Napier Port IPO

[ados_nz]

Up to 45 percent of Napier Port is expected be listed on the NZX in the middle of next year.

Another POT style success story?

[Chanchay]

Do you know who is participating in the IPO? can we get a slither through ASB/ANZ?

[Hectorplains]

Do you know who is participating in the IPO? can we get a slither through ASB/ANZ?

Council only voted to progress with the float on the 19th. Final decisions on a share offer will be in the New Year.

[Lola]

Council only voted to progress with the float on the 19th. Final decisions on a share offer will be in the New Year.

this wont happen any time soon...or it shouldnt. They have missed the market meantime.

[Marilyn Munroe]

The proposed new container wharf development is described on the port web site. I have three queries.

The what will it look like images do not show the cranes to be used to work vessels along side. As part of the development does the Port intend to install a conventional container crane or use the existing swiveling jib cranes?

The new container berth is only partially protected by a breakwater. Is this sufficient protection from swells?

The latest annual report shows an increase in containers across the wharf. To what extent is this a blip caused by earthquake troubles in the Wellington Container Terminal?

Boop boop de do
Marilyn

[stones]

Does anyone have any up to date info re the above IPO. Heard a whisper maybe next month.

[Filthy]

http://www.scoop.co.nz/stories/AK1905/S00638/regional-council-confirms-napier-port-ipo.htm

[stones]

http://www.scoop.co.nz/stories/AK1905/S00638/regional-council-confirms-napier-port-ipo.htm
Thanks mate appreciate that

[kiora]

Step right up
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12244211

[percy]

I gave Craigs my expression of interest a few weeks ago.Look forward to reading the prospectus.

[Lewylewylewy]

Boats usually come with cranes.

[Lewylewylewy]

I wonder if anyone using asb securities will be able to buy? I suspect this will be an opportunity for only a few people, then the open market price will go up 20% almost immediately after the ipo...

[percy]

Agree.
I expect clients of the major brokers will receive very modest allocations.

[peat]

Agree.
I expect clients of the major brokers will receive very modest allocations.

there will be plenty for iwi and locals though


The Regional Council confirmedthat all Hawke’s Bay residents, including local iwi,wanting to buy shares in Napier Port would be offered aguaranteed minimum allocation of shares

I wonder if there is some possible conflict in that though with the main man a
Hon Rick Barker
being
ChiefCrown Negotiator
with the
Minister for Treaty of Waitangi.

[Baa_Baa]

there will be plenty for iwi and locals though


The Regional Council confirmedthat all Hawke’s Bay residents, including local iwi,wanting to buy shares in Napier Port would be offered aguaranteed minimum allocation of shares

I wonder if there is some possible conflict in that though with the main man a
Hon Rick Barker
being
ChiefCrown Negotiator
with the
Minister for Treaty of Waitangi.




Maybe, but not worth worrying about imo, just get some if you want some. Us minnows are at the back of the queue but we’re in the queue if we want some.

[sb9]

I wonder if anyone using asb securities will be able to buy? I suspect this will be an opportunity for only a few people, then the open market price will go up 20% almost immediately after the ipo...

ASB sec are absolutely hopeless for these kind of allocations, not counting them in.

[trader_jackson]

Not sure if this has already been mentioned, but here we go anyway:

"Goldman Sachs' Owen Birrell told clients Napier Port was New Zealand's fourth largest port for handling shipping containers and sixth biggest when it came to bulk cargo.


The company was said to expect $NZ104.6 million ($100 million) revenue in the 2020 financial year, $NZ43.3 million operating EBITDA and $NZ21 million in profit after tax.


Birrell told clients the port was worth $NZ518 million to $NZ616 million in terms of its enterprise value, or 12 to 14-times forward earnings." - AFR

[Scooter]

The brokers sound like, Craigs, Forsyth Barr and JB Were. Forsyth Barr have decent exposure in the Hawkes Bay.

[bull....]

Not sure if this has already been mentioned, but here we go anyway:

"Goldman Sachs' Owen Birrell told clients Napier Port was New Zealand's fourth largest port for handling shipping containers and sixth biggest when it came to bulk cargo.


The company was said to expect $NZ104.6 million ($100 million) revenue in the 2020 financial year, $NZ43.3 million operating EBITDA and $NZ21 million in profit after tax.


Birrell told clients the port was worth $NZ518 million to $NZ616 million in terms of its enterprise value, or 12 to 14-times forward earnings." - AFR

heres the link

https://www.afr.com/street-talk/napier-port-ipo-kicks-off-with-500m-plus-valuation-20190627-p521r4

pot trading at pe of 44 so plenty of upside a lol

[bull....]

i see in the AFR again today they saying the aussies will bid the price up in ipo to make sure nobody gets it cheap because they can cause its a infrastructure yield play.

I dont like the fact the port is paying the council 50 - 60m special div just before the ipo thats money could have been spent in the upgrade. or are using ipo proceeds to pay them lol

[trader_jackson]

I dont like the fact the port is paying the council 50 - 60m special div just before the ipo thats money could have been spent in the upgrade. or are using ipo proceeds to pay them lol

Forsyth & Co had to convince the council to proceed with the IPO somehow didn't they?

I hear this is going to be very heavily oversubscribed... good luck everyone!

[bull....]

Forsyth & Co had to convince the council to proceed with the IPO somehow didn't they?

I hear this is going to be very heavily oversubscribed... good luck everyone!

be very hard to get even a little on this. i imagine they could price it quite high and still have big demand. anything cheaply priced would be ripping of the taxpayers at the moment

[777]

be very hard to get even a little on this. i imagine they could price it quite high and still have big demand. anything cheaply priced would be ripping of the taxpayers at the moment

Tax payers or rate payers?

[Sideshow Bob]

This could be the next one on the block....

https://www.odt.co.nz/business/ownership-review-port-otago-napier-listing

[Scrunch]

I guess the real question is what the best comparator is.

If its POT then the sky's the limit for the price as POT have a huge PE (and multiplier to revenue). The pricing mentioned earlier in this thread indicates its price-point is more expensive than Southport but below PoT. If you use southport multiples, you don't get to the $500m+ pricepoints being mentioned.

SouthPort
Revenue of $40.7m (to Jun 2018)
Operating profit before financing $13.8m
Net surplus of $9.7m
Net Assets $40.1m
Market Cap (28 Jun) $177m = Historical PE 18.2, 4.7x revenue.
Half yr to Dec2018. Revenue up but profitability down slightly


Port of Tauranga
Revenue of $283.7m
Operating result before interest, tax and equity accounted $129.3m
Net Assets $1.12b
Net surplus $94.3m
Market Cap (28 Jun) $4.31b = Historical PE 45.7, 15.3x revenue

[Lewylewylewy]

I think part ipo you have to factor the massive demand that will push the price up. Market sentiment will be huge imo

[Lola]

I think part ipo you have to factor the massive demand that will push the price up. Market sentiment will be huge imo

Yes agree with that market sentiment comment but it’s coming from press hype to the retail mob. This is no POT in fact to a large extent POT can dictate how successful Napier Port might or might not be.

[Lewylewylewy]

True, but they're not raising a massive amount of money.

Agree its no POT, but they state that they want money for growth capacity, and they're subject to land value increases. With plenty of demand for nz products, and primary industry in the area, I guess it will be a good short, medium or long term hold.

[King1212]

https://www.napierportshareoffer.co.nz/Country-Validation/?ReturnUrl=%2fShare-Offer%2f#open

Only for napier residents

[Sgt Pepper]

https://www.napierportshareoffer.co.nz/Country-Validation/?ReturnUrl=%2fShare-Offer%2f#open

Only for napier residents

so if someone has a po box address in Napier does that count??

[Ggcc]

https://www.napierportshareoffer.co.nz/Country-Validation/?ReturnUrl=%2fShare-Offer%2f#open

Only for napier residents

Thanks I have registered

[Sgt Pepper]

Does anyone have estimates of share price this could attract once listed??

[hardt]

FY18

Revenue ~93m
NPAT ~17.4m
Op Cashflow ~28m
Debt 80m

Should be a 300-400m valuation.

Solid, boring and probably overhyped... I'd buy in if valued at lower end of 300...
Knowing how it usually goes will likely end up closer to 500.

