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>Manawa Energy (MNW) will be glad 2Q25/1H25 is behind it, and that it can look forward to better operating conditions in the coming months.</li><li>Low hydro generation and reduced wind volumes challenged MNW's risk management.</li><li>While 1H25 EBITDAF is expected to be a record low, MNW has come through this challenging period well and should have a much stronger 2H25. </li></ul>

Manawa Energy (MNW) will be glad 2Q25/1H25 is behind it, and that it can look forward to better operating conditions in the coming months.Low hydro generation and reduced wind volumes challenged MNW's risk management.While 1H25 EBITDAF is expected to be a record low, MNW has come through this challenging period well and should have a much stronger 2H25. 

Manawa Energy - 1H Slog Into the Wind Complete, Downwind in 2H — 2Q25 Op Stats

Thematic (Sector/Industry)

<div><div><div><div><ul><li>The government has announced 149 projects to be included in its Fast-Track Approvals Bill, expected to pass later this year.</li><li>This has the potential to give a much needed injection of energy into the downbeat NZ economy.</li><li>Paired with all but certain continued interest rate cuts, the contours of an economic recovery are starting to take shape.</li></ul></div></div></div></div>

The government has announced 149 projects to be included in its Fast-Track Approvals Bill, expected to pass later this year.This has the potential to give a much needed injection of energy into the downbeat NZ economy.Paired with all but certain continued interest rate cuts, the contours of an economic recovery are starting to take shape.

New Zealand Moving Out of the Slow Lane - Fast-Track Approvals Welcome News

<ul><li>September 2024 was a strong month for some, but a soft month for others.</li><li>Replenishment of the hydro lakes was a welcome relief for the sector, but hedge contracts designed to protect downside risk from ongoing dry conditions has seen Meridian Energy (MEL) struggle.</li><li>Contact Energy (CEN) and Mercury (MCY) have benefitted the most in the short-term from the rapid change in conditions. </li></ul>

September 2024 was a strong month for some, but a soft month for others.Replenishment of the hydro lakes was a welcome relief for the sector, but hedge contracts designed to protect downside risk from ongoing dry conditions has seen Meridian Energy (MEL) struggle.Contact Energy (CEN) and Mercury (MCY) have benefitted the most in the short-term from the rapid change in conditions. 

Power Points - Water Works Wonders​​​​​​​ — October 2024

<ul><li>We upgrade Mercury (MCY) to OUTPERFORM from NEUTRAL, as it is offering good value relative to Meridian Energy (MEL) in particular, and we expect near-term FY25 EBITDAF earnings will be better than guidance following recent rain.</li><li>Since 2018 MEL has always traded at a premium to its peers, but is currently trading at a near record premium using our preferred EV/EBITDAF less stay-in-business (SIB) capex metric.</li><li>Looking at the three largest generator/retailers, MEL's equity value is greater than Contact Energy (CEN) and MCY combined, and yet CEN and MCY's combined businesses generate over 30% more electricity and earnings than MEL. </li></ul>

We upgrade Mercury (MCY) to OUTPERFORM from NEUTRAL, as it is offering good value relative to Meridian Energy (MEL) in particular, and we expect near-term FY25 EBITDAF earnings will be better than guidance following recent rain.Since 2018 MEL has always traded at a premium to its peers, but is currently trading at a near record premium using our preferred EV/EBITDAF less stay-in-business (SIB) capex metric.Looking at the three largest generator/retailers, MEL's equity value is greater than Contact Energy (CEN) and MCY combined, and yet CEN and MCY's combined businesses generate over 30% more electricity and earnings than MEL. 

Electricity Sector - MCY Shining Brighter Than MEL

<ul><li>Based on the current share prices of Contact Energy (CEN) and Manawa Energy (MNW), our view on the value of both stocks, and our view on whether the Commerce Commission (ComCom) will grant clearance for CEN's takeover of MNW, MNW shareholders should consider switching to CEN.</li><li>Doing so locks in some of the upside from the takeover, but removes the downside risk the ComCom does not grant clearance.</li><li>Our analysis suggests the market is pricing in a ~60% probability the deal will get clearance, slightly higher than our current view, making a switch more favourable. </li></ul>

Based on the current share prices of Contact Energy (CEN) and Manawa Energy (MNW), our view on the value of both stocks, and our view on whether the Commerce Commission (ComCom) will grant clearance for CEN's takeover of MNW, MNW shareholders should consider switching to CEN.Doing so locks in some of the upside from the takeover, but removes the downside risk the ComCom does not grant clearance.Our analysis suggests the market is pricing in a ~60% probability the deal will get clearance, slightly higher than our current view, making a switch more favourable. 

New Zealand

Manawa Energy Limited is a renewable energy company. The Company generate powers through hydro power stations and wind farms throughout Australasia. Manawa Energy is also engaged in electricity distribution.

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Manawa Energy Ltd (MNW NZ)

Manawa Energy - 1H Slog Into the Wind Complete, Downwind in 2H — 2Q25 Op Stats

Manawa Energy (MNW) will be glad 2Q25/1H25 is behind it, and that it can look forward to better operating conditions in the coming months.

Forsyth Barr

New Zealand Moving Out of the Slow Lane - Fast-Track Approvals Welcome News

The government has announced 149 projects to be included in its Fast-Track Approvals Bill, expected to pass later this year.

Forsyth Barr

Power Points - Water Works Wonders — October 2024

These two stocks are our preferred of the large generator/retailers and along with Manawa Energy (MNW) are rated OUTPERFORM.

Forsyth Barr

Electricity Sector - MCY Shining Brighter Than MEL

MCY joins CEN and Manawa Energy (MNW) as our preferred electricity sector stocks with OUTPERFORM ratings. Genesis Energy (GNE) and MEL are rated...

Forsyth Barr

Manawa Energy - Time to Flip the Switch?

Our analysis suggests the market is pricing in a ~60% probability the deal will get clearance, slightly higher than our current view, making a...

Forsyth Barr

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52-week Range

Market Cap (USDm)

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Manawa Energy - 1H Slog Into the Wind Complete, Downwind in 2H — 2Q25 Op Stats

Manawa Energy (MNW) will be glad 2Q25/1H25 is behind it, and that it can look forward to better operating conditions in the coming months.

Forsyth Barr

New Zealand Moving Out of the Slow Lane - Fast-Track Approvals Welcome News

The government has announced 149 projects to be included in its Fast-Track Approvals Bill, expected to pass later this year.

Forsyth Barr

Power Points - Water Works Wonders​​​​​​​ — October 2024

These two stocks are our preferred of the large generator/retailers and along with Manawa Energy (MNW) are rated OUTPERFORM.

Forsyth Barr

Electricity Sector - MCY Shining Brighter Than MEL

MCY joins CEN and Manawa Energy (MNW) as our preferred electricity sector stocks with OUTPERFORM ratings. Genesis Energy (GNE) and MEL are rated...

Forsyth Barr

Manawa Energy - Time to Flip the Switch?

Our analysis suggests the market is pricing in a ~60% probability the deal will get clearance, slightly higher than our current view, making a...

Forsyth Barr

Power Points - Water Works Wonders — October 2024