New Zealand Professional Investment Services Firm

Forsyth Barr

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.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<ul><li>We upgrade Vector (VCT) to OUTPERFORM from NEUTRAL on strong near-term earnings growth and a lift in our long-term earnings assumptions, raising the target price by +30cps (+7.1%) to NZ$4.52.</li><li>Vector is expected to fund more growth capex internally, reducing capital contribution levels, which will enhance the regulatory asset base and earnings over time.</li><li>Concerns are rising regarding the risk of stranded gas assets, although gas makes up a smaller portion of VCT's regulatory asset base compared to electricity.</li></ul>

We upgrade Vector (VCT) to OUTPERFORM from NEUTRAL on strong near-term earnings growth and a lift in our long-term earnings assumptions, raising the target price by +30cps (+7.1%) to NZ$4.52.Vector is expected to fund more growth capex internally, reducing capital contribution levels, which will enhance the regulatory asset base and earnings over time.Concerns are rising regarding the risk of stranded gas assets, although gas makes up a smaller portion of VCT's regulatory asset base compared to electricity.

Vector Ltd

Vector Two Steps Forward, One Step Back