[Joshuatree]

They need re $190 million for this
6 Wharf will be a multi-purpose 350 metre length wharf, planned to be located along the northern face of the existing container terminal. The 6 Wharf expansion project includes a dredging programme which will create a new vessel turning area. The project has received all resource consents expected to be required, with other construction related consents such as building consents still to be obtained.
The key operational benefits of the 6 Wharf expansion project include:


Reduced congestion: 6 Wharf will improve operating efficiency by reducing secondary vessel movements (temporarily moving vessels off wharves to accommodate other vessels) by an estimated 100 movements per year

Ability to handle larger vessels: 6 Wharf will be able to handle container ships up to 320 metres in length and cruise ships up to 360 metres in length

Extending the Port’s container vessel capacity

Allowing berthing for larger container vessels 24-hours per day

Operational agility: 6 Wharf will be used for both container and cruise ships, and will be capable of supporting twin lift gantry cranes if required in the future

Operational resilience: 6 Wharf’s design improves the Port’s potential resilience to a significant seismic event

[Aaron]

Bit of news in the Herald this morning re the Napier Port float. 4% expected yield.
c.f.
MMH 4.14%
POT 4.07%
SPN 5.47%

Doesn't sound very exciting. Will it be in an index? Probably worth stagging if bigger institutional investors have to buy more but the amount you might get allocated probably doesn't make it worthwhile. Although infrastructure and utility assets appeal to my conservative nature. Although accepting 4% means my retirement savings in theory need to climb from $1mill at 7% to $1.75mill at 4% not looking likely at this stage especially as acceptable yields keep dropping. That's right I am hoping for $70k before tax from my retirement savings. Probably just enough to not be entitled to any national super when I retire.

[777]

Bit of news in the Herald this morning re the Napier Port float. 4% expected yield.
c.f.
MMH 4.14%
POT 4.07%
SPN 5.47%

Doesn't sound very exciting. Will it be in an index? Probably worth stagging if bigger institutional investors have to buy more but the amount you might get allocated probably doesn't make it worthwhile. Although infrastructure and utility assets appeal to my conservative nature. Although accepting 4% means my retirement savings in theory need to climb from $1mill at 7% to $1.75mill at 4% not looking likely at this stage especially as acceptable yields keep dropping. That's right I am hoping for $70k before tax from my retirement savings. Probably just enough to not be entitled to any national super when I retire.

Just remember with 3% inflation then every 24 years you need twice as much. Rule of 72.

[Aaron]

Just remember with 3% inflation then every 24 years you need twice as much. Rule of 72.

Thanks for the reminder. Hopefully a port can raise prices and dividends in line with inflation. Possibly better than a term deposit in the current environment.

[bull....]

seems fairly priced for the times. probably be huge demand because of the current climate for infrastructure type stocks i imagine

[Ricky-bobby]

Or would u be better just to buy POT shares?... what’s hb got? Logs and apples, both will prob be already on long term arrangements through POT?... will it be able to compete, looks like a volume game to me...

[Ggcc]

Or would u be better just to buy POT shares?... what’s hb got? Logs and apples, both will prob be already on long term arrangements through POT?... will it be able to compete, looks like a volume game to me...

The apple industry from memory will grow around 15% per annum for Hawkes Bay, that is if they will not plant any new trees. We all know that new trees are being planted all the time, with a new huge farm changing from livestock to apples and vineyards getting vines removed and replaced with apples. I am picking within the next 5 years apples will easily double in quantity if not treble. The only thing I cannot understand is where is the labour coming from to collect all these apples. This year we have seen a huge amount of apples left on the trees, due to maturity issues and an undersupply of pickers. The majority of orchardists blamed the government stopping overseas pickers coming in to collect the fruit.

I don't know what will happen with the logs, but a friend mentioned that logs should not change too much, as the logs heading overseas are not the best quality logs

My intention will still be to purchase a few thousand shares in the port. I would prefer the Napier Port to be primarily owned by the people of Hawkes Bay.... Well at least 50% of it including council.

[Jay]

The apple industry from memory will grow around 15% per annum for Hawkes Bay, that is if they will not plant any new trees. We all know that new trees are being planted all the time, with a new huge farm changing from livestock to apples and vineyards getting vines removed and replaced with apples. I am picking within the next 5 years apples will easily double in quantity if not treble. The only thing I cannot understand is where is the labour coming from to collect all these apples. This year we have seen a huge amount of apples left on the trees, due to maturity issues and an undersupply of pickers. The majority of orchardists blamed the government stopping overseas pickers coming in to collect the fruit.
.

Yet the number of people on a benefit related to employment has increased....

[Joshuatree]

Not so sure about logs, the way prices are going and A massive supply from Russia now through a new railway corridor to China could mean the trees are just left to grow until prices improve again.how long its going to take, who knows.Could be tough times ahead for forest owners and all the infrastructure, truckers etc that go with it

[Ricky-bobby]

Yep growers will be competing for labour and the higher value crops will win! That’s the thing about POT they have kiwi fruit and diary also, just a few more strings to their bow.... I’m pretty sure most NZ timber that goes to China is used for paper, thus low value timber.

[Baa_Baa]

Not so sure about logs, the way prices are going and A massive supply from Russia now through a new railway corridor to China could mean the trees are just left to grow until prices improve again.how long its going to take, who knows.Could be tough times ahead for forest owners and all the infrastructure, truckers etc that go with it

Thanks to snapiti of another forum. Despicable your post implies claiming this insight for yourself.

[Joshuatree]

You can be a reactive person yet again again but maybe look at the divisive situation that has happened here.
Ive chosen to amalgamate to an extent and think of the two sites as one but only share on one . I am not a traitor to this site which has been fantastic over many years as a vehicle for sharing to me and many hundreds of others.. I will share any info i get from anywhere if i think its pertinent and helpful to others. Sometimes i put links up and credits for information IF i have read it no where else. .

Pretty well everything i share ive read or seen or spoken to other people about. I guess like art, sharing information is theft. Ask yourself why you have such over reactions to things and you will find a growth edge for yourself and become a less volcanic person and more accepting and loving of the skin you are in. Best wishes there.

[blackcap]

Yep growers will be competing for labour and the higher value crops will win! That’s the thing about POT they have kiwi fruit and diary also, just a few more strings to their bow.... I’m pretty sure most NZ timber that goes to China is used for paper, thus low value timber.

Plagiriser to boot. At uni the penalty for that offence was fail the course. Looks like you fail JT.

[winner69]

JT - time to install that update that’s ready methinks

[Joshuatree]

Thanks will keep sharing anything that may be worthwhile be it from here , H/C, friends, F/P ,paper, video, tv, thats what makes this place work sharing without it whats the point, hopefully more givers then takers here.
Updating all the time and like your good self w69, sharing.

Black cap you need to take spelling lessons and be more positive and maybe be in the now .

[Joshuatree]

9/7/19
Log price slump catches industry unawares | Stuff.co.nz (https://www.google.com/url?client=internal-uds-cse&cx=006730714154542492986:oh6vl0ybuqy&q=https://www.stuff.co.nz/business/113768022/log-price-slump-catches-industry-unawares&sa=U&ved=2ahUKEwiIgv7WlsLjAhWu7HMBHdimBdkQFjAAegQIARAC&usg=AOvVaw0yVQDk-AqWEm7W26FCyOYT) To all the plaglarisers out there :) and hi snaps hope you and familiars are all well.;)

[Lola]

Thanks to snapiti of another forum. Despicable your post implies claiming this insight for yourself.

He's entitled to have the same view as others. What nonsense. What's somewhat despicable is Gaynors Herald article pushing his book yet again and suggesting in pretty certain terms that this Napier Port float is another POT. They arent in the same street sorry.

[trader_jackson]

I haven't installed the update yet so I'll post my brief thoughts on here... I think this will do solidly in the medium to long term, and certainly very well on the first day (they are really ramping this to the locals with interest free loans to staff and priority offers to them etc - unfortunately, they will likely be the first ones to sell when they can see a gain and likely not medium to long term investors - in my view).

