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

Channel Infrastructure NZ Ltd / Equity Bottom-Up

<ul><li>We reinstate our coverage of Channel Infrastructure (CHI) with an OUTPERFORM rating and a target price of NZ$2.13, both are upgrades from pre-equity raise.</li><li>CHI is uniquely placed to be the site for the development of sustainable aviation fuel (SAF) or other future fuels.</li><li>In our view, it is a matter of when, not if, a future fuels project chooses Marsden Point, given its natural advantages over greenfield alternatives. </li></ul>

We reinstate our coverage of Channel Infrastructure (CHI) with an OUTPERFORM rating and a target price of NZ$2.13, both are upgrades from pre-equity raise.CHI is uniquely placed to be the site for the development of sustainable aviation fuel (SAF) or other future fuels.In our view, it is a matter of when, not if, a future fuels project chooses Marsden Point, given its natural advantages over greenfield alternatives. 

Channel Infrastructure - It's a Matter of When, Not If

<ul><li>Channel Infrastructure (CHI) is raising ~NZ$50m through a 1 for 12.12 underwritten pro-rata accelerated renounceable entitlement offer.</li><li>The offer price is NZ$1.60, which is a -10.1% discount to the Friday, 22 November 2024 closing price, and -9.4% discount to the theoretical ex-rights price of NZ$1.77.</li><li>There are institutional and retail components to the capital raise. </li></ul>

Channel Infrastructure (CHI) is raising ~NZ$50m through a 1 for 12.12 underwritten pro-rata accelerated renounceable entitlement offer.The offer price is NZ$1.60, which is a -10.1% discount to the Friday, 22 November 2024 closing price, and -9.4% discount to the theoretical ex-rights price of NZ$1.77.There are institutional and retail components to the capital raise. 

Channel Infrastructure - Capitalising on Opportunity

<ul>
<li>One of the attractive aspects of Channel Infrastructure (CHI) as an investment is its exposure to the producer price index, (PPI) that has again exceeded expectations, resulting in a small increase in our FY25 forecast earnings.</li>
<li>Strong spot electricity and gas price rises over the past year have contributed a quarter of the PPI increase.</li>
<li>In addition, Auckland International Airport's (AIA) October 2024 operating metrics show modest growth on last year, albeit still well below pre-COVID. </li>
</ul>


One of the attractive aspects of Channel Infrastructure (CHI) as an investment is its exposure to the producer price index, (PPI) that has again exceeded expectations, resulting in a small increase in our FY25 forecast earnings.
Strong spot electricity and gas price rises over the past year have contributed a quarter of the PPI increase.
In addition, Auckland International Airport's (AIA) October 2024 operating metrics show modest growth on last year, albeit still well below pre-COVID. 


Channel Infrastructure - PPI Price Push Helps FY25 Outlook

<ul><li>Channel Infrastructure's (CHI) investor day re-emphasised the upside potential from leasing land to energy project developers, but with the market now pricing in some upside and with significant uncertainty on the likelihood and timing of the investments we downgrade our rating to NEUTRAL from OUTPERFORM.</li><li>The next material catalyst for CHI will be Seadra's decision on whether to proceed with the bio-refinery or not, a decision which likely depends on securing feedstock supply. </li><li>CHI's external fuel volume forecaster, Envisory, has lifted its volume forecasts out to 2045, boosting our medium-term outlook and leading to the modest +1.5% target price increase. </li></ul>

Channel Infrastructure's (CHI) investor day re-emphasised the upside potential from leasing land to energy project developers, but with the market now pricing in some upside and with significant uncertainty on the likelihood and timing of the investments we downgrade our rating to NEUTRAL from OUTPERFORM.The next material catalyst for CHI will be Seadra's decision on whether to proceed with the bio-refinery or not, a decision which likely depends on securing feedstock supply. CHI's external fuel volume forecaster, Envisory, has lifted its volume forecasts out to 2045, boosting our medium-term outlook and leading to the modest +1.5% target price increase. 

Channel Infrastructure - Energising Its Options the Next Challenge

<ul><li>Channel Infrastructure (CHI) has delivered on another private storage deal that lifts its medium-term earnings and dividend outlook, such that we upgrade our rating to OUTPERFORM from NEUTRAL.</li><li>In addition, there remains upside potential to provide additional storage for fuel security of supply issues, and CHI continues to explore options for its significant land bank.</li><li>The 1H24 result itself was in line with expectations, although it appears CHI is taking a slightly more conservative approach with its ordinary dividend, which makes sense given potential growth capex requirements.</li></ul>

Channel Infrastructure (CHI) has delivered on another private storage deal that lifts its medium-term earnings and dividend outlook, such that we upgrade our rating to OUTPERFORM from NEUTRAL.In addition, there remains upside potential to provide additional storage for fuel security of supply issues, and CHI continues to explore options for its significant land bank.The 1H24 result itself was in line with expectations, although it appears CHI is taking a slightly more conservative approach with its ordinary dividend, which makes sense given potential growth capex requirements.

Channel Infrastructure - Fuelling Up for Growth — 1H24 Result

New Zealand

Channel Infrastructure NZ Limited operates a fuel infrastructure company. The Company owns and operates a petroleum pipeline from the refinery to a terminal at Marsden Point, in Northland. Channel Infrastructure produces motor gasoline, automotive and diesel fuels, aviation jet fuel, light and heavy fuel oils, and bitumen.

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Channel Infrastructure NZ Ltd (CHI NZ)

Channel Infrastructure - It's a Matter of When, Not If

We reinstate our coverage of Channel Infrastructure (CHI) with an OUTPERFORM rating and a target price of NZ$2.13, both are upgrades from pre...

Forsyth Barr

Channel Infrastructure - Capitalising on Opportunity

Channel Infrastructure (CHI) is raising ~NZ$50m through a 1 for 12.12 underwritten pro-rata accelerated renounceable entitlement offer.

Forsyth Barr

Channel Infrastructure - PPI Price Push Helps FY25 Outlook

CHI has good upside potential, but likely requires a positive outcome on the bio-refinery project to see a significant lift in its share price from...

Forsyth Barr

Channel Infrastructure - Energising Its Options the Next Challenge

The next material catalyst for CHI will be Seadra's decision on whether to proceed with the bio-refinery or not, a decision which likely depends on...

Forsyth Barr

Channel Infrastructure - Fuelling Up for Growth — 1H24 Result

Channel Infrastructure (CHI) has delivered on another private storage deal that lifts its medium-term earnings and dividend outlook, such that we...

Forsyth Barr

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