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>A deteriorating economic backdrop is impacting demand for freight and passengers.</li><li>Imports into New Zealand have slumped over 2023 as supply chain destocking has compounded slowing domestic consumption.</li><li>The latter has softened demand across different transport modes. </li></ul>

A deteriorating economic backdrop is impacting demand for freight and passengers.Imports into New Zealand have slumped over 2023 as supply chain destocking has compounded slowing domestic consumption.The latter has softened demand across different transport modes. 

Transport Trends - Where's the Freight, Mate?

Equity Bottom-Up

<ul><li>The strong bounce in Air New Zealand's (AIR) post-COVID earnings is subsiding. FY24 earnings are likely to be materially lower than FY23.</li><li>The recent first time 1H24 earnings guidance points to margin decline driven by moderating yields, lower domestic load factors, higher fuel costs, and sustained labour inflation.</li><li>AIR refers to softening domestic demand, which we expect to seep into international over the course of FY24, given increasing competition and a weakening consumer backdrop. </li></ul>

The strong bounce in Air New Zealand's (AIR) post-COVID earnings is subsiding. FY24 earnings are likely to be materially lower than FY23.The recent first time 1H24 earnings guidance points to margin decline driven by moderating yields, lower domestic load factors, higher fuel costs, and sustained labour inflation.AIR refers to softening domestic demand, which we expect to seep into international over the course of FY24, given increasing competition and a weakening consumer backdrop. 

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>Temasek raised around US$300m via its secondary selldown in <a href="https://www.smartkarma.com/entities/singapore-airlines-ltd" target="_blank" data-smartkarma-citation="entities:74:1" rel="noopener">Singapore Airlines (SIA SP)</a> in Jun 2023. The lockup from that placement will expire soon.</li>
<li>Temasek still owns over 50% of SIA and hence, any selldown might not come before SIA reports its 1H23/24 results in mid-Nov 2023.</li>
<li>In this note, we talk about the placement lockup dynamics.</li>
</ul>


Temasek raised around US$300m via its secondary selldown in Singapore Airlines (SIA SP) in Jun 2023. The lockup from that placement will expire soon.
Temasek still owns over 50% of SIA and hence, any selldown might not come before SIA reports its 1H23/24 results in mid-Nov 2023.
In this note, we talk about the placement lockup dynamics.


SIA Placement Lockup - Time for Another Trim of Its US$7bn Stake

Equity Capital Markets

Auckland Intl Airport / Equity Capital Markets

<ul>
<li>Auckland City Council plans to sell around 4.5% of <a href="https://www.smartkarma.com/entities/auckland-intl-airport-ltd" target="_blank" data-smartkarma-citation="entities:597:1" rel="noopener">Auckland Intl Airport (AIA NZ)</a> to fund its budget requirements for 2023-24.</li>
<li>The deal is very well flagged with Auckland City Council having publicly stated their intention to sell 7% of the stock in Jun 2023.</li>
<li>In this note, we talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>


Auckland City Council plans to sell around 4.5% of Auckland Intl Airport (AIA NZ) to fund its budget requirements for 2023-24.
The deal is very well flagged with Auckland City Council having publicly stated their intention to sell 7% of the stock in Jun 2023.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.


Auckland Airport Placement - Well Flagged, LO Support but Still a Bit Tricky

<ul><li>Air New Zealand (AIR) reported a strong FY23 result, boosted by record passenger yields. It was far from a normal year, AIR fairly labels it an "extraordinary operating environment"; consequently, the result offers few signals as to profit levels for the year ahead.</li><li>The airline's financial backdrop is slowly moving towards the new norm where both costs and yields are materially higher than pre-COVID levels.</li><li>We expect this differential to allow AIR to generate an attractive ROIC in FY24, but lower than FY23, and heading back towards WACC over the medium-term. Trading at ~8x one year forward PE, AIR continues to trade at a material premium (~25%) to Tasman peer Qantas (QAN.AX). ​​​​​​​NEUTRAL.</li></ul>

Air New Zealand (AIR) reported a strong FY23 result, boosted by record passenger yields. It was far from a normal year, AIR fairly labels it an "extraordinary operating environment"; consequently, the result offers few signals as to profit levels for the year ahead.The airline's financial backdrop is slowly moving towards the new norm where both costs and yields are materially higher than pre-COVID levels.We expect this differential to allow AIR to generate an attractive ROIC in FY24, but lower than FY23, and heading back towards WACC over the medium-term. Trading at ~8x one year forward PE, AIR continues to trade at a material premium (~25%) to Tasman peer Qantas (QAN.AX). ​​​​​​​NEUTRAL.

Air New Zealand - FY23 — Steep Ascent, Descending to Lower Altitude

New Zealand

Air New Zealand Limited operates an airline business that provides international and domestic air passenger and cargo transport services throughout New Zealand and the South West Pacific. The Company also provides engineering and ground handling services.

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Air New Zealand (AIR NZ)

Transport Trends - Where's the Freight, Mate?

Imports into New Zealand have slumped over 2023 as supply chain destocking has compounded slowing domestic consumption. The latter has softened...

Forsyth Barr

Air New Zealand - Lower Flight Path

The strong bounce in Air New Zealand's (AIR) post-COVID earnings is subsiding. FY24 earnings are likely to be materially lower than FY23. The...

Forsyth Barr

SIA Placement Lockup - Time for Another Trim of Its US$7bn Stake

Temasek raised around US$300m via its secondary selldown in Singapore Airlines (SIA SP) in Jun 2023. The lockup from that placement will expire soon.

Sumeet Singh

Auckland Airport Placement - Well Flagged, LO Support but Still a Bit Tricky

Auckland City Council plans to sell around 4.5% of Auckland Intl Airport (AIA NZ) to fund its budget requirements for 2023-24. In this note, we...

Sumeet Singh

Air New Zealand - FY23 — Steep Ascent, Descending to Lower Altitude

The airline's financial backdrop is slowly moving towards the new norm where both costs and yields are materially higher than pre-COVID levels.

Forsyth Barr

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