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>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

Thematic (Sector/Industry)

<ul><li>New Zealand’s electricity sector finished September 2025 on firmer footing; Cabinet’s review of the electricity sector delivered a benign outcome; the Commerce Commission (ComCom) has given draft approval to the Huntly Firming Option (HFO) deal; and hydro storage is back above average.</li><li>The big news from the past month was Cabinet’s response to the Frontier review of New Zealand’s electricity sector, which stopped short of fundamental reform, opting instead for incremental adjustments.</li><li>Interest rate falls during September 2025 saw the sector dividend-yield spread to the 10-year government bond rate increase to its highest level in three years.</li></ul>

New Zealand’s electricity sector finished September 2025 on firmer footing; Cabinet’s review of the electricity sector delivered a benign outcome; the Commerce Commission (ComCom) has given draft approval to the Huntly Firming Option (HFO) deal; and hydro storage is back above average.The big news from the past month was Cabinet’s response to the Frontier review of New Zealand’s electricity sector, which stopped short of fundamental reform, opting instead for incremental adjustments.Interest rate falls during September 2025 saw the sector dividend-yield spread to the 10-year government bond rate increase to its highest level in three years.

Power Points - WET AND WINDY—October 2025

<ul><li>The outcome of the long-awaited Frontier report and Cabinet review is a package of proposals that tweaks New Zealand’s energy system but falls well short of structural reform.</li><li>The two most significant proposals are government underwriting of an LNG import terminal (although this is not yet certain) and removing the perceived barrier that partially Crown-owned generator-retailers were unable to raise capital.</li><li>With the review outcomes better than expected, our sector valuations and ratings are unchanged. Contact Energy (CEN), Mercury (MCY), and Meridian Energy (MEL) are rated OUTPERFORM, while Genesis Energy (GNE) is rated NEUTRAL.</li></ul>

The outcome of the long-awaited Frontier report and Cabinet review is a package of proposals that tweaks New Zealand’s energy system but falls well short of structural reform.The two most significant proposals are government underwriting of an LNG import terminal (although this is not yet certain) and removing the perceived barrier that partially Crown-owned generator-retailers were unable to raise capital.With the review outcomes better than expected, our sector valuations and ratings are unchanged. Contact Energy (CEN), Mercury (MCY), and Meridian Energy (MEL) are rated OUTPERFORM, while Genesis Energy (GNE) is rated NEUTRAL.

Electricity Sector - No Electric Shocks from Cabinet Review

<ul><li>We like the valuation metrics that the sector is currently offering, with the electricity sector underperforming its yield peers despite performing well vs the market.</li><li>Electricity demand increased +5.7% in August 2025 vs 2024, with 60% of the increase due to New Zealand’s largest consumer, NZAS, returning to full demand in late August for the first time in 14 months.</li><li>FY25 saw the combined EBITDAF of the generator–retailers fall -9% vs FY24.</li></ul>

We like the valuation metrics that the sector is currently offering, with the electricity sector underperforming its yield peers despite performing well vs the market.Electricity demand increased +5.7% in August 2025 vs 2024, with 60% of the increase due to New Zealand’s largest consumer, NZAS, returning to full demand in late August for the first time in 14 months.FY25 saw the combined EBITDAF of the generator–retailers fall -9% vs FY24.

Power Points - DEMAND STORMS BACK—SEPTEMBER 2025

<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

New Zealand

Meridian Energy Ltd. operates as a state-owned electricity generator. The Company produces hydro-electric power and supplies electricity to residential, business, and rural customers. Meridian Energy provides services throughout New Zealand.

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Meridian Energy (MEL NZ)

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

Power Points - WET AND WINDY—October 2025

Interest rate falls during September 2025 saw the sector dividend-yield spread to the 10-year government bond rate increase to its highest level in...

Forsyth Barr

Electricity Sector - No Electric Shocks from Cabinet Review

The outcome of the long-awaited Frontier report and Cabinet review is a package of proposals that tweaks New Zealand’s energy system but falls well...

Forsyth Barr

Power Points - DEMAND STORMS BACK—SEPTEMBER 2025

We like the valuation metrics that the sector is currently offering, with the electricity sector underperforming its yield peers despite performing...

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

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