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

Channel Infrastructure NZ Ltd / Equity Bottom-Up

<ul><li>Sale of old refining assets small positive with more to come: The probable sale of ex-refining assets at a price of US$33.9m (~NZ$54.6m) is ~+7cps higher than the book value of all of CHI's ex-refining assets, and there are more assets for sale.</li><li>Sustainable aviation fuel getting off the ground: In other encouraging news, CHI recently announced that Fortescue Future Industries (FFI) is progressing its hydrogen scoping study to a pre-feasibility study.</li><li>Revised electricity contract modestly higher than expected: In mid-June 2023, CHI announced it had signed a new six year renewable electricity supply contract commencing in FY24 for ~NZ$6m per annum. </li></ul>

Sale of old refining assets small positive with more to come: The probable sale of ex-refining assets at a price of US$33.9m (~NZ$54.6m) is ~+7cps higher than the book value of all of CHI's ex-refining assets, and there are more assets for sale.Sustainable aviation fuel getting off the ground: In other encouraging news, CHI recently announced that Fortescue Future Industries (FFI) is progressing its hydrogen scoping study to a pre-feasibility study.Revised electricity contract modestly higher than expected: In mid-June 2023, CHI announced it had signed a new six year renewable electricity supply contract commencing in FY24 for ~NZ$6m per annum. 

Channel Infrastructure: Scrap More Refined Than Expected

<ul><li>Producer price index (PPI) falling faster than expected, lowers FY24 expected PPI uplift</li><li>Jet volumes recovering faster and Auckland Airport confident of return to close to normal pax by year end</li><li>Government set to procure 70m litres of diesel storage, CHI remains well placed to secure a good contract</li></ul>

Producer price index (PPI) falling faster than expected, lowers FY24 expected PPI upliftJet volumes recovering faster and Auckland Airport confident of return to close to normal pax by year endGovernment set to procure 70m litres of diesel storage, CHI remains well placed to secure a good contract

<ul><li>Result a bit worse than expected, but FY23 outlook unchanged</li><li>Resumption of dividends as signalled and +0.5cps higher than forecast</li><li>Volumes recovering well and now expected to stay higher for longer, but variable price lower than previously forecast</li></ul>

Result a bit worse than expected, but FY23 outlook unchangedResumption of dividends as signalled and +0.5cps higher than forecastVolumes recovering well and now expected to stay higher for longer, but variable price lower than previously forecast

Channel Infrastructure: Volumes Jet Fuelled — FY22 Result

<ul><li>CHI has upgraded its FY23 revenue and EBITDA guidance +NZ$8.5m (+7%) and +NZ$4.0m (+5%) respectively at the midpoint of the guidance range</li><li>FY23 guidance upgrade due to strong PPI and new storage contract, partially offset by rising costs</li><li>Government decides to increase strategic reserve levels, CHI in pole position to provide most of the required storage</li></ul>

CHI has upgraded its FY23 revenue and EBITDA guidance +NZ$8.5m (+7%) and +NZ$4.0m (+5%) respectively at the midpoint of the guidance rangeFY23 guidance upgrade due to strong PPI and new storage contract, partially offset by rising costsGovernment decides to increase strategic reserve levels, CHI in pole position to provide most of the required storage

Channel Infrastructure: Producing Another Guidance Upgrade

<ul><li>High September 2022 CPI print points to strong PPI figure to be released in mid-November</li><li>3Q22 volumes suggest better 2023 volumes as jet continues to recover and conversion costs track below expectations</li><li>Modest earnings and target price upgrade with further upside potential</li></ul>

High September 2022 CPI print points to strong PPI figure to be released in mid-November3Q22 volumes suggest better 2023 volumes as jet continues to recover and conversion costs track below expectationsModest earnings and target price upgrade with further upside potential

Channel Infrastructure: Indexing an Earnings Upgrade

New Zealand

New Zealand Oil and Gas Limited produces crude oil and natural gas primarily through exploration in the Taranaki Basin of New Zealand.

Siamgas & Petrochemicals PCL distributes liquefied petroleum gas (LPG). The Company provides LPG, ammonia and other related petrochemical products such as propane, butane and propellant. Siamgas is also involved in the logistics services for LPG and petrochemical products.

Qinghai Jinrui Mineral Development Company Ltd. explores and develops strontium mines, as well as manufactures casting products.

Qinghai Jinrui Mineral Developmnt (600714 CH)

Hallador Energy Company processes, mines and sells coal to producers of electric power.  The Company also owns interests in an oil and gas company with operations in Michigan.

Sinopec Shandong Taishan Petroleum Co., Ltd. distributes gasoline, diesel oil, and kerosene throughout Shandong province. Through its subsidiaries. The Company also operates in real estate development.

PT Rukun Raharja Tbk operates transmission lines and distributes natural gas to industry.

SALA CORPORATION is a holding company which operates and manages its subsidiaries.  The Company provides energy supply and solution, and facility management services through its subsidiaries.  Other services include infrastructure development, animals' health care, auto services, and logistic business.

Bannerman Resources Ltd. explores for uranium in Australia and Africa.

Warrego Energy Limited operates as an oil and gas exploration company. The Company provides onshore oil and gas services. Warrego Energy serves customers in Western Australia, Spain, and Uruguay.

Ring Energy Inc is an independent oil and gas exploration company with headquarters in Midland, Texas. The Company's business strategy is focused on the exploration, development and acquisition of oil and natural gas properties in the Permian and Mid-Continent regions of the United States.

Hankook Shell Oil Co., Ltd. manufactures and markets lubricants, grease, and other petroleum products used for cars, vessels, industrial machinery, and cutting tools.  The Company exports its products to Southeast Asian countries, Russia, and China.  Hankook Shell is an affiliate of Royal Dutch Shell Group.

Channel Infrastructure NZ Limited operates a fuel infrastructure company. The Company owns and operates a petroleum pipeline from the refinery to a terminal at Marsden Point, in Northland. Channel Infrastructure produces motor gasoline, automotive and diesel fuels, aviation jet fuel, light and heavy fuel oils, and bitumen.

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Channel Infrastructure NZ Ltd (CHI NZ)

Channel Infrastructure: Scrap More Refined Than Expected

Channel Infrastructure (CHI) has likely sold refining assets from the hydrocracking complex for US$33.9m (~NZ$54.6m); It has sold an option to US...

Forsyth Barr

Channel Infrastructure: Channel Check

Mixed news since Channel Infrastucture's (CHI) FY22 result has combined to lower our target price -4cps (-2.5%) and pull back our rating to NEUTRAL...

Forsyth Barr

Channel Infrastructure: Volumes Jet Fuelled — FY22 Result

Channel Infrastructure (CHI) produced a FY22 result moderately lower than forecast, but it reinstated the dividend at a higher level than expected;...

Forsyth Barr

Channel Infrastructure: Producing Another Guidance Upgrade

The Producer Price Index (PPI) for the 12 months to September 2022 was 8.4%, in line with expectations and locks in a price increase of +6.3% from...

Forsyth Barr

Channel Infrastructure: Indexing an Earnings Upgrade

With CPI running higher than expected and Channel Infrastructure's (CHI) 3Q22 operating report indicating throughput volumes are recovering quickly...

Forsyth Barr

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