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.

Thematic (Sector/Industry)

<ul><li>After almost two years of negotiation, the deal has been done, with NZAS set to be New Zealand's largest electricity consumer for the foreseeable future.</li><li>It is a positive for the sector in many different ways, with the primary upside being the certainty that the deal provides.</li><li>Relative to our expectations, CEN, MCY and MNW were the winners from the deal, with MEL and GNE slight losers. </li></ul>

After almost two years of negotiation, the deal has been done, with NZAS set to be New Zealand's largest electricity consumer for the foreseeable future.It is a positive for the sector in many different ways, with the primary upside being the certainty that the deal provides.Relative to our expectations, CEN, MCY and MNW were the winners from the deal, with MEL and GNE slight losers. 

Electricity Sector - NZAS Powers On — The Deal Is Done

<ul><li>Electricity demand growth has continued to surge, helping to keep wholesale electricity prices elevated despite the welcome top-up of hydro storage lakes that now sit close to average.</li><li>It was also a good month for NZAS, with the spike in aluminium prices a timely boost as Rio Tinto closes in on making a decision over the future of the smelter.</li><li>Following our report Demanding Some Attention — Sector Upgraded published 29 April 2024, which lifted sector target prices on average +18%, we upgraded the rating of three stocks. </li></ul>

Electricity demand growth has continued to surge, helping to keep wholesale electricity prices elevated despite the welcome top-up of hydro storage lakes that now sit close to average.It was also a good month for NZAS, with the spike in aluminium prices a timely boost as Rio Tinto closes in on making a decision over the future of the smelter.Following our report Demanding Some Attention — Sector Upgraded published 29 April 2024, which lifted sector target prices on average +18%, we upgraded the rating of three stocks. 

Power Points - Demand Powers On — May 2024

<ul><li>We are more positive on the long-term outlook for the electricity sector and upgrade Contact Energy (CEN) to OUTPERFORM and Meridian Energy (MEL) and Manawa Energy (MNW) to NEUTRAL.</li><li>Driving the more positive outlook of the sector is a view that wholesale electricity prices are likely to be higher than previously thought.</li><li>Factors behind the assumption change include stronger near-term electricity demand growth requiring more high cost baseload thermal generation for longer and the need to build generation projects higher up the demand stack. </li></ul>

We are more positive on the long-term outlook for the electricity sector and upgrade Contact Energy (CEN) to OUTPERFORM and Meridian Energy (MEL) and Manawa Energy (MNW) to NEUTRAL.Driving the more positive outlook of the sector is a view that wholesale electricity prices are likely to be higher than previously thought.Factors behind the assumption change include stronger near-term electricity demand growth requiring more high cost baseload thermal generation for longer and the need to build generation projects higher up the demand stack. 

Electricity Sector  - Demanding Some Attention — Sector Upgraded

Equity Bottom-Up

<ul><li>Contact Energy (CEN) has got through a tricky 3Q24 largely unscathed and is well positioned for 4Q24 with above average hydro storage.</li><li>In addition, CEN should see the month-long reliability run of its Tauhara geothermal development project, which may now be fully commissioned before the end of FY24, ~three months ahead of CEN's revised timetable.</li><li>We have lifted our FY24 EBITDAF forecast +5% and CEN only has to match FY23 performance to deliver a result ~+NZ$40m ahead of its FY24 EBITDAF guidance. </li></ul>

Contact Energy (CEN) has got through a tricky 3Q24 largely unscathed and is well positioned for 4Q24 with above average hydro storage.In addition, CEN should see the month-long reliability run of its Tauhara geothermal development project, which may now be fully commissioned before the end of FY24, ~three months ahead of CEN's revised timetable.We have lifted our FY24 EBITDAF forecast +5% and CEN only has to match FY23 performance to deliver a result ~+NZ$40m ahead of its FY24 EBITDAF guidance. 

Contact Energy  - Steaming Ahead — March 2024 Op Stats

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/genex-power-ltd" target="_blank" data-smartkarma-citation="entities:29079:1" rel="noopener">Genex Power Ltd (GNX AU)</a> has entered a transaction implementation deed with <a href="https://www.smartkarma.com/entities/electric-power-development-c" target="_blank" data-smartkarma-citation="entities:292:1" rel="noopener">Electric Power Development C (9513 JP)</a> for a scheme (A$0.275) and an off-market takeover offer (A$0.270). </li>
<li>Skip could vote against the scheme due to the low 10% premium to its 2022 offer and Genex’s operational capacity rising by 2.7x by the end of 2024.</li>
<li>The likely scenario is that J-POWER succeeds with its takeover offer. At the last close, the gross spread of the scheme and takeover offer was 3.8% and 1.9%, respectively.   </li>
</ul>



Genex Power Ltd (GNX AU) has entered a transaction implementation deed with Electric Power Development C (9513 JP) for a scheme (A$0.275) and an off-market takeover offer (A$0.270). 
Skip could vote against the scheme due to the low 10% premium to its 2022 offer and Genex’s operational capacity rising by 2.7x by the end of 2024.
The likely scenario is that J-POWER succeeds with its takeover offer. At the last close, the gross spread of the scheme and takeover offer was 3.8% and 1.9%, respectively.   


Genex Power (GNX AU): J-Power’s Binding Proposal as Skip’s Intentions Remain Unknown

New Zealand

Contact Energy Limited is a diversified and integrated energy company which focuses on the generation of electricity and the sale of electricity and gas in New Zealand.

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Contact Energy (CEN NZ)

Electricity Sector - NZAS Powers On — The Deal Is Done

After almost two years of negotiation, the deal has been done, with NZAS set to be New Zealand's largest electricity consumer for the foreseeable...

Forsyth Barr

Power Points - Demand Powers On — May 2024

Electricity demand growth has continued to surge, helping to keep wholesale electricity prices elevated despite the welcome top-up of hydro storage...

Forsyth Barr

Electricity Sector - Demanding Some Attention — Sector Upgraded

We are more positive on the long-term outlook for the electricity sector and upgrade Contact Energy (CEN) to OUTPERFORM and Meridian Energy (MEL)...

Forsyth Barr

Contact Energy - Steaming Ahead — March 2024 Op Stats

Contact Energy (CEN) has got through a tricky 3Q24 largely unscathed and is well positioned for 4Q24 with above average hydro storage. In...

Forsyth Barr

Genex Power (GNX AU): J-Power’s Binding Proposal as Skip’s Intentions Remain Unknown

Skip could derail the scheme vote. The likely scenario is that J-POWER succeeds with its takeover offer. At the last close, the gross spread of the...

Arun George

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