My reasons for thinking it will do solidly in the medium to long term is that the new wharf will really alleviate constraints Napier port is currently facing - the danger with the new wharf is that it runs way behind budget (both time and cost wise)... it is interesting to note about the log prices slumping and how this could impact (and how previous log price jumps have helped), however I actually see an opportunity to diversify away from logging with the new wharf... (as well as allow more logging) it will allow more cruise ships (Note 18 July, Stuff: In a list of Australia and New Zealand's top-rated destinations compiled by Cruise Critic, Napier placed second...) so I think, all things taken into account (and me jumping to conclusion rather than fully explain my whole reasoning), Napier port will do solidly.

I'll be having a shot at getting an allocation, but not expecting any given the big ramp to/for the locals.

[percy]

Yes getting an allocation will be hard.
Don't think too many people will turn their "firm" broker allocation down.

[theace]

I haven't installed the update yet so I'll post my brief thoughts on here... I think this will do solidly in the medium to long term, and certainly very well on the first day (they are really ramping this to the locals with interest free loans to staff and priority offers to them etc - unfortunately, they will likely be the first ones to sell when they can see a gain and likely not medium to long term investors - in my view).

My reasons for thinking it will do solidly in the medium to long term is that the new wharf will really alleviate constraints Napier port is currently facing - the danger with the new wharf is that it runs way behind budget (both time and cost wise)... it is interesting to note about the log prices slumping and how this could impact (and how previous log price jumps have helped), however I actually see an opportunity to diversify away from logging with the new wharf... (as well as allow more logging) it will allow more cruise ships (Note 18 July, Stuff: In a list of Australia and New Zealand's top-rated destinations compiled by Cruise Critic, Napier placed second...) so I think, all things taken into account (and me jumping to conclusion rather than fully explain my whole reasoning), Napier port will do solidly.

I'll be having a shot at getting an allocation, but not expecting any given the big ramp to/for the locals.

Are non-Nelson residents able to apply? And if yes, how/where? TIA.

[777]

Are non-Napier residents able to apply? And if yes, how/where? TIA.

Fixed it for you.

[Filthy]

BROKER FIRM OFFERThe Broker Firm Offer is only open to New Zealand resident retail clients of NZX Firms who have received an allocation from their NZX Firm. The Broker Firm Offer is expected to be open from 8 August to 16 August 2019. Please contact your broker if you wish to participate in the Broker Firm Offer. If you do not have a broker, we invite you to contact Craigs Investment Partners, JBWere or Forsyth Barr. See Contact Information (https://www.napierportshareoffer.co.nz/Share-Offer-P2/?page=contact) for contact details.
How to apply under the Broker Firm Offer
Applications for Offer Shares under the Broker Firm Offer must be made on the Broker Firm Application Form, which will be available from 23 July 2019 at the back of the PDS available for download on this website. Applications for Offer Shares under the Broker Firm Offer cannot be made online via this website.

[Vaygor1]

10688
______________________________

[winner69]

10688
______________________________

That’s pretty cool mate

[Ricky-bobby]

Something I got from shareclarity this morning: Considering the
Napier Port IPO?
Napier Port is planning to list on the New Zealand Stock Exchange next month. We have reviewed its product disclosure statement and compared it to the other ports and infrastructure companies we cover. In brief:
We did not see anything too disconcerting in the product disclosure statement or with its proposed price;
Napier Port should fair better than other ports with the recent drop in log prices; but
We see next year's international shipping regulations as a material risk that could call into question the planned expansion of its container wharf. These regulations have had little coverage despite their potential impact on many other companies.
1. Napier Port looks fairly priced


We reviewed the Napier Port product disclosure statement and did not see anything unexpected or too disconcerting with its operations, financials, stated risks or proposed share price. Napier Port is being priced at NZD2.27-2.60 a share, which is similar to our valuation of NZD2.25 and equates to a 24.5x P/E ratio* and 2.9% dividend yield**. This is in line with South Port, Northport and even Port of Tauranga on some metrics.

Please visit Shareclarity for more information and perspectives on each of these companies.
2. Napier Port should maintain its log volumes, at least in the short term

Napier Port is susceptible to changes in global log prices, but the recent drop may not impact its near-term earnings if it can win volume from Wairoa and the 'Bermuda Triangle'.

Pine trees in the Central North Island are usually felled at 24-28 years of age. Younger trees have too many knots and older trees are too big to fit most sawmill headends. Fortuitously, there are several thousand hectares of forest near Wairoa that were planted in 1991 and will soon need to be felled, irrespective of price. These logs could go to one of three ports:
Eastland Port is the closest port, but it is facing maintenance issues that may prevent it from handling large volumes;
Port of Tauranga is connected via State Highway 2 and has the lowest log handling fees, but it also has the longest lead times and will incur extra road transportation costs over the Urewera Ranges***; or
Napier Port is also connected by via State Highway 2 and has the shortest turnaround times, but high log handling fees.
Napier Port is well-positioned to win most of the Wairoa volume and if not, it could compete more aggressively with Port Taranaki and Centreport for logs in the ‘Bermuda Triangle’ between Palmerston North, Whanganui and Taumarunui.
3. Napier Port may want to reconsider the planned expansion of its container wharf
Almost every shipping nation, including China, has ratified Marpol Annex VI, an agreement to limit ship sulphur emissions from 1 January 2020. What's important is that ships are being modified to use more expensive fuel-types that are not readily available in New Zealand. Ships travelling to New Zealand may, therefore, need to increase their shipping fees and reduce the number of ports they visit. This could:
Lower international cargo volumes (unfavourable). New Zealand is geographically far from most of its trading partners, so transportation accounts for a large part of the overall cost of imported and exported goods. Higher shipping fees could mean New Zealand consumers purchase more goods that are produced domestically rather than importing them. It could also mean New Zealand exporters start to produce a higher number of value-added products on which they can recoup the higher shipping fees rather than exporting lower-value commodities that compete with other global producers with shorter distances to markets; and
Consolidate cargo at fewer ports (favourable). Napier Port is located between three smaller ports - Port Taranaki to the West, Eastland Port to the East and Centreport to the South - whose cargo could instead be transported to Napier by road or rail; and
Lead to port specialisation (unfavourable). Napier Port is unlikely to win higher-value container volume over Port of Tauranga because it is closer to Auckland, has larger container infrastructure and lower cargo handling fees. Napier Port may, therefore, be limited or better suited as a specialist forestry and breakbulk terminal.
We have laboured this point because the impacts of these new shipping regulations will be seen early next year and they have the potential to affect many companies particularly ports, agriculture, logistics, retailers and manufacturers. More specifically, it could call into question the planned expansion and expected return on Napier Port's container wharf.
* P/E or price to earnings ratio is a company’s share price divided by its forecast earnings per share. Investors generally look for companies with lower P/E ratios and higher earnings growth than their peers as it suggests they may be undervalued by the market.
** Dividend yield is a company’s post-tax dividends per share divided by its share price. Investors generally look for companies with higher dividend yields than their peers, provided they also have dividend coverage ratios above 1.0x, as it suggests they can keep paying dividends without increasing debt and they may be undervalued by the market.
*** Napier Port is favourably located on the Southern side of the Urewera Ranges, which creates a natural commercial barrier between it and Port of Tauranga. Southern forest management companies generally favour Napier Port over Port of Tauranga even though its average handling fees are higher. This is because it often has shorter lead times and there are likely to be extra transportation costs to move logs over the ranges to Tauranga.

[Joshuatree]

Very int thanks for sharing Ricky. Looks like a squeeze in fees and charges coming and a questionvmark over even building the container/cruise ship expansion.

[Wsp]

MPI have some relevant wood availability forecasts that some of you might find of interest. There are a lot of small scale forests coming up to harvest age over the next 10 years.
https://www.mpi.govt.nz/dmsdocument/10793/sitemap

[bull....]

Something I got from shareclarity this morning: Considering the
Napier Port IPO?
Napier Port is planning to list on the New Zealand Stock Exchange next month. We have reviewed its product disclosure statement and compared it to the other ports and infrastructure companies we cover. In brief:
We did not see anything too disconcerting in the product disclosure statement or with its proposed price;
Napier Port should fair better than other ports with the recent drop in log prices; but
We see next year's international shipping regulations as a material risk that could call into question the planned expansion of its container wharf. These regulations have had little coverage despite their potential impact on many other companies.
1. Napier Port looks fairly priced


We reviewed the Napier Port product disclosure statement and did not see anything unexpected or too disconcerting with its operations, financials, stated risks or proposed share price. Napier Port is being priced at NZD2.27-2.60 a share, which is similar to our valuation of NZD2.25 and equates to a 24.5x P/E ratio* and 2.9% dividend yield**. This is in line with South Port, Northport and even Port of Tauranga on some metrics.

