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>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

<ul><li>We upgrade our rating to NEUTRAL.</li><li>Synlait Milk (SML)’s FY25 result was the sideshow to the sale of its North Island assets to Abbott for NZ$307m.</li><li>We see this as a clear positive for two reasons: (1) removal of balance sheet risk (we estimate SML will be net cash at FY26); and (2) removal of material losses (FY25 EBIT losses of ~-NZ$20m versus total group EBIT of ~+NZ$50m).</li></ul>

We upgrade our rating to NEUTRAL.Synlait Milk (SML)’s FY25 result was the sideshow to the sale of its North Island assets to Abbott for NZ$307m.We see this as a clear positive for two reasons: (1) removal of balance sheet risk (we estimate SML will be net cash at FY26); and (2) removal of material losses (FY25 EBIT losses of ~-NZ$20m versus total group EBIT of ~+NZ$50m).

Synlait Milk FY25 Result—The Power of Deleverage

<ul><li>A solid 2H25 result from The a2 Milk Company (ATM) was the side event to the ‘a2 Pokeno’ acquisition.</li><li>ATM will acquire 100% of Yashili NZ for NZ$282m and has divested Mataura Valley Milk (MVM) for NZ$100m.</li><li>We view this as strategically and financially sound.</li></ul>

A solid 2H25 result from The a2 Milk Company (ATM) was the side event to the ‘a2 Pokeno’ acquisition.ATM will acquire 100% of Yashili NZ for NZ$282m and has divested Mataura Valley Milk (MVM) for NZ$100m.We view this as strategically and financially sound.

The A2 Milk Company FY25 Result—Milking The Margin

<ul><li>While Synlait Milk's (SML) EBITDA result was in line with the guidance provided in January, we think it is important to acknowledge it was a strong result in the circumstances (albeit cash flow and NPAT less so).</li><li>Advanced Nutritionals was the key driver, with strong margins supported by improved North Island and Dunsandel utilisation.</li><li>Looking ahead, SML delivered one of the more confusing guidance explanations we can recall. </li></ul>

While Synlait Milk's (SML) EBITDA result was in line with the guidance provided in January, we think it is important to acknowledge it was a strong result in the circumstances (albeit cash flow and NPAT less so).Advanced Nutritionals was the key driver, with strong margins supported by improved North Island and Dunsandel utilisation.Looking ahead, SML delivered one of the more confusing guidance explanations we can recall. 

Synlait Milk - 1H25 Result—Premature Celebrations?

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 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

Synlait Milk FY25 Result—The Power of Deleverage

We upgrade our rating to NEUTRAL. Synlait Milk (SML)’s FY25 result was the sideshow to the sale of its North Island assets to Abbott for NZ$307m.

Forsyth Barr

The A2 Milk Company FY25 Result—Milking The Margin

ATM will acquire 100% of Yashili NZ for NZ$282m and has divested Mataura Valley Milk (MVM) for NZ$100m. We view this as strategically and...

Forsyth Barr

Synlait Milk - 1H25 Result—Premature Celebrations?

While Synlait Milk's (SML) EBITDA result was in line with the guidance provided in January, we think it is important to acknowledge it was a strong...

Forsyth Barr

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