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>For the first time in three years we are moving our WACC assumptions down.</li><li>This is driven by a modestly lower (-25 bps) interpolated 10-year interest rate assumption; our proxy for the risk free rate.</li><li>We also incorporate our C&amp;ESG ratings into our WACC assumptions. We do this on an overall neutral basis, with a scale of -25 bps to +25 bps added to the cost of equity. </li></ul>

For the first time in three years we are moving our WACC assumptions down.This is driven by a modestly lower (-25 bps) interpolated 10-year interest rate assumption; our proxy for the risk free rate.We also incorporate our C&amp;ESG ratings into our WACC assumptions. We do this on an overall neutral basis, with a scale of -25 bps to +25 bps added to the cost of equity. 

Equity Strategy - WACC Review; a Lower Rfr and Adding C&ESG

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

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gentrack-group-ltd" target="_blank" data-smartkarma-citation="entities:2752:1" rel="noopener">Gentrack (GTK NZ)</a> and <a href="https://www.smartkarma.com/entities/dorchester-pacific-ltd" target="_blank" data-smartkarma-citation="entities:1854:1" rel="noopener">Turners Automotive (TRA NZ)</a> will be added to the S&amp;P/NZX 50 Index while <a href="https://www.smartkarma.com/entities/synlait-milk-ltd" target="_blank" data-smartkarma-citation="entities:16298:1" rel="noopener">Synlait Milk (SML NZ)</a> and <a href="https://www.smartkarma.com/entities/pacific-edge-ltd" target="_blank" data-smartkarma-citation="entities:20261:1" rel="noopener">Pacific Edge (PEB NZ)</a> will be deleted.</li>
<li>There is a lot to trade on the stocks. The impact in terms of days of ADV appears high but historically there has been volume on implementation date.</li>
<li>The adds have jumped recently and there will be pre-positioning on the stocks. Not so much on the deletes.</li>
</ul>



Gentrack (GTK NZ) and Turners Automotive (TRA NZ) will be added to the S&amp;P/NZX 50 Index while Synlait Milk (SML NZ) and Pacific Edge (PEB NZ) will be deleted.
There is a lot to trade on the stocks. The impact in terms of days of ADV appears high but historically there has been volume on implementation date.
The adds have jumped recently and there will be pre-positioning on the stocks. Not so much on the deletes.


S&P/NZX 50 Index Rebalance: Two High Impact Changes Coming Up

Equity Bottom-Up

Fisher & Paykel Healthcare Corp / Equity Bottom-Up

<ul><li>F&amp;P Healthcare's (FPH) FY23 result provided a good reality check on trends and outlook in a post COVID-19 world</li><li>While lowered near/medium-term gross margin guidance was disappointing, the key message was the slight tempering of new apps consumables revenue expectations.</li><li>While we forecast strong new apps growth (+15–20%), as evidenced by recent trends and FY24 outlook, we consider it unlikely FPH is able to deliver sustained above-trend (&gt;+20%) growth post-COVID unless investment (SG&amp;A/R&amp;D and capex) is ahead of current expectations.</li></ul>

F&amp;P Healthcare's (FPH) FY23 result provided a good reality check on trends and outlook in a post COVID-19 worldWhile lowered near/medium-term gross margin guidance was disappointing, the key message was the slight tempering of new apps consumables revenue expectations.While we forecast strong new apps growth (+15–20%), as evidenced by recent trends and FY24 outlook, we consider it unlikely FPH is able to deliver sustained above-trend (&gt;+20%) growth post-COVID unless investment (SG&amp;A/R&amp;D and capex) is ahead of current expectations.