Please visit Shareclarity for more information and perspectives on each of these companies.
2. Napier Port should maintain its log volumes, at least in the short term

Napier Port is susceptible to changes in global log prices, but the recent drop may not impact its near-term earnings if it can win volume from Wairoa and the 'Bermuda Triangle'.

Pine trees in the Central North Island are usually felled at 24-28 years of age. Younger trees have too many knots and older trees are too big to fit most sawmill headends. Fortuitously, there are several thousand hectares of forest near Wairoa that were planted in 1991 and will soon need to be felled, irrespective of price. These logs could go to one of three ports:
Eastland Port is the closest port, but it is facing maintenance issues that may prevent it from handling large volumes;
Port of Tauranga is connected via State Highway 2 and has the lowest log handling fees, but it also has the longest lead times and will incur extra road transportation costs over the Urewera Ranges***; or
Napier Port is also connected by via State Highway 2 and has the shortest turnaround times, but high log handling fees.
Napier Port is well-positioned to win most of the Wairoa volume and if not, it could compete more aggressively with Port Taranaki and Centreport for logs in the ‘Bermuda Triangle’ between Palmerston North, Whanganui and Taumarunui.
3. Napier Port may want to reconsider the planned expansion of its container wharf
Almost every shipping nation, including China, has ratified Marpol Annex VI, an agreement to limit ship sulphur emissions from 1 January 2020. What's important is that ships are being modified to use more expensive fuel-types that are not readily available in New Zealand. Ships travelling to New Zealand may, therefore, need to increase their shipping fees and reduce the number of ports they visit. This could:
Lower international cargo volumes (unfavourable). New Zealand is geographically far from most of its trading partners, so transportation accounts for a large part of the overall cost of imported and exported goods. Higher shipping fees could mean New Zealand consumers purchase more goods that are produced domestically rather than importing them. It could also mean New Zealand exporters start to produce a higher number of value-added products on which they can recoup the higher shipping fees rather than exporting lower-value commodities that compete with other global producers with shorter distances to markets; and
Consolidate cargo at fewer ports (favourable). Napier Port is located between three smaller ports - Port Taranaki to the West, Eastland Port to the East and Centreport to the South - whose cargo could instead be transported to Napier by road or rail; and
Lead to port specialisation (unfavourable). Napier Port is unlikely to win higher-value container volume over Port of Tauranga because it is closer to Auckland, has larger container infrastructure and lower cargo handling fees. Napier Port may, therefore, be limited or better suited as a specialist forestry and breakbulk terminal.
We have laboured this point because the impacts of these new shipping regulations will be seen early next year and they have the potential to affect many companies particularly ports, agriculture, logistics, retailers and manufacturers. More specifically, it could call into question the planned expansion and expected return on Napier Port's container wharf.
* P/E or price to earnings ratio is a company’s share price divided by its forecast earnings per share. Investors generally look for companies with lower P/E ratios and higher earnings growth than their peers as it suggests they may be undervalued by the market.
** Dividend yield is a company’s post-tax dividends per share divided by its share price. Investors generally look for companies with higher dividend yields than their peers, provided they also have dividend coverage ratios above 1.0x, as it suggests they can keep paying dividends without increasing debt and they may be undervalued by the market.
*** Napier Port is favourably located on the Southern side of the Urewera Ranges, which creates a natural commercial barrier between it and Port of Tauranga. Southern forest management companies generally favour Napier Port over Port of Tauranga even though its average handling fees are higher. This is because it often has shorter lead times and there are likely to be extra transportation costs to move logs over the ranges to Tauranga.


cheers. Most insiders in the forestry industry are saying the dip in log prices volumes may be temporary due to over supply in china and seasonal down period in china due to weather factors. they see the dip lasting only a few mths. Guess we will all know by end of the yr if they are right.

Also dont see napier taking any business from centreport , might get a little from gisborne and taranaki doesnt do much logs anyway.

the biggest thing is napier make the log ships move out to make room for cruise ships so costs are a pain for charters. new wharf may help this matter and make it more attractive for ships , this is one reason some log ships dont go there. so potential lies there to gain volume

[Joshuatree]

MPI have some relevant wood availability forecasts that some of you might find of interest. There are a lot of small scale forests coming up to harvest age over the next 10 years.
https://www.mpi.govt.nz/dmsdocument/10793/sitemap

Great, thanks Wsp. Alot of info there , ive skimmed but looks to be plenty of stable mature supply ahead. One small example here.

"The large increase in harvest volume after 2019 (Figure 4-7) reflects the maturing of the small- scale owners’ estate. For example, the increase in 2020 is a consequence of the 4 254 ha planted by small-scale owners in 1992 (Figure 4-6) being harvested at age 28 years."

[Joshuatree]

Is that all it takes . Imagine being woken up at midnight and been told to leave port into that! Let alone the inefficiencies and costs!

http://www.stuff.co.nz/business/1140...-3040-per-cent (http://www.stuff.co.nz/business/114089504/port-taranaki-resembles-ghost-town-as-export-log-prices-drop-3040-per-cent) I didnt sight this one, its from over there.;)

Whats happened in taranaki with log prices down, a bit of a crisis.

[Wsp]

https://www.woodweek.com/#2

[Wsp]

Log market commentary is available here
https://nz.pfolsen.com/market-info-news/wood-matters/2019/july/log-market-july/

[RGR367]

Feels like it's not going great this IPO offer as ASB has been asked to bid and passing the offer to us.

[Joshuatree]

Log market commentary is available here
https://nz.pfolsen.com/market-info-news/wood-matters/2019/july/log-market-july/

Thanks WSP

"Activity in China traditionally picks up from September. History also tells us that in 2011, 2014, and 2015 the market rebound was relatively quick as shown in the Tauranga A-grade AWG price charted below. "
https://pfolsen.blob.core.windows.net/productionmedia/4945/taurangaportprice.jpg

[Balance]

Feels like it's not going great this IPO offer as ASB has been asked to bid and passing the offer to us.

Really?

Means what you wrote or Napier Port trying to spread the shareholding wider around NZ?

[trader_jackson]

Did a quick run on some key numbers (for me)... thought I would share...



Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019f
2020f
With forecasts (11 years)
Without forecasts (9 years)


Operating Income
$48,761
$54,131
$60,305
$62,097
$67,016
$72,053
$72,653
$86,679
$91,749
$97,358
$102,533
7.11%
7.42%


Operating Profit
$15,095
$18,771
$19,169
$19,711
$22,084
$22,150
$20,162
$26,265
$28,542
$30,548
$30,980
7.28%
7.96%


Net Cash Flows - Operating Activities
$14,040
$15,666
$17,830
$18,093
$23,378
$20,871
$23,125
$25,186
$28,364
$24,213
$29,945
7.88%
8.63%














Average % increase PA



Pretty solid, fairly consistent growth for Napier Port over the past 9 years, despite ups and downs in the logging market, PDS a bit conservative? (with growth rates lower in FY19 and FY20 than previous average between FY10 and FY18)... but as someone else on the upgraded place said, "if trader_jackson is investing in it, then it must be bad!" (or words to that effect)

[percy]

Thanks for your very informative post.

[winner69]

Good stuff t_j and thanks for sharing

Seems pretty consistent performance eh

[whatsup]

Feels like it's not going great this IPO offer as ASB has been asked to bid and passing the offer to us.

RGR, If that is the case, at what price would you tender for your shares $2.27 --$2.60 is quite a range for a book build ?

[RGR367]

RGR, If that is the case, at what price would you tender for your shares $2.27 --$2.60 is quite a range for a book build ?

Whatsup, I cannot answer you as I don't intend to participate as ports are not my type of investment. Sorry but GL to you and to others participating.

[Ggcc]

I have done some small amount of research and I think I should buy on market as I feel that Napier still needs to prove the expansion will not convert to extra unforeseen problems. I believe the expansion will cost more than they budgeted for, as most things in life things tend to cost more than budgeted. This is only my opinion and will see when the IPO happens.

