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>November 2025 was dominated by three of the four generator-retailers hosting investor days—all three of which were positive on the long-term outlook for the sector and focused on how each business will meet the expected demand growth and fuel supply challenges.</li><li>Looking ahead to 2026, key themes are likely to be the election, the progression of new developments, the gas market (and the LNG decision) and electricity demand growth.</li><li>Our preferred sector exposures are Contact Energy (CEN) and Mercury (MCY), both rated OUTPERFORM.</li></ul>

November 2025 was dominated by three of the four generator-retailers hosting investor days—all three of which were positive on the long-term outlook for the sector and focused on how each business will meet the expected demand growth and fuel supply challenges.Looking ahead to 2026, key themes are likely to be the election, the progression of new developments, the gas market (and the LNG decision) and electricity demand growth.Our preferred sector exposures are Contact Energy (CEN) and Mercury (MCY), both rated OUTPERFORM.

Power Points - FUELLED FOR 2026—December 2025

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>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>October 2025 broke several records—the highest geothermal, wind, and solar generation for October; a renewable generation record; and, at month end, the snowpack was at its highest ever for this time of year.</li><li>The system is long energy, with hydro storage ~+50% above average, so we expect low wholesale electricity prices to persist for a while, although the NIWA climate survey indicates more settled weather ahead, and an 80% chance of La Niña conditions.</li><li>Genesis Energy (GNE) is the main short-term beneficiary of current operating conditions, as it can switch off its high-cost thermal generation.</li></ul>

October 2025 broke several records—the highest geothermal, wind, and solar generation for October; a renewable generation record; and, at month end, the snowpack was at its highest ever for this time of year.The system is long energy, with hydro storage ~+50% above average, so we expect low wholesale electricity prices to persist for a while, although the NIWA climate survey indicates more settled weather ahead, and an 80% chance of La Niña conditions.Genesis Energy (GNE) is the main short-term beneficiary of current operating conditions, as it can switch off its high-cost thermal generation.

Power Points Renewables Rule The Roost—November 2025

<ul><li>New Zealand is around 12 months from a general election, where electricity is more likely to be an election issue than at any election since 2014.</li><li>Meridian Energy (MEL), as the largest hydro generator, is the company most at risk from the implementation of a negative policy, and we downgrade it to NEUTRAL from OUTPERFORM.</li><li>The Frontier report, released 1 October 2025, is the latest in a long line of studies into the electricity market.</li></ul>

New Zealand is around 12 months from a general election, where electricity is more likely to be an election issue than at any election since 2014.Meridian Energy (MEL), as the largest hydro generator, is the company most at risk from the implementation of a negative policy, and we downgrade it to NEUTRAL from OUTPERFORM.The Frontier report, released 1 October 2025, is the latest in a long line of studies into the electricity market.

Electricity Sector - Pondering The Political Landscape—Assessing The Headwind

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)

Power Points - FUELLED FOR 2026—December 2025

Looking ahead to 2026, key themes are likely to be the election, the progression of new developments, the gas market (and the LNG decision) and...

Forsyth Barr

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

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

Power Points Renewables Rule The Roost—November 2025

Genesis Energy (GNE) is the main short-term beneficiary of current operating conditions, as it can switch off its high-cost thermal generation.

Forsyth Barr

Electricity Sector - Pondering The Political Landscape—Assessing The Headwind

New Zealand is around 12 months from a general election, where electricity is more likely to be an election issue than at any election since 2014.

Forsyth Barr

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