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

Fisher & Paykel Healthcare Corp / Equity Bottom-Up

<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

<ul><li>We expect F&amp;P Healthcare's (FPH) FY23 result to show a strong second half, aided by abnormally strong revenue benefits (flu season and China COVID demand).</li><li>Following recent competitor results and data releases, we see a low likelihood of a material beat relative to expectations.</li><li>Key focus areas are (1) new apps consumables revenue and outlook, (2) gross margin guidance (consensus appears pessimistic), and (3) SG&amp;A outlook (we see the potential for a catch-up in FY24).</li></ul>

We expect F&amp;P Healthcare's (FPH) FY23 result to show a strong second half, aided by abnormally strong revenue benefits (flu season and China COVID demand).Following recent competitor results and data releases, we see a low likelihood of a material beat relative to expectations.Key focus areas are (1) new apps consumables revenue and outlook, (2) gross margin guidance (consensus appears pessimistic), and (3) SG&amp;A outlook (we see the potential for a catch-up in FY24).

F&P Healthcare: FY23 Preview — Limited Breathing Room

<ul><li>Heading into F&amp;P Healthcare's (FPH) FY23 result on Friday 26 May, we maintain our UNDERPERFORM rating.</li><li>FPH's share price has continued to increase since its January 2023 guidance upgrade as its PE expands (from an already high base) suggesting to us the market views further earnings upgrades are likely.</li><li>Following recent competitor results and data releases, we think it is unlikely FPH upgrades its FY23 revenue guidance (NZ$1,550–1,600m).</li></ul>

Heading into F&amp;P Healthcare's (FPH) FY23 result on Friday 26 May, we maintain our UNDERPERFORM rating.FPH's share price has continued to increase since its January 2023 guidance upgrade as its PE expands (from an already high base) suggesting to us the market views further earnings upgrades are likely.Following recent competitor results and data releases, we think it is unlikely FPH upgrades its FY23 revenue guidance (NZ$1,550–1,600m).

F&P Healthcare: Checking the Flow — Limited Breathing Room

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>Our 2023 outlook, initially discussed in our January 6th 2023 Int'l Compass, was for $93 to cap upside on the MSCI ACWI (ACWI-US); this has again proven prescient.</li>
<li>Since late-January/early-February we have recommended shifting to defensives, and MSCI ACWI defensive Sectors including Health Care (IXJ-US), Utilities (JXI-US), and Consumer Staples (KXI-US) are now hitting 3-4-month RS highs.</li>
<li>With the ACWI-US just now starting to turn down after testing $93, we continue to recommend a tactical overweight to the aforementioned defensive Sectors, and also to gold miners (GDX-US).</li>
</ul>


Our 2023 outlook, initially discussed in our January 6th 2023 Int'l Compass, was for $93 to cap upside on the MSCI ACWI (ACWI-US); this has again proven prescient.
Since late-January/early-February we have recommended shifting to defensives, and MSCI ACWI defensive Sectors including Health Care (IXJ-US), Utilities (JXI-US), and Consumer Staples (KXI-US) are now hitting 3-4-month RS highs.
With the ACWI-US just now starting to turn down after testing $93, we continue to recommend a tactical overweight to the aforementioned defensive Sectors, and also to gold miners (GDX-US).


Stay Tactically Overweight Defensives; Remain Overweight Europe, Japan, & EAFE. Buys in Defensives

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 Cor (FPH AU)

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

F&P Healthcare: FY23 Preview — Limited Breathing Room

We expect F&P Healthcare's (FPH) FY23 result to show a strong second half, aided by abnormally strong revenue benefits (flu season and China COVID...

Forsyth Barr

F&P Healthcare: Checking the Flow — Limited Breathing Room

FPH's share price has continued to increase since its January 2023 guidance upgrade as its PE expands (from an already high base) suggesting to us...

Forsyth Barr

Stay Tactically Overweight Defensives; Remain Overweight Europe, Japan, & EAFE. Buys in Defensives

$93 on $ACWI continues to be a key resistance that we have discussed since early-Jan as capping upside for 2023. Stick with defensives $IXJ $XLV...

Vermilion Research

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