[percy]

RGR, If that is the case, at what price would you tender for your shares $2.27 --$2.60 is quite a range for a book build ?

The trust I help out with, have tendered for 40,000 at $2.60 with Hobson Wealth.Going at the highest should mean there is no reason we miss out on price.I would expect the book build will come in a lot lower.
The ones I have asked Craigs for an allocation for both the wife and myself,no price has been discussed.

[RGR367]

The trust I help out with, have tendered for 40,000 at $2.60 with Hobson Wealth.Going at the highest should mean there is no reason we miss out on price.I would expect the book build will come in a lot lower.
The ones I have asked Craigs for an allocation for both the wife and myself,no price has been discussed.

Correct as ASB is just asking for the "level of interest expressed in New Zealand dollar terms" and of course your client number. So if they're successful to get some allocation, you'll have shares closest to the total amount of your interest. I'm sure ASB will get some as they're getting paid commission on it.
Again, I'm not expressing interest on it.

[Balance]

RGR, If that is the case, at what price would you tender for your shares $2.27 --$2.60 is quite a range for a book build ?

Have rang up ASB and asked to be included in their book build - good news as far as I am concerned as the final price will be determined by institutions anyway.

Always right to get hold of monopolistic infrastructure assets.

Still have my AIA IPO shares & enjoying fully imputed 22% pa dividend yield on my entry price. :t_up:

[sb9]

Another opinion piece..

Napier Port IPO — Shallow Waters or Deep Opportunity?

https://www.moneymorning.co.nz/napier-port-ipo-shallow-waters-or-deep-opportunity/2019/07/30/

[Joshuatree]

Thanks sb9 overpriced is the tenor .
"The IPO itself appears "to me to be a no-bargain. The key offer statistics suggests it will be priced within a P/E range of 22.7—26.0 (based on FY2020). With an implied cash dividend yield of 2.9%—3.3%.
He has a way with words too:)

"Sardines will appear as caviar."
"Fake boobs may fool a shallow glance."

[percy]

There appears to be two lines of thought.
Those who think they will get an allocation are keen,while those who realise they will not, think it is way overpriced.
No surprises here.

[SilverBack]

There appears to be two lines of thought.
Those who think they will get an allocation are keen,while those who realise they will not, think it is way overpriced.
No surprises here.

Not really. Any intelligent investor will invest based on the Prospectus and their assessment of forward prospects. This is not a cheap issue and I have decided not to participate but will track it instead. Probably the SP will increase initially, as people who missed out buy in and institutions/funds top up to meet their criteria. I perceive risks with the new wharf construction and use of the same, as has already been noted. The port's dependency on log traffic is also a concern given the depressed timber prices internationally at present. Previous experience indicates that foresters will hold back on felling trees and let the trees add volume rather than sell at low prices (a percentage at least). That will translate quickly into reduced log volumes at the port.

[nextbigthing]

Not really. Any intelligent investor will invest based on the Prospectus and their assessment of forward prospects. This is not a cheap issue and I have decided not to participate but will track it instead. Probably the SP will increase initially, as people who missed out buy in and institutions/funds top up to meet their criteria. I perceive risks with the new wharf construction and use of the same, as has already been noted. The port's dependency on log traffic is also a concern given the depressed timber prices internationally at present. Previous experience indicates that foresters will hold back on felling trees and let the trees add volume rather than sell at low prices (a percentage at least). That will translate quickly into reduced log volumes at the port.

Log prices might not be such an issue as large players harvest more to maintain profit apparently -

[SilverBack]

[QUOTE=nextbigthing;767053]Log prices might not be such an issue as large players harvest more to maintain profit apparently -

[percy]

Not really. Any intelligent investor will invest based on the Prospectus and their assessment of forward prospects. This is not a cheap issue and I have decided not to participate but will track it instead. Probably the SP will increase initially, as people who missed out buy in and institutions/funds top up to meet their criteria. I perceive risks with the new wharf construction and use of the same, as has already been noted. The port's dependency on log traffic is also a concern given the depressed timber prices internationally at present. Previous experience indicates that foresters will hold back on felling trees and let the trees add volume rather than sell at low prices (a percentage at least). That will translate quickly into reduced log volumes at the port.


Agree with your sensible post [and agree with my post too,]..

[bull....]

i reckon this will be massively over subscribed your be lucky to get many at all

[percy]

i reckon this will be massively over subscribed your be lucky to get many at all

Agreed.
I believe they will be included in the top 50,which will make things interesting.

[bull....]

Agreed.
I believe they will be included in the top 50,which will make things interesting.

could well be in time , if the expansion of the port solves the cruise ship issue they will attract more log vessels as the cost of port visits will fall.

[CC1]

Milford Blog: A closer look at Port of Napier’s IPO
https://milfordasset.com/insights/a-closer-look-at-port-of-napiers-ipo?utm_medium=email&utm_campaign=Blog%20A%20closer%20look%20at%20Port% 20of%20Napiers%20IPO&utm_content=Blog%20A%20closer%20look%20at%20Port%2 0of%20Napiers%20IPO+CID_74585fb0554825a658a4a033d9 adbb91&utm_source=Email%20marketing%20software&utm_term=Read%20More

[percy]

Milford Blog: A closer look at Port of Napier’s IPO
https://milfordasset.com/insights/a-closer-look-at-port-of-napiers-ipo?utm_medium=email&utm_campaign=Blog%20A%20closer%20look%20at%20Port% 20of%20Napiers%20IPO&utm_content=Blog%20A%20closer%20look%20at%20Port%2 0of%20Napiers%20IPO+CID_74585fb0554825a658a4a033d9 adbb91&utm_source=Email%20marketing%20software&utm_term=Read%20More
A good article.
Thanks for posting the link.

[Ricky-bobby]

Interesting, thanks for posting. What do u think of? The remaining $79m to $108m will be returned to the council to be recycled into other projects. Also just flew over it this arvo, looks like they have a container storage area by the airport. So limited for space at the port already?... I’m deciding if I will go for this or stick with established/proven POT. Torn....

[G on]

ASB minimum of $6500/2500 shares . $2.60 a share. I was only prepared to risk $5000.00 so will leave it.

[Joshuatree]

This most recent post from Snaps is really making me wonder about this iPO, (especially at $2.60:scared:)the timing does indeed look unfortunate and if correct is also not good for NZ corp. The link didnt work for me despite adding an n..

"5.0 Conclusions The Russian sawmilling industry has become more competitive since 2014 and now have a wider and diversified product line from a larger manufacturing base. As well, Russia is strategically placed within the Chinese government’s BRI initiative to take advantage of improved logistics costs to inland China. A weaker ruble has lower domestic log and operating costs, and coupled with major capital investments into logging, sawmilling, value-added processing and logistics, Russian mills should continue to gain lumber market share in China, especially as they increase their volume of kiln-dried and higher-grade lumber. Also, of note, Chinese mills on both sides of the Russian border are adding sawmill and value-added equipment to process Russian logs and produce higher value kiln-dried lumber that can be shipped much further afield. Furthermore, with FSC-certified timber and lumber, Russian producers are learning about the economic returns of providing customers with the sizes and grades of lumber they need/want — a big change from ten years ago. The simple fact is that Russia poses a growing threat to all other countries exporting lumber to China. The country’s influx of investment into forestry and sawmill capital improvements has greatly enhanced its cost-competitiveness, and it would be perilous to underestimate the extent to which this once-slumbering behemoth could rise to achieve global lumber dominance.

Full link is here........note this was in 2018 just before the pine epidemic took off in Europe and area of Russia"


file:///C:/Users/User/Downloads/spot...ew-zealand.pdf (file:///C:/Users/User/Downloads/spotlight-paper-impact-of-russia-china-lumber-trade-on-international-log-lumber-trade-and-implications-for-new-zealand.pdf)

[RTM]

Well I was from HB and am in. Not sounding as tho it will be a smooth start, but not intending to sell in the short term.....or even the medium term unless it goes really pear shaped. The trees will be harvested sooner or later, so eventually they will go through the port. Can’t see them being trucked to another one. Might have to be patient, hopefully rewarded with a decent dividend while we wait. Hope the construction of new facility goes well.
That’s all I want really, an appreciating asset with a growing dividend. And I’ll be happy. Fingers crossed.

