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

Summerset Group Holdings / Equity Bottom-Up

<ul><li>Summerset (SUM) released its 4Q sales metrics with some brief comments on the current environment</li><li>SUM acknowledged the “tough market conditions” in the last few months of the year</li><li>Q4 resales and new-sales were up 22% and 15% versus 4Q last year, respectively</li></ul>

Summerset (SUM) released its 4Q sales metrics with some brief comments on the current environmentSUM acknowledged the “tough market conditions” in the last few months of the yearQ4 resales and new-sales were up 22% and 15% versus 4Q last year, respectively

Summerset (SUM): 4Q22 Metrics – Sales of Occupation Rights

Thematic (Sector/Industry)

<ul><li>Our Montgomerie-Ibbotson (MI) index decreased very slightly in November, down -0.1% versus October 2022 and up +5.1% vs November 2021</li><li>The incremental COVID pricing buffer built up during the house price rally in 2020 and 2021 is now, on average, fully depleted, as New Zealand faces its biggest nominal house price decline for at least 50 years</li><li>The glass half empty approach would be to focus on the depleted buffer, while the glass half full approach focusses on the ability for the aged care operators to hold prices stable in the midst of a sharp housing downturn</li></ul>

Our Montgomerie-Ibbotson (MI) index decreased very slightly in November, down -0.1% versus October 2022 and up +5.1% vs November 2021The incremental COVID pricing buffer built up during the house price rally in 2020 and 2021 is now, on average, fully depleted, as New Zealand faces its biggest nominal house price decline for at least 50 yearsThe glass half empty approach would be to focus on the depleted buffer, while the glass half full approach focusses on the ability for the aged care operators to hold prices stable in the midst of a sharp housing downturn

Aged Care Sector: Montgomerie-Ibbotson Aged Care Pricing Index (13-Dec-2022)

<ul><li>Demand strong but time to settle extends: SUM's demand remains strong, with pre-sales as a percentage of units released at record levels</li><li>Development pipeline: SUM retained it build rate guidance of ~600 units for this year and suggested that it would keep the build rate at this level for now</li><li>Care investment: SUM welcomes the latest announcement on pay parity but believes it does not solve the economic challenges of care</li></ul>

Demand strong but time to settle extends: SUM's demand remains strong, with pre-sales as a percentage of units released at record levelsDevelopment pipeline: SUM retained it build rate guidance of ~600 units for this year and suggested that it would keep the build rate at this level for nowCare investment: SUM welcomes the latest announcement on pay parity but believes it does not solve the economic challenges of care

Summerset Group: So Far So Good — Not Immune to Weak Market

<ul><li>The aged care sector is valued around or significantly below equity book value</li><li>It's a RYM problem, not a sector problem; three of the four operators are close to debt free in FY26/FY27</li><li>6x EV/annuity EBITDA with no debt in FY27/28 — an attractive proposition</li></ul>

The aged care sector is valued around or significantly below equity book valueIt's a RYM problem, not a sector problem; three of the four operators are close to debt free in FY26/FY276x EV/annuity EBITDA with no debt in FY27/28 — an attractive proposition

Aged Care Sector: What If? Fast Track to Ex-Growth

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ryman-healthcare-ltd" target="_blank" data-smartkarma-citation="entities:10590:1" rel="noopener">Ryman Healthcare (RYM NZ)</a> has a secular growth story underpinned by ageing population. Australia and New Zealand are projected to have 5.3 million people aged 75 and above by 2062.</li>
<li>Rising interest rate and falling property prices should limit the upside potential of property management companies, like Ryman. New Zealand's house prices are forecast to sink 9% this year.</li>
<li>Ryman’s site of the Moondah mansion in Mt Eliza, near Melbourne central business district is still under litigation.</li>
</ul>



Ryman Healthcare (RYM NZ) has a secular growth story underpinned by ageing population. Australia and New Zealand are projected to have 5.3 million people aged 75 and above by 2062.
Rising interest rate and falling property prices should limit the upside potential of property management companies, like Ryman. New Zealand's house prices are forecast to sink 9% this year.
Ryman’s site of the Moondah mansion in Mt Eliza, near Melbourne central business district is still under litigation.


Ryman Healthcare (RYM NZ): Strong Underlying Growth Story; Current Macro Scenario Limits Upside

New Zealand

Summerset Group Holdings Ltd. is a profit-oriented entity and develops, owns and operates integrated retirement villages, rest homes and hospitals for the elderly within New Zealand.

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Summerset Group Holdings (SUM NZ)

Summerset (SUM): 4Q22 Metrics – Sales of Occupation Rights

Summerset (SUM) released its 4Q sales metrics with some brief comments on the current environment; in the fourth quarter SUM had 139 new-sales and...

Forsyth Barr

Aged Care Sector: Montgomerie-Ibbotson Aged Care Pricing Index (13-Dec-2022)

Our Montgomerie-Ibbotson (MI) index decreased very slightly in November, down -0.1% versus October 2022 and up +5.1% vs November 2021 - this is the...

Forsyth Barr

Summerset Group: So Far So Good — Not Immune to Weak Market

Summerset (SUM) held a confident investor day in Auckland on Thursday, 8 December 2022 and we walk away with three main takeaways; (1) demand as...

Forsyth Barr

Aged Care Sector: What If? Fast Track to Ex-Growth

The aged care sector is valued around or significantly below equity book value, which suggests to us that the market is losing confidence not only...

Forsyth Barr

Ryman Healthcare (RYM NZ): Strong Underlying Growth Story; Current Macro Scenario Limits Upside

Ryman’s secular growth story is clouded by rising interest rate and falling property prices state. Resale income and unsold stock will be some of...

Tina Banerjee

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