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>Soft end to FY23 driven by NZ: VSL downgraded its EBITDA/NPAT guidance range by -7%/-14% at the mid-point largely due to a decline in NZ activity particularly in the Steel division.</li><li>Working capital normalising and net debt reducing: VSL had been carrying elevated inventory and debt due to the Ullrich Aluminium acquisition and high steel prices. </li><li>Increased near-term macro uncertainty but some internal offsets: Forward indicators of NZ activity remain soft and the upcoming election creates additional near-term demand uncertainty. </li></ul>

Soft end to FY23 driven by NZ: VSL downgraded its EBITDA/NPAT guidance range by -7%/-14% at the mid-point largely due to a decline in NZ activity particularly in the Steel division.Working capital normalising and net debt reducing: VSL had been carrying elevated inventory and debt due to the Ullrich Aluminium acquisition and high steel prices. Increased near-term macro uncertainty but some internal offsets: Forward indicators of NZ activity remain soft and the upcoming election creates additional near-term demand uncertainty. 

Vulcan Steel: Near-Term Uncertainty in the Pipe

<ul><li>Vulcan Steel (VSL) reported 1H23 EBITDA/NPAT of NZ$115m/$54m in line with our expectations</li><li>The recently acquired Ullrich contributed NZ$23m EBITDA in 1H23 which suggests trading c.10% above the acquisition run-rates and well ahead of the NZ$25-27m prior FY23 guidance.</li><li>VSL’s FY23 EBITDA guidance was lowered at the top end to NZ$215-230m (was NZ$215-235m, ForBar $239m) while NPAT lifted slightly to NZ$95-109m (NZ$93-107m, ForBar NZ$116m).</li></ul>

Vulcan Steel (VSL) reported 1H23 EBITDA/NPAT of NZ$115m/$54m in line with our expectationsThe recently acquired Ullrich contributed NZ$23m EBITDA in 1H23 which suggests trading c.10% above the acquisition run-rates and well ahead of the NZ$25-27m prior FY23 guidance.VSL’s FY23 EBITDA guidance was lowered at the top end to NZ$215-230m (was NZ$215-235m, ForBar $239m) while NPAT lifted slightly to NZ$95-109m (NZ$93-107m, ForBar NZ$116m).

Vulcan Steel: 1H23 Result – First Impressions

<ul><li>Lower volumes offset by better dollar margins and Ullrich: 1H23 EBITDA was -2% on the prior year to NZ$115m and underlying NPAT was -22% to NZ$54m</li><li>Debt and inventory remain high, operating cash flow modest</li><li>Guidance broadly unchanged but the mix is</li></ul>

Lower volumes offset by better dollar margins and Ullrich: 1H23 EBITDA was -2% on the prior year to NZ$115m and underlying NPAT was -22% to NZ$54mDebt and inventory remain high, operating cash flow modestGuidance broadly unchanged but the mix is

Vulcan Steel: 1H23 Result — In Its New Element

Thematic (Sector/Industry)

<ul><li>The RBNZ has done its best to make sure none of us approach 2023 with any illusions of good times ahead</li><li>Mortgage rates have hit a 10 year high, inflation is expected to remain stubbornly elevated, and the icing on RBNZ's economic cake is its forecast of four quarters of declining GDP</li><li>When choosing our five stocks to watch we have leaned on companies with the majority of their exposure overseas (Infratil [IFT], Vulcan Steel [VSL], KMD Brands [KMD]) or with attractive valuations (Oceania Healthcare [OCA], SkyCity [SKC]) where we think that the bad news is firmly in the price</li></ul>

The RBNZ has done its best to make sure none of us approach 2023 with any illusions of good times aheadMortgage rates have hit a 10 year high, inflation is expected to remain stubbornly elevated, and the icing on RBNZ's economic cake is its forecast of four quarters of declining GDPWhen choosing our five stocks to watch we have leaned on companies with the majority of their exposure overseas (Infratil [IFT], Vulcan Steel [VSL], KMD Brands [KMD]) or with attractive valuations (Oceania Healthcare [OCA], SkyCity [SKC]) where we think that the bad news is firmly in the price

Equity Strategy - The Year Ahead: Five Themes and Five Stocks

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

Haidilao International Holding / Index Rebalance

<ul>
<li>It was a busy Friday with the implementation of the December rebalance for multiple indices. The Yuanta/P-shares Taiwan Dividend Plus ETF will continue to rebalance over the next 4 days.</li>
<li>The coming week should be relatively quiet with the announcement of the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> changes expected.</li>
<li>There were large inflows to ETFs focused on China, Korea, Japan, Taiwan. There were inflows to <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index-etf" target="_blank" data-smartkarma-citation="entities:25:1" rel="noopener">Hang Seng H Share Index ETF</a> and outflows from <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of Hong Kong</a>.</li>
</ul>


It was a busy Friday with the implementation of the December rebalance for multiple indices. The Yuanta/P-shares Taiwan Dividend Plus ETF will continue to rebalance over the next 4 days.
The coming week should be relatively quiet with the announcement of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) changes expected.
There were large inflows to ETFs focused on China, Korea, Japan, Taiwan. There were inflows to Hang Seng H Share Index ETF and outflows from Tracker Fund of Hong Kong.


Index Rebalance & ETF Flow Recap: S&P/ASX, HSCEI, HSTECH, Haidilao/Super Hi, CSI REIT

New Zealand

Vulcan Steel Ltd operates as a metals distributing and processing company. The Company offers stainless and engineering steel products. Vulcan Steel serves customers in Australia and New Zealand.

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Vulcan Steel Limited (VSL NZ)

Vulcan Steel: Near-Term Uncertainty in the Pipe

Vulcan Steel (VSL) has lowered its FY23 earnings guidance due to further weakness in NZ and higher Ullrich integration costs; Whilst VSL has a...

Forsyth Barr

Vulcan Steel: 1H23 Result – First Impressions

Vulcan Steel (VSL) reported 1H23 EBITDA/NPAT of NZ$115m/$54m in line with our expectations; the recently acquired Ullrich contributed NZ$23m EBITDA...

Forsyth Barr

Vulcan Steel: 1H23 Result — In Its New Element

Vulcan Steel (VSL) reported 1H23 EBITDA -2% and NPAT -22% on the prior period, which is in line with our expectations; Lower volumes were offset by...

Forsyth Barr

Equity Strategy - The Year Ahead: Five Themes and Five Stocks

When choosing our five stocks to watch we have leaned on companies with the majority of their exposure overseas (Infratil [IFT], Vulcan...

Forsyth Barr

Index Rebalance & ETF Flow Recap: S&P/ASX, HSCEI, HSTECH, Haidilao/Super Hi, CSI REIT

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

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