[bull....]

Milford Blog: A closer look at Port of Napier’s IPO


https://milfordasset.com/insights/a-closer-look-at-port-of-napiers-ipo?utm_medium=email&utm_campaign=Blog%20A%20closer%20look%20at%20Port% 20of%20Napiers%20IPO&utm_content=Blog%20A%20closer%20look%20at%20Port%2 0of%20Napiers%20IPO+CID_74585fb0554825a658a4a033d9 adbb91&utm_source=Email%20marketing%20software&utm_term=Read%20More

good summary , glad someone else sees the potential for growth from the cruise ship issue.

[silverblizzard888]

Its an alright investment at a slight premium in current conditions, can't expand its business due to capacity constraints, but being an isolated area has a competitive advantage.
6 Wharf completion 2022, I'd say that would be when things get good for this stock, but before that its going to be a slow dividend earning stock for long term with limited growth and likely a stagnant share price.

[Balance]

http://www.scoop.co.nz/stories/BU1908/S00215/napier-port-ipo-final-price-set-at-260-per-share.htm

Price set at $2.60 - pretty impressive given the turmoil in the markets over the last few days!

[silverblizzard888]

http://www.scoop.co.nz/stories/BU1908/S00215/napier-port-ipo-final-price-set-at-260-per-share.htm

Price set at $2.60 - pretty impressive given the turmoil in the markets over the last few days!

Well I'd say the turmoil causes more demand for stable companies then.

[trader_jackson]

From what I heard, virtually nobody got any allocation unless you were a local, or part of the 10% that went to overseas insto's...
Would have been nice (and there was certainly demand to do so) if they had kept that 10% in NZ instead, but I suppose you have to keep the big boys happy.

[whatsup]

http://www.scoop.co.nz/stories/BU1908/S00215/napier-port-ipo-final-price-set-at-260-per-share.htm

Price set at $2.60 - pretty impressive given the turmoil in the markets over the last few days!

So that's the premarket price, ideas as to where it will trade on open day ?

[Balance]

From what I heard, virtually nobody got any allocation unless you were a local, or part of the 10% that went to overseas insto's...
Would have been nice (and there was certainly demand to do so) if they had kept that 10% in NZ instead, but I suppose you have to keep the big boys happy.

Just been advised by my broker that they bid aggressively for retail clients but have been scaled back to bugger all.

Will still get an allocation but not holding my breath that I will get more than 3% of what I bid for. :p

Got to keep the big boys happy as they are the ones to provide stag opportunity - give them too little and they sell out (as in Contact Energy), give them too much and they don't buy more on market.

[pierre]

Just been advised by my broker that they bid aggressively for retail clients but have been scaled back to bugger all.

Will still get an allocation but not holding my breath that I will get more than 3% of what I bid for. :p

Got to keep the big boys happy as they are the ones to provide stag opportunity - give them too little and they sell out (as in Contact Energy), give them too much and they don't buy more on market.

As a local I get a guaranteed $10k worth (3,846 shares). It will be interesting to see what scaling is applied to the extra $$ that I applied for.

[Joshuatree]

Taken up some (indirectly) but its with a mindset of somewhere to park some cash and hold longer term with not a lot of conviction or $pine ca t ching thrills.

[Joshuatree]

Although it prob will trade well initially as ASB have also said it was heavily scaled back , sought after.

[Lola]

Although it prob will trade well initially as ASB have also said it was heavily scaled back , sought after.

agree,,,then it depends on what the Germans do. If or when our currency goes south then stand back.

[Joshuatree]

ASB only got 5% of what they requested btw.

[Balance]

ASB only got 5% of what they requested btw.

So if one bids for 10,000 shares, one would get 500 shares (all things being equal)!

[trader_jackson]

So if one bids for 10,000 shares, one would get 500 shares (all things being equal)!

Minimum was 2500 shares I believe (for non local), so if you were with, say ASB (and not a local or employee etc), you would need to have bid for 50,000 shares at $2.60 worth in order to get 2500 shares...
I wish I had known this and I would have added a few 0's to my bid

[macduffy]

Minimum was 2500 shares I believe (for non local), so if you were with, say ASB (and not a local or employee etc), you would need to have bid for 50,000 shares at $2.60 worth in order to get 2500 shares...
I wish I had known this and I would have added a few 0's to my bid

That's as I understand it, too. Needless to say, I missed out - but not too concerned.

[Balance]

Minimum was 2500 shares I believe (for non local), so if you were with, say ASB (and not a local or employee etc), you would need to have bid for 50,000 shares at $2.60 worth in order to get 2500 shares...
I wish I had known this and I would have added a few 0's to my bid

Haha - would certainly be exercising the minds of the ASB allocators!

Does that mean that anyone who bid for less than 50,000 shares get nothing - unless the allocators decided to show favouritism?

[Baa_Baa]

Haha - would certainly be exercising the minds of the ASB allocators!

Does that mean that anyone who bid for less than 50,000 shares get nothing - unless the allocators decided to show favouritism?

Shows how desperate the market is for decent listings, or any listings.

Plenty of money sloshing around looking for a home but so few opportunities. Napier ports looks like a setup for a stag on disappointed buyers ramping the SP on IPO. If you can get some early on market, but who’s selling?

This one we can put down to entertainment value, pour a beer, pop some corns and enjoy the show.

[Joshuatree]

Yep i too got nothing from ASB, our Estate though got a reasonable allocation from Craigs.

[pierre]

As a local I get a guaranteed $10k worth (3,846 shares). It will be interesting to see what scaling is applied to the extra $$ that I applied for.

The extra I applied for over $10k was scaled down by 90%.
Obviously pretty heavy demand so there's sure to be SP action on opening day.

[Balance]

The extra I applied for over $10k was scaled down by 90%.
Obviously pretty heavy demand so there's sure to be SP action on opening day.

That's better than ASB being scaled back 95%!

So all power to Napier Port for looking after locals. :t_up:

[bull....]

it was pretty obvious it was going to be a red hot ipo even with those negative postings about it on the other forum. anyway what happened to the other forum?

[Joshuatree]

Im guessing its in trouble after the owner of it may have been masquerading on here as devotee but actually undermining posters and then inviting them over there or something like that.

[percy]

Thank you Craigs for giving both my wife and myself generous allocations.

[Baa_Baa]

Thank you Craigs for giving both my wife and myself generous allocations.

Full service brokers are essential in circumstances like this, Craigs done a great job for their clients.

[EighthWonder]

Do brokers charge a fee or percentage for the allocations?

[Joshuatree]

No they don't .

[Balance]

No they don't .

Paid by IPO company.

[Balance]

Thank you Craigs for giving both my wife and myself generous allocations.

Great to hear they take care of good clients! :t_up:

[glennj]

Unfortunately I didn't have a relationship with Craig's or the Co managers of the issue so only got the double minimum firm allocation equating to 5000 shares. This was less than 20% of what I was prepared to spend. Depending on how richly priced the shares get on listing I will pick up more.

[herbert240]

Unfortunately I didn't have a relationship with Craig's or the Co managers of the issue so only got the double minimum firm allocation equating to 5000 shares. This was less than 20% of what I was prepared to spend. Depending on how richly priced the shares get on listing I will pick up more.

You did alright. I got zilch from my broker Chris Lee and wife who has a portfolio managed by Craigs didn't get offered any either

[bohemian]

I have also just received a generous allocation from Craigs too. I will be taking them all.

[percy]

You did alright. I got zilch from my broker Chris Lee and wife who has a portfolio managed by Craigs didn't get offered any either

Sign in,as I have just sent you a PM.[personal message].

[Lewylewylewy]

Given that a lot of punters signed up and got locked into this during a time of more positive market sentiment, and by the time they float sentiment has fallen into the negative, I think many folk could be jumping to get out as soon as these reach the second hand market.

Especially because many punters may be more amateurish due to the way these were advertised via non stock focused channels, and the everyman seems to be reading lots of bad stuff about the share market at the moment.

[percy]

Given that a lot of punters signed up and got locked into this during a time of more positive market sentiment, and by the time they float sentiment has fallen into the negative, I think many folk could be jumping to get out as soon as these reach the second hand market.