F&P Healthcare: FY23 Result — Reality Check

<ul><li>F&amp;P Healthcare (FPH) reported a FY23 result below our expectations with NPAT of NZ$250m versus our NZ$265m and consensus of NZ$253m.</li><li>Revenue of NZ$1,581m (FB; NZ$1,588m, consensus; NZ$1,575m) was slightly ahead of the midpoint of January 2023 guidance of NZ$1,550m-1,600m albeit the mix is unfavourable with weaker hospital consumables relative to expectations.</li><li>Gross margins (59.4%) were slightly below our and consensus expectations (~60%) while SG&amp;A incl D&amp;A (NZ$606.2m) was below our expectations (NZ$618m) driven by lower D&amp;A.</li></ul>

F&amp;P Healthcare (FPH) reported a FY23 result below our expectations with NPAT of NZ$250m versus our NZ$265m and consensus of NZ$253m.Revenue of NZ$1,581m (FB; NZ$1,588m, consensus; NZ$1,575m) was slightly ahead of the midpoint of January 2023 guidance of NZ$1,550m-1,600m albeit the mix is unfavourable with weaker hospital consumables relative to expectations.Gross margins (59.4%) were slightly below our and consensus expectations (~60%) while SG&amp;A incl D&amp;A (NZ$606.2m) was below our expectations (NZ$618m) driven by lower D&amp;A.

F&P Healthcare (FPH): FY23 Result – Initial Impressions

<ul><li>April 2023 respiratory export data shows a slow start to FY24, down -7% YoY (cycling a weak comparable).</li><li>On a three month rolling basis, respiratory exports are only up +3% YoY despite April 2022 being near the three month rolling floor post the Omicron inventory unwind in 2022 (March 2022 was the weakest three month rolling comparable).</li><li>While April is typically a seasonally weak month (particularly to North America), recent trends continue to show a relatively subdued recovery in exports following the strong Asia Pacific (COVID-19 driven) and Northern Hemisphere (abnormally strong flu/RSV season) demand trends in late 4Q CY23.</li></ul>

April 2023 respiratory export data shows a slow start to FY24, down -7% YoY (cycling a weak comparable).On a three month rolling basis, respiratory exports are only up +3% YoY despite April 2022 being near the three month rolling floor post the Omicron inventory unwind in 2022 (March 2022 was the weakest three month rolling comparable).While April is typically a seasonally weak month (particularly to North America), recent trends continue to show a relatively subdued recovery in exports following the strong Asia Pacific (COVID-19 driven) and Northern Hemisphere (abnormally strong flu/RSV season) demand trends in late 4Q CY23.

F&P Healthcare (FPH): April Revenue Proxy – Slow Start to FY24

New Zealand

Fisher & Paykel Healthcare Corporation Limited designs, manufactures and markets heated humidification products and systems for use in respiratory care and the treatment of sleep apnea.  The Company also offers patient warming and neonatal care products, including warming products and infant resuscitators.

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Fisher & Paykel Healthcare Corp (FPH NZ)

Equity Strategy - WACC Review; a Lower Rfr and Adding C&ESG

For the first time in three years we are moving our WACC assumptions down. This is driven by a modestly lower (-25 bps) interpolated 10-year...

Forsyth Barr

S&P/NZX 50 Index Rebalance: Two High Impact Changes Coming Up

As expected, Gentrack and Turners Auto will replace Synlait Milk and Pacific Edge in the NZX50 Index. The adds have jumped recently and there...

Brian Freitas

F&P Healthcare: FY23 Result — Reality Check

F&P Healthcare's (FPH) FY23 result provided a good reality check on trends and outlook in a post COVID-19 world; While lowered near/medium-term...

Forsyth Barr

F&P Healthcare (FPH): FY23 Result – Initial Impressions

F&P Healthcare (FPH) reported a FY23 result below our expectations with NPAT of NZ$250m versus our NZ$265m and consensus of NZ$253m; FPH is also...

Forsyth Barr

F&P Healthcare (FPH): April Revenue Proxy – Slow Start to FY24

April 2023 respiratory export data shows a slow start to FY24, down -7% YoY (cycling a weak comparable); On a three month rolling basis,...

Forsyth Barr

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