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>The a2 Milk Company (ATM) has downgraded its FY26 guidance due to supply chain issues.</li><li>A return to its recent elevated multiple is only likely once ATM demonstrates these impacts are transitory.</li><li>Retain NEUTRAL.</li></ul>

The a2 Milk Company (ATM) has downgraded its FY26 guidance due to supply chain issues.A return to its recent elevated multiple is only likely once ATM demonstrates these impacts are transitory.Retain NEUTRAL.

Fisher & Paykel Healthcare Cor / Equity Bottom-Up

<ul><li>We make a number of temporary changes to our company coverage responsibilities with immediate effect due to Matt Montgomerie's period of travel-related extended leave.</li><li>Coverage temporarily transferred to Ben Crozier.</li><li>Matt is due to return in early 2027.</li></ul>

We make a number of temporary changes to our company coverage responsibilities with immediate effect due to Matt Montgomerie's period of travel-related extended leave.Coverage temporarily transferred to Ben Crozier.Matt is due to return in early 2027.

Company Coverage Temporary Coverage Changes

<ul><li>We upgrade our rating on The a2 Milk Company (ATM) to NEUTRAL from UNDERPERFORM.</li><li>Our change in view reflects two factors: (1) notable valuation multiple de-rating from when we downgraded to UNDERPERFORM in September 2025; and (2) ongoing strong execution, opening up earnings upside risk ahead of the 1H26 result (discussed throughout this report).</li><li>Absent earnings upside, we also see numerous potential catalysts over the next six to 12 months: (1) US FDA approval; (2) SAMR registration at a2 Pokeno; (3) competitor recall market share opportunities (albeit we are not convinced on this yet); and (4) further special dividends (our medium-term dividends are well ahead of consensus).</li></ul>

We upgrade our rating on The a2 Milk Company (ATM) to NEUTRAL from UNDERPERFORM.Our change in view reflects two factors: (1) notable valuation multiple de-rating from when we downgraded to UNDERPERFORM in September 2025; and (2) ongoing strong execution, opening up earnings upside risk ahead of the 1H26 result (discussed throughout this report).Absent earnings upside, we also see numerous potential catalysts over the next six to 12 months: (1) US FDA approval; (2) SAMR registration at a2 Pokeno; (3) competitor recall market share opportunities (albeit we are not convinced on this yet); and (4) further special dividends (our medium-term dividends are well ahead of consensus).

The A2 Milk Company A More Balanced Formula—Up To NEUTRAL

<ul><li>Newsflow has continued to increase on the global infant formula recall, and we are receiving many questions from investors.</li><li>Our broad thoughts at this stage are: (1) we think The a2 Milk Company (ATM) is in the clear from any negative impacts, although we recognise why some investors are cautious; and (2) the possible China upside is hard to assess, given Danone’s China products source the problem ARA ingredient from another supplier and Nestlé’s China recall exposure is very limited.</li><li>This is clearly a sensitive situation, with newsflow (and our view) likely to evolve.</li></ul>

Newsflow has continued to increase on the global infant formula recall, and we are receiving many questions from investors.Our broad thoughts at this stage are: (1) we think The a2 Milk Company (ATM) is in the clear from any negative impacts, although we recognise why some investors are cautious; and (2) the possible China upside is hard to assess, given Danone’s China products source the problem ARA ingredient from another supplier and Nestlé’s China recall exposure is very limited.This is clearly a sensitive situation, with newsflow (and our view) likely to evolve.

The A2 Milk Company Infant Formula Recall What We Know So Far

<ul><li>On 22 December 2025, NZ signed a free trade agreement (FTA) with India after nine months of negotiations.</li><li>Within our research coverage, we view Scales Corporation (SCL) as the most positively exposed to this agreement, both near term and long term.</li><li>The benefits to other exporters within our coverage (The a2 Milk Company [ATM], Port of Tauranga [POT], Napier Port [NPH], Skellerup [SKL], Sanford [SAN], and Synlait Milk [SML]) are relatively immaterial today (varies by company), but the FTA is still a small positive, particularly for medium to long-term growth potential.</li></ul>

On 22 December 2025, NZ signed a free trade agreement (FTA) with India after nine months of negotiations.Within our research coverage, we view Scales Corporation (SCL) as the most positively exposed to this agreement, both near term and long term.The benefits to other exporters within our coverage (The a2 Milk Company [ATM], Port of Tauranga [POT], Napier Port [NPH], Skellerup [SKL], Sanford [SAN], and Synlait Milk [SML]) are relatively immaterial today (varies by company), but the FTA is still a small positive, particularly for medium to long-term growth potential.

Equity Strategy NZ–India FTA — An Early Christmas Present

New Zealand

Synlait Milk Ltd is a milk production company.  The Company produces, processes, markets and distributes milk, milk powder products and ingredients.

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Synlait Milk (SML NZ)

The A2 Milk Company A Perfect Storm

The a2 Milk Company (ATM) has downgraded its FY26 guidance due to supply chain issues. A return to its recent elevated multiple is only likely...

Forsyth Barr

Company Coverage Temporary Coverage Changes

We make a number of temporary changes to our company coverage responsibilities with immediate effect due to Matt Montgomerie's period of...

Forsyth Barr

The A2 Milk Company A More Balanced Formula—Up To NEUTRAL

Our change in view reflects two factors: (1) notable valuation multiple de-rating from when we downgraded to UNDERPERFORM in September 2025...

Forsyth Barr

The A2 Milk Company Infant Formula Recall What We Know So Far

Our broad thoughts at this stage are: (1) we think The a2 Milk Company (ATM) is in the clear from any negative impacts, although we recognise why...

Forsyth Barr

Equity Strategy NZ–India FTA — An Early Christmas Present

Within our research coverage, we view Scales Corporation (SCL) as the most positively exposed to this agreement, both near term and long term.

Forsyth Barr

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