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

<ul><li>Chorus (CNU) reported an encouraging 3Q26 connections update, marginally ahead of our forecasts with the largest sequential increase in its total quarterly fibre zone connections since 2Q18.</li><li>CNU has also brought forward its retirement date for the remainder of its copper network from 2030 to 2028.</li><li>This gives us greater confidence CNU will not have to rely on even larger price increases to earn its MAR, which would be a more precarious growth strategy.</li></ul>

Chorus (CNU) reported an encouraging 3Q26 connections update, marginally ahead of our forecasts with the largest sequential increase in its total quarterly fibre zone connections since 2Q18.CNU has also brought forward its retirement date for the remainder of its copper network from 2030 to 2028.This gives us greater confidence CNU will not have to rely on even larger price increases to earn its MAR, which would be a more precarious growth strategy.

<ul><li>Chorus (CNU) has had the upper hand in the urban broadband market over the last two years, with fibre gaining share from fixed wireless (FW).</li><li>This is likely to moderate as Spark NZ (SPK) and other mobile network operators (MNOs) push 5G FW.</li><li>We expect urban FW connections to return to growth, but with most new 5G connections converting from 4G, this will not transform the broadband market as 4G FW did.</li></ul>

Chorus (CNU) has had the upper hand in the urban broadband market over the last two years, with fibre gaining share from fixed wireless (FW).This is likely to moderate as Spark NZ (SPK) and other mobile network operators (MNOs) push 5G FW.We expect urban FW connections to return to growth, but with most new 5G connections converting from 4G, this will not transform the broadband market as 4G FW did.

Telecommunications Sector Can Fixed Wireless Fight Back?

<ul><li>Chorus (CNU) reported a solid 1H26 result, slightly ahead of our expectations, and increased FY26 EBITDA guidance to the upper half of its prior range.</li><li>CNU continues to deliver steady defensive earnings despite competitive threats from satellite broadband and fixed wireless; we view the latter as now likely at its peak connection share in NZ.</li><li>To be more constructive on CNU, we need greater confidence in its non-regulated growth options.</li></ul>

Chorus (CNU) reported a solid 1H26 result, slightly ahead of our expectations, and increased FY26 EBITDA guidance to the upper half of its prior range.CNU continues to deliver steady defensive earnings despite competitive threats from satellite broadband and fixed wireless; we view the latter as now likely at its peak connection share in NZ.To be more constructive on CNU, we need greater confidence in its non-regulated growth options.

Chorus 1H26 Result: Speeding Ahead of Fixed Wireless

<ul><li>Chorus (CNU) reported an in-line 2Q26 connection update, with fibre connections growing +7k versus 1Q26, partially offsetting the -15k decline in copper connections.</li><li>We are looking for this trading down to slow over 2026 to ensure CNU can earn its maximum allowable revenue (MAR) over the medium term.</li><li>Additionally, during 2Q26 S&amp;P changed its credit rating criteria for CNU, giving it meaningfully more debt headroom within its current credit rating.</li></ul>

Chorus (CNU) reported an in-line 2Q26 connection update, with fibre connections growing +7k versus 1Q26, partially offsetting the -15k decline in copper connections.We are looking for this trading down to slow over 2026 to ensure CNU can earn its maximum allowable revenue (MAR) over the medium term.Additionally, during 2Q26 S&amp;P changed its credit rating criteria for CNU, giving it meaningfully more debt headroom within its current credit rating.

Chorus 2Q26—Downloading Lower Priced Plans

Thematic (Sector/Industry)

<ul><li>The Commerce Commission (ComCom) has just released its annual Telecommunications Monitoring report for the year ended June 2025.</li><li>The growth of MVNOs is also clear, they now have &gt;3% mobile connection market share with ARPUs ~-15% below the weighted average of mobile network operators (MNO).</li><li>Mobile churn is elevated, consistent with market share moving between operators.</li></ul>

The Commerce Commission (ComCom) has just released its annual Telecommunications Monitoring report for the year ended June 2025.The growth of MVNOs is also clear, they now have &gt;3% mobile connection market share with ARPUs ~-15% below the weighted average of mobile network operators (MNO).Mobile churn is elevated, consistent with market share moving between operators.

Telco Sector: ComCom Annual Telecommunications Report

Australia

Chorus Limited is a wholesale and retail telecommunications company. The Company maintains and build the Chorus local access network which is made up of local telephone exchanges, cabinets and copper and fiber cables that connects New Zealand homes and businesses throughout the country.

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Chorus (CNU AU)

Chorus Fibre Running Faster In 3Q26

Chorus (CNU) reported an encouraging 3Q26 connections update, marginally ahead of our forecasts with the largest sequential increase in its total...

Forsyth Barr

Telecommunications Sector Can Fixed Wireless Fight Back?

Chorus (CNU) has had the upper hand in the urban broadband market over the last two years, with fibre gaining share from fixed wireless (FW). This...

Forsyth Barr

Chorus 1H26 Result: Speeding Ahead of Fixed Wireless

Chorus (CNU) reported a solid 1H26 result, slightly ahead of our expectations, and increased FY26 EBITDA guidance to the upper half of its prior...

Forsyth Barr

Chorus 2Q26—Downloading Lower Priced Plans

Chorus (CNU) reported an in-line 2Q26 connection update, with fibre connections growing +7k versus 1Q26, partially offsetting the -15k decline in...

Forsyth Barr

Telco Sector: ComCom Annual Telecommunications Report

The Commerce Commission (ComCom) has just released its annual Telecommunications Monitoring report for the year ended June 2025. The growth of...

Forsyth Barr

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