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>April 2023 saw continued strong hydro generation (particularly North Island), and a return to more favourable conditions for Meridian Energy (MEL).</li><li>Whilst ASX futures remain stubbornly high, there are further signs new generation costs are falling with the recent NSW tender resulting in a solar price below A$35/MWh and wind below A$50/MWh. </li><li>With an additional +661MW/+1,890GWh (+4%) added to the development pipeline, and thermal generation costs off their peaks, we see downward pressure on the futures curve — which is positive from a political/regulatory perspective, albeit not from a long-term earnings perspective.</li></ul>

April 2023 saw continued strong hydro generation (particularly North Island), and a return to more favourable conditions for Meridian Energy (MEL).Whilst ASX futures remain stubbornly high, there are further signs new generation costs are falling with the recent NSW tender resulting in a solar price below A$35/MWh and wind below A$50/MWh. With an additional +661MW/+1,890GWh (+4%) added to the development pipeline, and thermal generation costs off their peaks, we see downward pressure on the futures curve — which is positive from a political/regulatory perspective, albeit not from a long-term earnings perspective.

Power Points: Futures Pressure Downwards — May 2023

<ul><li>Wholesale prices hold up despite strong hydro storage position and falling thermal generation costs</li><li>Generation development pipeline lifts again with MCY joining the early stage announcement game</li><li>Project Onslow rumbles on and carbon market working out what happens next</li></ul>

Wholesale prices hold up despite strong hydro storage position and falling thermal generation costsGeneration development pipeline lifts again with MCY joining the early stage announcement gameProject Onslow rumbles on and carbon market working out what happens next

Power Points: Carbon Uncertainty — April 2023

<ul><li>Development pipeline goes to the next level: the headline sector generation development pipeline increased +8.2TWh (+38%) in February 2023, mainly due to MEL revealing a big increase in early stage options</li><li>1H23 results deliver strong earnings growth as expected, dividend growth more muted</li><li>Operating conditions continue to favour North Island hydro generators: February 2023 North Island hydro generation was +47% above average, a continuation of recent trends</li></ul>

Development pipeline goes to the next level: the headline sector generation development pipeline increased +8.2TWh (+38%) in February 2023, mainly due to MEL revealing a big increase in early stage options1H23 results deliver strong earnings growth as expected, dividend growth more mutedOperating conditions continue to favour North Island hydro generators: February 2023 North Island hydro generation was +47% above average, a continuation of recent trends

Power Points: Developing Overbuild Risk — March 2023

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a> has disclosed a revised non-binding proposal from Brookfield/EIG. The headline price has been lowered by -1.1% from A$9.00 to A$8.90 per share.</li>
<li>Under the revised proposal, shareholders’ first 100,000 shares get A$8.90. Beyond that ownership, the offer is A$4.334 plus US$3.194 per share (currently worth A$8.99 per share). </li>
<li>While the recut introduces FX rate risk, the average implied value is A$9.01 since 10 November. Both the offeror and the Board seem keen to get a binding offer.</li>
</ul>



Origin Energy (ORG AU) has disclosed a revised non-binding proposal from Brookfield/EIG. The headline price has been lowered by -1.1% from A$9.00 to A$8.90 per share.
Under the revised proposal, shareholders’ first 100,000 shares get A$8.90. Beyond that ownership, the offer is A$4.334 plus US$3.194 per share (currently worth A$8.99 per share). 
While the recut introduces FX rate risk, the average implied value is A$9.01 since 10 November. Both the offeror and the Board seem keen to get a binding offer.


Origin Energy (ORG AU): Recut Deal Is a Win-Win

Equity Bottom-Up

<ul><li>Contact Energy (CEN) delivered a 1H23 result well down on 1H22, but in line with expectations</li><li>CEN also released a soft January 2023 operating result of NZ$30m, the lowest January in the past nine years, although it was impacted by trading losses</li><li>CEN is on the cusp of delivering strong earnings momentum, albeit that requires a turnaround in recent operating statistics</li></ul>

Contact Energy (CEN) delivered a 1H23 result well down on 1H22, but in line with expectationsCEN also released a soft January 2023 operating result of NZ$30m, the lowest January in the past nine years, although it was impacted by trading lossesCEN is on the cusp of delivering strong earnings momentum, albeit that requires a turnaround in recent operating statistics

Contact Energy: Turning for Home With the Wind in Its Sales

New Zealand

Contact Energy Limited is a diversified and integrated energy company which focuses on the generation of electricity and the sale of electricity and gas in New Zealand.

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Contact Energy (CEN NZ)

Power Points: Futures Pressure Downwards — May 2023

April 2023 saw continued strong hydro generation (particularly North Island), and a return to more favourable conditions for Meridian Energy (MEL);...

Forsyth Barr

Power Points: Carbon Uncertainty — April 2023

March 2023 was dominated by the Government pressing ahead with Project Onslow (despite costs almost quadrupling) and the failure of the carbon...

Forsyth Barr

Power Points: Developing Overbuild Risk — March 2023

February 2023 was again characterised by high North Island hydro generation, which is good news for Genesis Energy (GNE) and Mercury (MCY), but the...

Forsyth Barr

Origin Energy (ORG AU): Recut Deal Is a Win-Win

The revised terms imply a modest deal cut and acceptable FX rate risk. Expect a binding offer soon. Regulatory risks will be the key overhang.

Arun George

Contact Energy: Turning for Home With the Wind in Its Sales

Contact Energy (CEN) delivered a 1H23 result well down on 1H22, but in line with expectations; CEN also released a soft January 2023 operating...

Forsyth Barr

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