Especially because many punters may be more amateurish due to the way these were advertised via non stock focused channels, and the everyman seems to be reading lots of bad stuff about the share market at the moment.

I don't think punters would have managed to get many shares,as investors seemed to get first preference,
POT and SPN held up well today, as did other infrastructure shares, such as SPK,AIA and the power companies,so perhaps they will list at a good premium.?

[Joshuatree]

Any port in storm springs to my mind.Berth your cash here.

[NZSilver]

To right JT, you can't really beat infrastructure in a downturn. Characteristics such as a huge moat & reliable cash generation due to it being necessary service. Might go up/down a bit, have the odd average year, however, long-term it's a no-brainer. Ideally yield would be better but probably more capital growth in this business than some other infrastructure companies due to potential expansion. It will be a set and forget investment for me. I secured a few, would have liked more. Will buy some more A2 instead, heaps of value there at current price.

[NZSilver]

I believe most employees bought shares,that will probably have an boost to the bottom line now they have skin in the game.

[RTM]

I believe most employees bought shares,that will probably have an boost to the bottom line now they have skin in the game.

Does anyone know what the ticker will be for these shares ?
I think they list tomorrow. Can't recall seeing it anywhere.
Thanks
RTM

[Frostyb0y]

It is a footnote in the prospectus. It will be NPH (for Napier Port Holdings).

[RTM]

Thanks !
I did read some of the foot notes...obviously not all.

RTM

[Sgt Pepper]

Thanks !
I did read some of the foot notes...obviously not all.

RTM

Port Otago the next listing me thinks.

[ratkin]

In terms of investing what is the advantage of diving into Napier shares tomorrow ?
They seem very exposed to logs into China, seems to make up more than half their trade. They do not look particularly cheap and the isolation of the port makes it difficult to diversify much.

why not just wait for the correction, or buy into an existing port instead? Or is it just the case of a shiny new toy? that will be snapped up at any old price.

[Ggcc]

In terms of investing what is the advantage of diving into Napier shares tomorrow ?
They seem very exposed to logs into China, seems to make up more than half their trade. They do not look particularly cheap and the isolation of the port makes it difficult to diversify much.

why not just wait for the correction, or buy into an existing port instead? Or is it just the case of a shiny new toy? that will be snapped up at any old price.
I would wait until the honeymoon period finishes. Or unless lower than $2.60. I agree too many uncertainties as well. I have been told by someone that the logs are stagnant until prices rise. That come up from hearsay and not from actual port sources

[pierre]

Just for fun (or a self-purchased chocolate fish) have a punt at Tuesday's closing price for NPH.
My guess is $2.79.

[Balance]

Just for fun (or a self-purchased chocolate fish) have a punt at Tuesday's closing price for NPH.
My guess is $2.79.

The word is - $2.90 with heaps of institutional buying.

[ratkin]

Just for fun (or a self-purchased chocolate fish) have a punt at Tuesday's closing price for NPH.
My guess is $2.79.


Will guess 3.10

[kiora]

Trucks are lining up still & logs are rolling in.$3.15

[trader_jackson]

Just for fun (or a self-purchased chocolate fish) have a punt at Tuesday's closing price for NPH.
My guess is $2.79.

$2.99 :t_up:

[glennj]

Regarding existing forests within the orbit of Napier Port; dips in export prices may see a deferral of harvest but you are unlikely to see a significant volume transferred from export to domestic consumption. The percentage that was going to be exported via Napier is still likely to be exported via Napier but some of it once prices lift. Forest companies can leave trees in the ground to grow longer but for a number of reasons don't like stretching this out too far as beyond a certain age annual increment per hectare per year starts to decline. Secondly forest companies need a certain amount of cash flow and need to maintain a foothold in some markets so will still put some volume in to export markets even when prices are down. Not to mention a desire to keep their best harvesting crews employed and working for the company even when export prices dip. (I was a manager of various Hawkes Bay forests in a former life)

[percy]

NPH start trading at 11.30 am today.
Price ?..

[Ggcc]

NPH start trading at 11.30 am today.
Price ?..
Like most hyped up IPOs it will finish $2.80-2.85 for today and higher later in the week. Then after the first month or two after the hype it will slowly drop back to $2.60-$2.70 and hopefully lower.

[RTM]

One part of me wants it to go higher as I got some. And the other part that wants more wants it to drop. In the current low interest rate environment I think it should go higher, even though the projected dividend is not high.

I'm picking $3.12

[bull....]

2.80+ with strong demand

[ratkin]

Looking like well over 3.00 too rich for my blood. Chances are they will be available cheaper in October

[Balance]

Looking like well over 3.00 too rich for my blood. Chances are they will be available cheaper in October

Early days yet - real action starts 2 minutes before 11.30 am

[Ggcc]

Looking like well over 3.00 too rich for my blood. Chances are they will be available cheaper in October
The will get cheaper in October. DYOR of course, but I will not invest at these levels, without assurances that things are honky dory

[pierre]

Just for fun (or a self-purchased chocolate fish) have a punt at Tuesday's closing price for NPH.
My guess is $2.79.

First sale at 291.

[ratkin]

Grabbed a few at 2.91 will top up at some future point

[bull....]

new s/h have done really well with this listing. might go over 3 today what ya reckon

[Ggcc]

new s/h have done really well with this listing. might go over 3 today what ya reckon
If not today by the end of the week absolutely. I will wait to catch when the hype becomes less. Great longterm hold, but hyped up entry price

[percy]

Profit [not realised] on our NPH allocation,means I will be able to pay Craigs' brokerage for a few years.Thanks Craigs for our generous allocations.

[bull....]

If not today by the end of the week absolutely. I will wait to catch when the hype becomes less. Great longterm hold, but hyped up entry price

$3 now maybe 3.50 by the end of the week lol remeber pe of pot is 40 odd so comparison pe of nph is cheap eh

[RTM]

Profit [not realised] on our NPH allocation,means I will be able to pay Craigs' brokerage for a few years.Thanks Craigs for our generous allocations.

Good post Percy, shows the value of spending some money with Craigs. Pleased they have looked after you.
Cheers
RTM

[ratkin]

Sellers will probably dry up before buyers so should only go higher from here

[Ggcc]

$3 now maybe 3.50 by the end of the week lol remeber pe of pot is 40 odd so comparison pe of nph is cheap eh
Who knows. Great for holders of this share for now, but until a proven record with increased capacity goes well who knows what the future brings. Have they already got resource consent to expand? Some are worried what could happen with Westshore Erosion.

[bull....]

seems the doom merchants going on about log slump would affect the port are wrong to date

Dawson told the Herald there had been no drop off in log volumes going through the port and that log traders had reported a bottoming out of prices.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12260085

[trader_jackson]

$2.99 :t_up:

Well I was fairly close... about 1% off... closing price was $2.95, VWAP was also similar

So 200m shares issued, 90m of them were on offer, and 16.1m of them have changed hands today? Amazing to see 18% of shares sold during the IPO process (and over 8% of the total shares on issue) have changed hands today... that's a pretty high amount isn't it?

[peat]

until a proven record with increased capacity goes well who knows
yeh its all about the management deserving what is a pretty high multiple

[EighthWonder]

I’m from a property background and being able to invest in the IPO today taught me a few things. Shares are a lot more fun!
I was getting my information from the NZX website and from yahoo finance eventually but found ASB Securities the best through the depth tab.
I am very surprised in the lack of financial education in New Zealand, when I mention IPO most peoples eyes glaze over. There is next to no coverage on the news and although these shares were popular New Zealand has so much potential if people invest more in the share market long term instead of those bank term deposits. Just some food for thought, well done to all those who were in today and all the best for holding for the years to come. :)

[Airw0lf]

I’m from a property background and being able to invest in the IPO today taught me a few things. Shares are a lot more fun!
I was getting my information from the NZX website and from yahoo finance eventually but found ASB Securities the best through the depth tab.
I am very surprised in the lack of financial education in New Zealand, when I mention IPO most peoples eyes glaze over. There is next to no coverage on the news and although these shares were popular New Zealand has so much potential if people invest more in the share market long term instead of those bank term deposits. Just some food for thought, well done to all those who were in today and all the best for holding for the years to come. :)

One of the issues for a start is the tax advantages to investing in rental properties and the perception that housing is "safe," especially among those who hear horror stories of the 1987 crash, etc. I am a firm believer in our taxation settings favouring property investment being a major deterrent to investment in the share market. This in turn robs growing companies of capital and our economy is poorer for it. Yes, some of the very good firms can go overseas for funding/to list publicly but this is not ideal either as the fundraising costs for the firm will be higher and the shareholders benefitting from the company's success are likely to be non-NZers.

