuel, light and heavy fuel oils, and bitumen.

<ul><li>Channel Infrastructure's (CHI) 1Q24 throughput volumes continue to show strong (+14%) increases, driven by rising jet volumes (+38%).</li><li>We expect the positive throughput growth trend to continue, with jet volumes the source of that growth, albeit the growth rate will ease.</li><li>We continue to see CHI's risks skewed to the upside, with additional fuel storage being required by Government and/or customers the most likely near-term upside. OUTPERFORM.</li></ul>

Channel Infrastructure's (CHI) 1Q24 throughput volumes continue to show strong (+14%) increases, driven by rising jet volumes (+38%).We expect the positive throughput growth trend to continue, with jet volumes the source of that growth, albeit the growth rate will ease.We continue to see CHI's risks skewed to the upside, with additional fuel storage being required by Government and/or customers the most likely near-term upside. OUTPERFORM.

Channel Infrastructure - P's and Q's Still Supportive — 1Q24 Op Stats

Forsyth Barr
New Zealand Professional Investment Services Firm

F&P Healthcare - The Next Big Thing; Upgrade to NEUTRAL

We upgrade our rating on F&P Healthcare (FPH) to NEUTRAL from UNDERPERFORM. Our analysis suggests a large long-term opportunity in the anaesthesia...

Forsyth Barr

Air New Zealand - Second Half Loss of Altitude

Air New Zealand (AIR) has downgraded earnings for the fourth time in FY24, due to weaker domestic demand and the impact of elevated competition on...

Forsyth Barr

Genesis Energy - Retail Performing Well

Genesis Energy (GNE) has reported mixed 3Q24 operating statistics, with retail performing well, wholesale okay, but Kupe troubles continue.

Forsyth Barr

Steel & Tube Holdings - Recasting Our Estimates

On our revised estimates, STU trades on a 10.5x one year forward PE, which is in-line with its long-run average. NEUTRAL.

Forsyth Barr

Channel Infrastructure - P's and Q's Still Supportive — 1Q24 Op Stats

Channel Infrastructure's (CHI) 1Q24 throughput volumes continue to show strong (+14%) increases, driven by rising jet volumes (+38%).

Forsyth Barr