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>December rounded out 2022 with another month of high renewable electricity generation (96%) and low wholesale electricity prices (Otahuhu [OTA] prices averaged just NZ$19/MWh) with North Island hydro generator’s Mercury (MCY) and Genesis Energy (GNE) having the best of the conditions</li><li>Looking ahead to 2023, we expect many of the themes that dominated 2022 to continue, with a key focus on new developments</li><li>We see share price risks to the downside, with the electricity sector’s defensive characteristics less beneficial during a market recovery</li></ul>

December rounded out 2022 with another month of high renewable electricity generation (96%) and low wholesale electricity prices (Otahuhu [OTA] prices averaged just NZ$19/MWh) with North Island hydro generator’s Mercury (MCY) and Genesis Energy (GNE) having the best of the conditionsLooking ahead to 2023, we expect many of the themes that dominated 2022 to continue, with a key focus on new developmentsWe see share price risks to the downside, with the electricity sector’s defensive characteristics less beneficial during a market recovery

Power Points: Looking Ahead to 2023 — January 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>’s exclusivity agreement with Brookfield/EIG expired on 24 January. Brookfield/EIG is reportedly continuing its due diligence on its A$9.00 per share offer.</li>
<li>Time often kills deals. There is speculation that recent price caps would result in Brookfield/EIG walking away or trying to recut the deal terms. ACCC approval is also an overhang.</li>
<li>Peers' share prices have risen despite the price cap which weakens the case for a recut to the deal terms. Brookfield/EIG clearly want Origin as it twice bid against itself. </li>
</ul>



Origin Energy (ORG AU)’s exclusivity agreement with Brookfield/EIG expired on 24 January. Brookfield/EIG is reportedly continuing its due diligence on its A$9.00 per share offer.
Time often kills deals. There is speculation that recent price caps would result in Brookfield/EIG walking away or trying to recut the deal terms. ACCC approval is also an overhang.
Peers' share prices have risen despite the price cap which weakens the case for a recut to the deal terms. Brookfield/EIG clearly want Origin as it twice bid against itself. 


Origin Energy (ORG AU): Risk/Reward Profile

<ul><li>Unit 5 maintenance and hydro combine to push renewable generation to fresh highs</li><li>Valuations ease, but sector remains over-valued</li><li>Wind turbine demand softens in the face of rising prices, leaving window of opportunity for NZ developers</li></ul>

Unit 5 maintenance and hydro combine to push renewable generation to fresh highsValuations ease, but sector remains over-valuedWind turbine demand softens in the face of rising prices, leaving window of opportunity for NZ developers

Power Points: Record Renewables — December 2022

<ul><li>Whilst NZAS will have to pay more for its electricity it is compensated by strong aluminium prices</li><li>MEL is in the box seat to supply less, with CEN, MCY and MNW to supply more</li><li>Big earnings uplift for MEL from CY2025, CEN and MNW an earnings hit, MCY a negative value impact</li></ul>

Whilst NZAS will have to pay more for its electricity it is compensated by strong aluminium pricesMEL is in the box seat to supply less, with CEN, MCY and MNW to supply moreBig earnings uplift for MEL from CY2025, CEN and MNW an earnings hit, MCY a negative value impact

Electricity Sector: NZAS Set to Stay, But Will Have to Pay

<ul><li>October 2022 was a repeat of recent months, with continued strong North Island hydro generation, low wholesale electricity spot prices, and rising interest rates continuing to squeeze sector valuations</li><li>Wholesale market conditions again favour North Island generators</li><li>Wholesale market conditions again favour North Island generators</li></ul>

October 2022 was a repeat of recent months, with continued strong North Island hydro generation, low wholesale electricity spot prices, and rising interest rates continuing to squeeze sector valuationsWholesale market conditions again favour North Island generatorsWholesale market conditions again favour North Island generators

Power Points: Wind Blows, Hydro Flows — November 2022

New Zealand

Mercury NZ Ltd provides utility services. The Company generates and supplies electricity from hydro, geothermal, gas-fired, and wind power stations, as well as owns and manages bio-energy power plants. Mighty River Power serves customers throughout New Zealand.

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Mercury NZ Ltd (MCY NZ)

Power Points: Looking Ahead to 2023 — January 2023

December rounded out 2022 with another month of high renewable electricity generation (96%) and low wholesale electricity prices (Otahuhu [OTA]...

Forsyth Barr

Origin Energy (ORG AU): Risk/Reward Profile

The risk-reward profile is favourable as the downside due to a deal break (-11% estimated decline) is lower than the upside (+23%) to the...

Arun George

Power Points: Record Renewables — December 2022

The story of November 2022 was the record high 97% of electricity generation coming from renewable sources, well north of the previous record of...

Forsyth Barr

Electricity Sector: NZAS Set to Stay, But Will Have to Pay

NZAS is set to remain open as the focus on decarbonisation means the economics of hydro-backed aluminium smelters have never looked better; We have...

Forsyth Barr

Power Points: Wind Blows, Hydro Flows — November 2022

October 2022 was a repeat of recent months, with continued strong North Island hydro generation, low wholesale electricity spot prices, and rising...

Forsyth Barr

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