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>Whilst NZAS will have to pay more for its electricity it is compensated by strong aluminium prices</li><li>MEL is in the box seat to supply less, with CEN, MCY and MNW to supply more</li><li>Big earnings uplift for MEL from CY2025, CEN and MNW an earnings hit, MCY a negative value impact</li></ul>

Whilst NZAS will have to pay more for its electricity it is compensated by strong aluminium pricesMEL is in the box seat to supply less, with CEN, MCY and MNW to supply moreBig earnings uplift for MEL from CY2025, CEN and MNW an earnings hit, MCY a negative value impact

Electricity Sector: NZAS Set to Stay, But Will Have to Pay

<ul><li>October 2022 was a repeat of recent months, with continued strong North Island hydro generation, low wholesale electricity spot prices, and rising interest rates continuing to squeeze sector valuations</li><li>Wholesale market conditions again favour North Island generators</li><li>Wholesale market conditions again favour North Island generators</li></ul>

October 2022 was a repeat of recent months, with continued strong North Island hydro generation, low wholesale electricity spot prices, and rising interest rates continuing to squeeze sector valuationsWholesale market conditions again favour North Island generatorsWholesale market conditions again favour North Island generators

Power Points: Wind Blows, Hydro Flows — November 2022

Equity Bottom-Up

<ul><li>Mercury (MCY) has upgraded FY23 hydro generation expectations +150GWh (+3.4%), leading to a +NZ$40m FY23 normalised EBITDAF guidance upgrade to NZ$795m</li><li>Consolidated retail highlights step change taking place in MCY's business</li><li>Forecast changes positive, but interest rate rises present valuation headwinds</li></ul>

Mercury (MCY) has upgraded FY23 hydro generation expectations +150GWh (+3.4%), leading to a +NZ$40m FY23 normalised EBITDAF guidance upgrade to NZ$795mConsolidated retail highlights step change taking place in MCY's businessForecast changes positive, but interest rate rises present valuation headwinds

<ul><li>First trading of 2026 ASX futures shows only a small decline from 2025 prices</li><li>Cold snap at the beginning of September 2022 highlights the need for gas-peaking plant</li><li>If the fixed interest market is right, electricity stocks are expensive</li></ul>

First trading of 2026 ASX futures shows only a small decline from 2025 pricesCold snap at the beginning of September 2022 highlights the need for gas-peaking plantIf the fixed interest market is right, electricity stocks are expensive

Power Points: Wild Wholesale Price Ride — October 2022

<div><ul><li>Locking in a bigger option but at a relatively higher price: Consents on Kaiwera Downs were due to lapse in 2023, so MCY's decision to build Kaiwera Downs locks in the option to build the larger stage two (200MW)</li><li>Development indicates MCY is confident South Island demand will remain</li><li>Forecast changes brings forward Kaiwera Downs and lifts medium-term wholesale electricity price assumptions</li></ul></div>

Locking in a bigger option but at a relatively higher price: Consents on Kaiwera Downs were due to lapse in 2023, so MCY's decision to build Kaiwera Downs locks in the option to build the larger stage two (200MW)Development indicates MCY is confident South Island demand will remainForecast changes brings forward Kaiwera Downs and lifts medium-term wholesale electricity price assumptions

New Zealand

Mercury NZ Ltd provides utility services. The Company generates and supplies electricity from hydro, geothermal, gas-fired, and wind power stations, as well as owns and manages bio-energy power plants. Mighty River Power serves customers throughout New Zealand.

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Mercury NZ Ltd (MCY NZ)

Electricity Sector: NZAS Set to Stay, But Will Have to Pay

NZAS is set to remain open as the focus on decarbonisation means the economics of hydro-backed aluminium smelters have never looked better; We have...

Forsyth Barr

Power Points: Wind Blows, Hydro Flows — November 2022

October 2022 was a repeat of recent months, with continued strong North Island hydro generation, low wholesale electricity spot prices, and rising...

Forsyth Barr

Mercury: When It Rains It Pours — 1Q23

Mercury (MCY) has upgraded FY23 hydro generation expectations +150GWh (+3.4%), leading to a +NZ$40m FY23 normalised EBITDAF guidance upgrade to...

Forsyth Barr

Power Points: Wild Wholesale Price Ride — October 2022

The cold snap in early September 2022 resulted in wild wholesale electricity price fluctuations, highlighting the market would benefit from more...

Forsyth Barr

Mercury: Winding Up Kaiwera Downs

Mercury's (MCY) announcement that it is building stage one of its Kaiwera Downs wind farm in Southland was expected, albeit it has come a little...

Forsyth Barr

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