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>We upgrade Restaurant Brands (RBD) to NEUTRAL from UNDERPERFORM. </li><li>RBD's 4Q23 trading update reiterated FY23 NPAT guidance of NZ$12m to NZ$16m, suggesting a strong recovery in 2H23 margins and providing some reassurance that input cost pressures may be past their peak.</li><li>While near-term risks remain elevated, including signs of weakening Australian consumer demand, minimum wage increases in California (from April), and the two KFC class action lawsuits in Australia, these are somewhat mitigated by improving gross margins and consumer sentiment in RBD's core New Zealand market. </li></ul>

We upgrade Restaurant Brands (RBD) to NEUTRAL from UNDERPERFORM. RBD's 4Q23 trading update reiterated FY23 NPAT guidance of NZ$12m to NZ$16m, suggesting a strong recovery in 2H23 margins and providing some reassurance that input cost pressures may be past their peak.While near-term risks remain elevated, including signs of weakening Australian consumer demand, minimum wage increases in California (from April), and the two KFC class action lawsuits in Australia, these are somewhat mitigated by improving gross margins and consumer sentiment in RBD's core New Zealand market. 

Restaurant Brands NZ - Back in the Kitchen — Upgrade to NEUTRAL

<ul><li>Restaurant Brands (RBD) has released a disappointing 1H23 result which was below our and consensus expectations. Key negatives included (1) significant ingredient cost inflation impacting EBITDA margins, particularly in the core NZ market, (2) difficulty raising prices without impacting sales volume as consumers appear to be more price-sensitive across all markets, and (3) higher expenses across non-operating items including depreciation and interest.</li><li>RBD reiterated its FY23 NPAT guidance range of NZ$12m to NZ$16m, implying a significant uplift in 2H23 profitability is required to meet guidance.</li><li>Our FY23 NPAT forecast is ~NZ$10m. This reflects our view that challenging macro-economic conditions and cost pressures are likely to persist over the next six months. </li></ul>

Restaurant Brands (RBD) has released a disappointing 1H23 result which was below our and consensus expectations. Key negatives included (1) significant ingredient cost inflation impacting EBITDA margins, particularly in the core NZ market, (2) difficulty raising prices without impacting sales volume as consumers appear to be more price-sensitive across all markets, and (3) higher expenses across non-operating items including depreciation and interest.RBD reiterated its FY23 NPAT guidance range of NZ$12m to NZ$16m, implying a significant uplift in 2H23 profitability is required to meet guidance.Our FY23 NPAT forecast is ~NZ$10m. This reflects our view that challenging macro-economic conditions and cost pressures are likely to persist over the next six months. 

Restaurant Brands NZ - 1H23 Result — From Sizzle to Fizzle

<ul><li>We downgrade Restaurant Brands (RBD) to UNDERPERFORM from NEUTRAL.</li><li>This primarily reflects (1) limited ability to pass through price increases from this point without risking competitiveness versus peers, (2) slowing demand in US divisions with conditions likely to persist in the near-term, (3) adverse macro-economic conditions highlighting the risk of slowing demand in Australia and New Zealand, and (4) NZ supply contract re-negotiations suggesting reduced bargaining power in RBD's core NZ market. </li><li>RBD's updated FY23 NPAT guidance range is now between NZ$12m to NZ$16m. </li></ul>

We downgrade Restaurant Brands (RBD) to UNDERPERFORM from NEUTRAL.This primarily reflects (1) limited ability to pass through price increases from this point without risking competitiveness versus peers, (2) slowing demand in US divisions with conditions likely to persist in the near-term, (3) adverse macro-economic conditions highlighting the risk of slowing demand in Australia and New Zealand, and (4) NZ supply contract re-negotiations suggesting reduced bargaining power in RBD's core NZ market. RBD's updated FY23 NPAT guidance range is now between NZ$12m to NZ$16m. 

Restaurant Brands NZ - Double Down(Grade) Hard to Swallow

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/guzman-y-gomez" target="_blank" data-smartkarma-citation="entities:43656:1" rel="noopener">Guzman Y Gomez</a> plans to raise around US$160m in its Australian IPO.</li>
<li>GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.</li>
<li>In this note, we talk about the not-so-positive aspects of the deal.</li>
</ul>



Guzman Y Gomez plans to raise around US$160m in its Australian IPO.
GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
In this note, we talk about the not-so-positive aspects of the deal.


Guzman Y Gomez IPO - The Negatives - Lawsuits and Management Churn

<ul>
<li>
<a href="https://www.smartkarma.com/entities/guzman-y-gomez" target="_blank" data-smartkarma-citation="entities:43656:1" rel="noopener">Guzman Y Gomez</a> plans to raise around US$160m in its Australian IPO.</li>
<li>GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.</li>
<li>In this note, we look at the company’s prior performance and future prospects.</li>
</ul>



Guzman Y Gomez plans to raise around US$160m in its Australian IPO.
GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
In this note, we look at the company’s prior performance and future prospects.


Guzman Y Gomez IPO - The Positives - Network Growing, Sales Have Outpaced Network Growth

New Zealand

Restaurant Brands New Zealand Limited operates fast food restaurant chains in New Zealand & Australia. The Company operates close to 300 stores which operate under the KFC, Pizza Hut and Starbucks restaurant names.

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Restaurant Brands NZ (RBD NZ)

Restaurant Brands NZ - Back in the Kitchen — Upgrade to NEUTRAL

We upgrade Restaurant Brands (RBD) to NEUTRAL from UNDERPERFORM. RBD's 4Q23 trading update reiterated FY23 NPAT guidance of NZ$12m to NZ$16m

Forsyth Barr

Restaurant Brands NZ - 1H23 Result — From Sizzle to Fizzle

RBD reiterated its FY23 NPAT guidance range of NZ$12m to NZ$16m, implying a significant uplift in 2H23 profitability is required to meet guidance.

Forsyth Barr

Restaurant Brands NZ - Double Down(Grade) Hard to Swallow

This primarily reflects (1) limited ability to pass through price increases from this point without risking competitiveness versus peers

Forsyth Barr

Guzman Y Gomez IPO - The Negatives - Lawsuits and Management Churn

Guzman Y Gomez plans to raise around US$160m in its Australian IPO. In this note, we talk about the not-so-positive aspects of the deal.

Sumeet Singh

Guzman Y Gomez IPO - The Positives - Network Growing, Sales Have Outpaced Network Growth

Guzman Y Gomez plans to raise around US$160m in its Australian IPO. In this note, we talk about the positive aspects of the deal.

Sumeet Singh

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