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>The wider transport industry is normalising, albeit at different rates, after three years of extreme influences</li><li>The most negatively impacted were the airlines, yet they’ve been quick to return to strong levels of profitability thanks to record yields as industry capacity has been slow to return.</li><li>The most positively impacted through COVID were the shipping lines, followed by freight forwarders, both benefitting from excessive shipping rates due to industry congestion, reducing available capacity.</li></ul>

The wider transport industry is normalising, albeit at different rates, after three years of extreme influencesThe most negatively impacted were the airlines, yet they’ve been quick to return to strong levels of profitability thanks to record yields as industry capacity has been slow to return.The most positively impacted through COVID were the shipping lines, followed by freight forwarders, both benefitting from excessive shipping rates due to industry congestion, reducing available capacity.

Equity Bottom-Up

<ul><li>We expect Freightways (FRW) to report a strong FY26 result on 17 August 2026, driven by Express Package despite higher fuel costs.</li><li>We forecast strong growth in Express Package profits, supported by the first-time consolidation (five months) of newly acquired VTFE, strong volume growth at Allied Express, a strong AUD, domestic parcel price increases driving gross margin expansion, and positive volume development across NZ parcels and Big Chill.</li><li>Information Management is likely to show improved margin performance.</li></ul>

We expect Freightways (FRW) to report a strong FY26 result on 17 August 2026, driven by Express Package despite higher fuel costs.We forecast strong growth in Express Package profits, supported by the first-time consolidation (five months) of newly acquired VTFE, strong volume growth at Allied Express, a strong AUD, domestic parcel price increases driving gross margin expansion, and positive volume development across NZ parcels and Big Chill.Information Management is likely to show improved margin performance.

Freightways FY26 Preview—Express Package Set to Deliver

<ul><li>Abnormal gains in international freight are unwinding rapidly, particularly for seafreight, with global spot indices now down ~80% from their peaks but still above pre-pandemic levels</li><li>Air cargo's rates compression has been slower, mirroring the slow recovery in air seat capacity</li><li>In this normalising, yet far from normal environment, Freightways (FRE; OUTPERFORM) and Mainfreight (MFT; OUTPERFORM) remain our preferred exposures in the sector</li></ul>

Abnormal gains in international freight are unwinding rapidly, particularly for seafreight, with global spot indices now down ~80% from their peaks but still above pre-pandemic levelsAir cargo's rates compression has been slower, mirroring the slow recovery in air seat capacityIn this normalising, yet far from normal environment, Freightways (FRE; OUTPERFORM) and Mainfreight (MFT; OUTPERFORM) remain our preferred exposures in the sector

Transport Trends: Nothing Normal About the Normalising

<ul><li>Freightways (FRE): We are attracted to FRE due to (1) the strength of new customer, (2) further pricing for effort opportunities, and (3) the disciplined expansion into the Australian express freight market</li><li>Mainfreight (MFT): MFT is a high quality business with a proven track record for growth</li><li>Port of Tauranga (POT): POT offers attractive defensive characteristics in the current environment</li></ul>

Freightways (FRE): We are attracted to FRE due to (1) the strength of new customer, (2) further pricing for effort opportunities, and (3) the disciplined expansion into the Australian express freight marketMainfreight (MFT): MFT is a high quality business with a proven track record for growthPort of Tauranga (POT): POT offers attractive defensive characteristics in the current environment

<ul><li>Recent global freight industry data points and peer commentary suggest more downside than upside risk to Mainfreight's (MFT) near-term outlook.</li><li>After a challenging start to FY26 (PBT was down -24% in the first 17 weeks), MFT is in catch-up mode, though its prior-year comparatives become more challenging for the remainder of the year.</li><li>Despite this backdrop, MFT's one-year forward PE has firmed to ~24x in recent weeks, while its closest global peers have de-rated.</li></ul>

Recent global freight industry data points and peer commentary suggest more downside than upside risk to Mainfreight's (MFT) near-term outlook.After a challenging start to FY26 (PBT was down -24% in the first 17 weeks), MFT is in catch-up mode, though its prior-year comparatives become more challenging for the remainder of the year.Despite this backdrop, MFT's one-year forward PE has firmed to ~24x in recent weeks, while its closest global peers have de-rated.

New Zealand

Mainfreight Limited provides and supplies freight, warehousing and logistics services throughout New Zealand and Australia.  The Company provides freight forwarding services by road, rail, sea and air along with providing international freight forwarding services, customs clearance services and specialized handling of hazardous substances.

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Mainfreight Ltd (MFT NZ)

Transport Trends: Reverting to the Mean

The wider transport industry is normalising, albeit at different rates, after three years of extreme influences; the most negatively impacted were...

Forsyth Barr

Freightways FY26 Preview—Express Package Set to Deliver

We expect Freightways (FRW) to report a strong FY26 result on 17 August 2026, driven by Express Package despite higher fuel costs. We forecast...

Forsyth Barr

Transport Trends: Nothing Normal About the Normalising

The industry is normalising, but from different angles and at a different rates: Abnormal gains in international freight are unwinding rapidly,...

Forsyth Barr

Transport Trends: Mixed Bag

The post-pandemic world is a mixed bag for the transport sector: aviation is enjoying an expected and much needed resurgence; global airfreight...

Forsyth Barr

Mainfreight Freighting Re-Rating

Recent global freight industry data points and peer commentary suggest more downside than upside risk to Mainfreight's (MFT) near-term outlook.

Forsyth Barr

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