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>Mercury's investor day highlighted several incremental positives that should deliver value for investors, including a FY30 EBITDAF target implying 5%-7% annualized growth.</li><li>There is potential upside from geothermal development through a mix of greenfield and brownfield projects, albeit post-2030.</li><li>Mercury's new management team is expected to maintain its strong execution track record, reaffirming MCY as a top pick in the electricity sector with an OUTPERFORM rating.</li></ul>

Mercury's investor day highlighted several incremental positives that should deliver value for investors, including a FY30 EBITDAF target implying 5%-7% annualized growth.There is potential upside from geothermal development through a mix of greenfield and brownfield projects, albeit post-2030.Mercury's new management team is expected to maintain its strong execution track record, reaffirming MCY as a top pick in the electricity sector with an OUTPERFORM rating.

Mercury Developing Options—2025 IR Day Take-Outs

<ul><li>The most notable announcement in the past month was the deal between the four large generator/retailers to support the retention of the third Rankine Unit through to at least 2036.</li><li>We have upgraded Contact Energy (CEN) to OUTPERFORM.</li><li>July 2025 was also notable for very high peak demand periods that largely went unrecognised, and wholesale electricity prices ~-70% lower than July 2024.</li></ul>

The most notable announcement in the past month was the deal between the four large generator/retailers to support the retention of the third Rankine Unit through to at least 2036.We have upgraded Contact Energy (CEN) to OUTPERFORM.July 2025 was also notable for very high peak demand periods that largely went unrecognised, and wholesale electricity prices ~-70% lower than July 2024.

Power Points Delivering Sector Security—August 2025

<ul><li>Mercury (MCY) has downgraded FY25 EBITDAF guidance due to a record low in hydro generation, impacting the balance sheet and short-term dividend path.</li><li>Despite short-term challenges, Mercury remains a strong business with good growth opportunities and a growing dividend, maintaining an OUTPERFORM rating.</li><li>The target price for Mercury has been reduced to NZ$6.95 on lower short-term earnings and dividend path, with potential for recovery as conditions improve.</li></ul>

Mercury (MCY) has downgraded FY25 EBITDAF guidance due to a record low in hydro generation, impacting the balance sheet and short-term dividend path.Despite short-term challenges, Mercury remains a strong business with good growth opportunities and a growing dividend, maintaining an OUTPERFORM rating.The target price for Mercury has been reduced to NZ$6.95 on lower short-term earnings and dividend path, with potential for recovery as conditions improve.

Mercury 3Q25 Op Stats—A Bit of Rain Would Be Nice

<ul>
<li>Contact Energy (CEN) has finished FY25 well, and we calculate EBITDAF will be consistent with CEN’s NZ$790m guidance.</li>
<li>Better hydro inflows and increased geothermal generation reduced the need to run thermal generation, lowering CEN’s 4Q25 cost of generation.</li>
<li>CEN’s key challenge for FY26 is integrating Manawa Energy (MNW) into the business and extracting the synergy benefits—the transaction was completed on 11 July 2025.</li>
</ul>


Contact Energy (CEN) has finished FY25 well, and we calculate EBITDAF will be consistent with CEN’s NZ$790m guidance.
Better hydro inflows and increased geothermal generation reduced the need to run thermal generation, lowering CEN’s 4Q25 cost of generation.
CEN’s key challenge for FY26 is integrating Manawa Energy (MNW) into the business and extracting the synergy benefits—the transaction was completed on 11 July 2025.


Contact Energy Good Finish to FY25, Work Ahead for FY26

Thematic (Sector/Industry)

<ul><li>Hydro storage has recovered above the long-run average, benefiting all generators, with Mercury (MCY) being the biggest winner in June 2025.</li><li>Regulatory uncertainty looms, but is not expected to materially affect valuations, with MCY rated OUTPERFORM and others NEUTRAL.</li><li>Genesis Energy (GNE) is considering a new peaking plant, with discussions progressing positively to extend the Rankine units' operational life.</li></ul>

Hydro storage has recovered above the long-run average, benefiting all generators, with Mercury (MCY) being the biggest winner in June 2025.Regulatory uncertainty looms, but is not expected to materially affect valuations, with MCY rated OUTPERFORM and others NEUTRAL.Genesis Energy (GNE) is considering a new peaking plant, with discussions progressing positively to extend the Rankine units' operational life.

Power Points Watts in the Bank—July 2025

Malaysia

Mercury Industries Berhad is an investment holding company.  The Company, through its subsidiaries, invests and develops property, and markets paint and other related products.  Mercury Industries also manufactures and sells putty, underseal, lacquer, and paints for the automotive Industry.

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Mercury Industries (MER MK)

Mercury Developing Options—2025 IR Day Take-Outs

Mercury's investor day highlighted several incremental positives that should deliver value for investors, including a FY30 EBITDAF target implying...

Forsyth Barr

Power Points Delivering Sector Security—August 2025

The most notable announcement in the past month was the deal between the four large generator/retailers to support the retention of the third...

Forsyth Barr

Mercury 3Q25 Op Stats—A Bit of Rain Would Be Nice

Mercury (MCY) has downgraded FY25 EBITDAF guidance due to a record low in hydro generation, impacting the balance sheet and short-term dividend path.

Forsyth Barr

Contact Energy Good Finish to FY25, Work Ahead for FY26

CEN’s key challenge for FY26 is integrating Manawa Energy (MNW) into the business and extracting the synergy benefits—the transaction was completed...

Forsyth Barr

Power Points Watts in the Bank—July 2025

Hydro storage has recovered above the long-run average, benefiting all generators, with Mercury (MCY) being the biggest winner in June 2025.

Forsyth Barr

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