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

<ul><li>Mercury (MCY) has upgraded FY23 hydro generation expectations +150GWh (+3.4%), leading to a +NZ$40m FY23 normalised EBITDAF guidance upgrade to NZ$795m</li><li>Consolidated retail highlights step change taking place in MCY's business</li><li>Forecast changes positive, but interest rate rises present valuation headwinds</li></ul>

Mercury (MCY) has upgraded FY23 hydro generation expectations +150GWh (+3.4%), leading to a +NZ$40m FY23 normalised EBITDAF guidance upgrade to NZ$795mConsolidated retail highlights step change taking place in MCY's businessForecast changes positive, but interest rate rises present valuation headwinds

Thematic (Sector/Industry)

<ul><li>First trading of 2026 ASX futures shows only a small decline from 2025 prices</li><li>Cold snap at the beginning of September 2022 highlights the need for gas-peaking plant</li><li>If the fixed interest market is right, electricity stocks are expensive</li></ul>

First trading of 2026 ASX futures shows only a small decline from 2025 pricesCold snap at the beginning of September 2022 highlights the need for gas-peaking plantIf the fixed interest market is right, electricity stocks are expensive

Power Points: Wild Wholesale Price Ride — October 2022

<div><ul><li>Locking in a bigger option but at a relatively higher price: Consents on Kaiwera Downs were due to lapse in 2023, so MCY's decision to build Kaiwera Downs locks in the option to build the larger stage two (200MW)</li><li>Development indicates MCY is confident South Island demand will remain</li><li>Forecast changes brings forward Kaiwera Downs and lifts medium-term wholesale electricity price assumptions</li></ul></div>

Locking in a bigger option but at a relatively higher price: Consents on Kaiwera Downs were due to lapse in 2023, so MCY's decision to build Kaiwera Downs locks in the option to build the larger stage two (200MW)Development indicates MCY is confident South Island demand will remainForecast changes brings forward Kaiwera Downs and lifts medium-term wholesale electricity price assumptions

<ul><li>Electricity share prices have not responded to lift in interest rates: The 10-year swap rate is back above 4.0%, ending August at 4.1% and is currently 4.3%</li><li>August 2022 rounded off a wet winter, bigger development pipelines revealed</li><li>New GNE market security option (MSO) unlikely to excite the market, but may lift peak wholesale electricity prices</li></ul>

Electricity share prices have not responded to lift in interest rates: The 10-year swap rate is back above 4.0%, ending August at 4.1% and is currently 4.3%August 2022 rounded off a wet winter, bigger development pipelines revealedNew GNE market security option (MSO) unlikely to excite the market, but may lift peak wholesale electricity prices

Power Points: Lakes and Valuations Full— September 2022

<ul><li>Softer guidance causes target price and rating downgrade</li><li>FY22 result is messy as expected but underlying EBITDAF in line with expectations</li><li>FY23 will see a big step change in earnings (just not as much as hoped)</li></ul>

Softer guidance causes target price and rating downgradeFY22 result is messy as expected but underlying EBITDAF in line with expectationsFY23 will see a big step change in earnings (just not as much as hoped)

Mercury: Smaller Step Change than Hoped — FY22 Result

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Mercury NZ Ltd (MCY NZ)

Mercury: When It Rains It Pours — 1Q23

Mercury (MCY) has upgraded FY23 hydro generation expectations +150GWh (+3.4%), leading to a +NZ$40m FY23 normalised EBITDAF guidance upgrade to...

Forsyth Barr

Power Points: Wild Wholesale Price Ride — October 2022

The cold snap in early September 2022 resulted in wild wholesale electricity price fluctuations, highlighting the market would benefit from more...

Forsyth Barr

Mercury: Winding Up Kaiwera Downs

Mercury's (MCY) announcement that it is building stage one of its Kaiwera Downs wind farm in Southland was expected, albeit it has come a little...

Forsyth Barr

Power Points: Lakes and Valuations Full— September 2022

The big wet hit August 2022, resulting in hydro storage hitting an all time high (170% of average) for this time of year, which in turn suppressed...

Forsyth Barr

Mercury: Smaller Step Change than Hoped — FY22 Result

Whilst Mercury is delivering the expected step-change in earnings and dividend, FY23 guidance is below where we had hoped

Forsyth Barr

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)