New Zealand Professional Investment Services Firm

Forsyth Barr

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.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>NZX (NZX.NZ) 1Q21 trading update - no surprises</h2>
NZX’s 1Q21 reported quarterly operating revenue split detailed few surprises with stronger operating statistics in March 2021 offsetting weaker January and February numbers.
Highlights in the period included a strong performance by the Wealth Technologies division which saw revenue up +155% driven by increased Funds Under Administration (FUA) of +237% against 1Q20.
Every division saw positive revenue growth on the prior year despite a normalisation of total value traded, slowdown in retail debt listings and lower member fees in the Smartshares business.
Key points
<ul>
<li>Within the Issuer Relationships division primary listing fees were up +228% driven by primary equity listings of NZ$529m in the quarter. This was supported by strong secondary equity capital raised, offsetting weaker debt and fund capital raised.</li>
<li>Secondary Markets operating metrics for the quarter saw strong March total value traded (relative to January and February) despite a decline of 17% against March 2020 (which saw a period of hyper trading at the offset of COVID-19) driving secondary markets revenue up +10% in the quarter.</li>
<li>Data &amp; Insights revenue growth remains solid at +8% vs 1Q20, driven by elevated terminal and licence numbers which offset poor diary data subscription fees during the period.</li>
<li>Funds Under Management saw modest revenue growth of +14%, with FUM based revenue growth of +24% offsetting a decrease in member based revenue of -27% suggesting a decrease in member fees given the growth in units on issue of +28%. We see this as a positive driver of future net cash inflows.</li>
<li>The Wealth Technologies division continued to perform well with new customers onboarded in 2020 (Hobson Wealth, Saturn Advisory and JBWere) contributing to a +237% in FUA since 1Q20.</li>
</ul>
Outlook
Guidance for FY21 EBITDA remains unchanged from the updated range of NZ$32.0m to NZ$35.5m at NZX’s AGM on 8 April earlier in the month. The tightening of the bottom end of the range was driven by NZX’s increased level of certainty around technology costs during the year. This was against our FY21 EBITDA forecast of NZ$35m.
Jamie Foulkes&nbsp; Analyst, Equities
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.1&amp;permmsgid=msg-f:1698142457991719383&amp;th=17910391829ae9d7&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ_qWgYLk-tjHM3WmLZpu2AOiU9K3qRY_uuM4qhxX3ebYIw2LGEaHXQhHrf-aYj5Ssry_l8wMmcJIbuch-WHJXO_EA1nN5yEy1j9EhTIQ7ZlUEcPBM9R1f4vSWM&amp;disp=emb" class="editor-image img-responsive"></figure>
 M: +64 20 4196 2993 |P: +64 4 914 2217 | TF: 0800 367 227&nbsp; Level 22, NTT Tower, 157 Lambton Quay, Wellington

NZX (NZX.NZ) 1Q21 trading update - no surprises
NZX’s 1Q21 reported quarterly operating revenue split detailed few surprises with stronger operating statistics in March 2021 offsetting weaker January and February numbers.
Highlights in the period included a strong performance by the Wealth Technologies division which saw revenue up +155% driven by increased Funds Under Administration (FUA) of +237% against 1Q20.
Every division saw positive revenue growth on the prior year despite a normalisation of total value traded, slowdown in retail debt listings and lower member fees in the Smartshares business.
Key points

Within the Issuer Relationships division primary listing fees were up +228% driven by primary equity listings of NZ$529m in the quarter. This was supported by strong secondary equity capital raised, offsetting weaker debt and fund capital raised.
Secondary Markets operating metrics for the quarter saw strong March total value traded (relative to January and February) despite a decline of 17% against March 2020 (which saw a period of hyper trading at the offset of COVID-19) driving secondary markets revenue up +10% in the quarter.
Data &amp; Insights revenue growth remains solid at +8% vs 1Q20, driven by elevated terminal and licence numbers which offset poor diary data subscription fees during the period.
Funds Under Management saw modest revenue growth of +14%, with FUM based revenue growth of +24% offsetting a decrease in member based revenue of -27% suggesting a decrease in member fees given the growth in units on issue of +28%. We see this as a positive driver of future net cash inflows.
The Wealth Technologies division continued to perform well with new customers onboarded in 2020 (Hobson Wealth, Saturn Advisory and JBWere) contributing to a +237% in FUA since 1Q20.

Outlook
Guidance for FY21 EBITDA remains unchanged from the updated range of NZ$32.0m to NZ$35.5m at NZX’s AGM on 8 April earlier in the month. The tightening of the bottom end of the range was driven by NZX’s increased level of certainty around technology costs during the year. This was against our FY21 EBITDA forecast of NZ$35m.
Jamie Foulkes&nbsp; Analyst, Equities

 M: +64 20 4196 2993 |P: +64 4 914 2217 | TF: 0800 367 227&nbsp; Level 22, NTT Tower, 157 Lambton Quay, Wellington

NZX

NZX 1Q21 Trading Update