[NZSilver]

Can you explain the tax advantages?

[Cynic]

Can you explain the tax advantages?

It's part - tax, part gearing. Our bank environment means you can comfortably gear property investments at 60%+ (at very attractive rates relative to other borrowing), and then our tax law means you can offset these interest costs against rental income, which results in minimal if any tax on income (as opposed to company dividends which are taxed at your personal rate)

So while property is inhererently less productive, and has ungeared expected returns of say 6% (2-4% net rental yield after all operational costs, +2-4% capital growth), and shares are more like 8%, after gearing and paying less tax on income you can end up better off

[EighthWonder]

Can you explain the tax advantages?

Would most likely lie with being able to claim back on the leverage. Not so sure you could do this as effectively with margin loans but the risk outweighs the tax advantages.

[Lewylewylewy]

Except for ipo's, the stock market is a second hand market. The companies get nothing for these shares price or trades. Ipo's I've seen seem to get filled with current demand levels. Also, people just chucking their money in the bank or deposits on mortgages enable banks to invest in the stock market. So, aside from people not getting the gains they should from their bank and kiwisaver accounts, I don't think it's too damaging for the economy :)

[percy]

NPH is trading at $3.08 at present,up 18.46% on its issue price of $2.60.....

[macduffy]

A bi off track there. Lewy. For a start, banks don't invest in the stockmarket, their wealth management or Kiwisaver subsidiaries do, on investors' behalf; their nominee subsidiaries might, on customers' behalf.

[Ggcc]

NPH is trading at $3.08 at present,up 18.46% on its issue price of $2.60.....

It has been said before that I feel that NPH is now overpriced for the short term. Great for holders!! I hope to get on board at $2.90 or lower which I do believe it will go in a couple of months.

[King1212]

That what my thoughts on AIA and POT.... overpriced but the price is kept raising up na d up..

[bull....]

NZ log export prices bottom out after slump
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12261667

[Ggcc]

That what my thoughts on AIA and POT.... overpriced but the price is kept raising up na d up..
We might see a little pull back to the $2.90-$3 in the coming month. I will look at buying if the price goes lower than the $$2.90 and the fundamentals look good for the future.

[Independent Observer AUNZ]

Looks like the instos have eaten up all of the retail supply.

Yep. Looks like a bubble to me. Time will tell.

[bull....]

Looks like the instos have eaten up all of the retail supply.

the doubters are in hiding . cause the share price is going gang busters. ipo price was a steal

[Ggcc]

the doubters are in hiding . cause the share price is going gang busters. ipo price was a steal
Or was it...... only time will tell. It is a great company, but I won’t be buying at these prices. POT is now a steal in comparison to these prices.

[bull....]

Or was it...... only time will tell. It is a great company, but I won’t be buying at these prices. POT is now a steal in comparison to these prices.

how ya figure pot pe is 43 and nph is no where near that. div yields are comparable and i would argue nph has more growth potential in the naer term

[Ggcc]

Napier had proposed dividend of 2.9-3.3% dividend planned for 2020 fully imputed, so higher in total, based off a $2.60 price. I am guessing that now almost 22% increase in capital value will decrease the value of your dividend by 22%, down to $2.26-2.57%. POT is 2.87%..... I am only comparing dividend yield until I see how well they stand in their earnings. Well done to holders so far, but there are better shares to purchase at these prices I feel. Of course DYOR

[bull....]

new highs again today

[Leemsip]

$3.27 is a nice 25% increase.
reckon the trade talks USA/China have a bit of good news left to run, so Im holding out for an even more crazy $3.50 before selling up.

[Leemsip]

I have vast experience with selling too early and missing out on the big push to the top, so trying to hold out.

[percy]

NPH trading at $3.37 today,up an incredible 29.61% on issue price.

[bull....]

NPH trading at $3.37 today,up an incredible 29.61% on issue price.

riding high , or is that higher just like pot. pe of 50 might be appropriate in this environment?

[percy]

riding high , or is that higher just like pot. pe of 50 might be appropriate in this environment?

????????????? Incredible. ?????????????????????
I must admit if I had not brought at IPO I would not be buying today.

[ratkin]

Mixed feelings, bought half intended amount on first day, was hoping to buy more when the hype died away.
Trouble is it hasn't . So much for buying more in October

[Leemsip]

Anyone else looking to sell up.? $3.50 this week seems extreme

[King1212]

The question is where are u going to put the money once u sold? With interest rate below 3%... residential houses are all above $100k of council valuation. Other companies are all over valued ...at least NPH is still under 1b cap market n has a lot assets n half own by local government. ...

[glennj]

Mixed feelings, bought half intended amount on first day, was hoping to buy more when the hype died away.
Trouble is it hasn't . So much for buying more in October

I'm in a similar position. Only got 10k shares in IPO a fraction of what I wanted. Bought 20k shares on market around start of trading and still want more but am not prepared to pay current prices.

[bull....]

port of tauranga pe 43 , nph not near that yet. i consider nph has more near term growth than pot

[RTM]

I'm in a similar position. Only got 10k shares in IPO a fraction of what I wanted. Bought 20k shares on market around start of trading and still want more but am not prepared to pay current prices.

Same. $12K of shares.
The first reporting period (is it Dec, can't read the announcement ?) might be an opportunity should the log turn down being bandied around at IPO time hit them hard.
Not overly hopeful tho.

[bull....]

everything honk dory at the port even new highs today

Napier Port - 2019 trade volumes in line with forecastshttps://www.nzx.com/announcements/343139

[winner69]

Log volumes doing very well according to the report from them the other day

Looks like all the gloom about exposurevto logs was not warranted

[percy]

Log volumes doing very well according to the report from them the other day

Looks like all the gloom about exposurevto logs was not warranted

The very loud prophets of doom on FP, certainly talked themselves out of a very nice 33.8% gain on NPH's IPO price.
At times investors have to ignore the noise.

[winner69]

The very loud prophets of doom on FP, certainly talked themselves out of a very nice 33.8% gain on NPH's IPO price.
At times investors have to ignore the noise.

Yep ignoring the noise is good tactic

And not believing much of what you read in the media is also a good tactic

[Ggcc]

It has been good to see the short term ceiling has been hit so far. Congratulations to holders so far on a fantastic listing. I do want this share and will look into it as longterm hold, but not at these prices when there is a lot of headwind coming (as in money spent towards expansions). I wait for the future and hope in the short-term to get in around $2.80-$3 as long as the story is a good story. I maybe dreaming of course in some peoples eyes, but then OCA was a steal at $1 and it went back there after a long time.

[Joshuatree]

The very loud prophets of doom on FP, certainly talked themselves out of a very nice 33.8% gain on NPH's IPO price.
At times investors have to ignore the noise.

Yeah Snapiti was relentless in his negativity in an authoritative manner(I know people in the industry etc). My memory of him on here was very different, i appreciated his being here so am at a bit of a loss how he called it so wrong ATPIT.

[bull....]

Contract to Build 6 Wharf Signedhttp://www.scoop.co.nz/stories/BU1911/S00188/contract-to-build-6-wharf-signed.htm

[trader_jackson]

https://www.nzx.com/announcements/344465

I remember the days when we were told by some on here that Napier port was an absolute no go as log prices were going to crash the growth story... seems like that didn't eventuate and the results are (literally) a record on many accounts...

[NZSilver]

Very tidy result. Strong cashflows. Solid long term asset with growth aspirations. No worries re logs, the wall of wood is coming and they have to be cut with only a few years of leeway.

[bull....]

good result and heres novembers log report

Export demand for logs in November rose along with prices

https://www.interest.co.nz/rural-news/102623/export-demand-logs-november-rose-along-prices-prices-are-still-below-their-2-year

[Lewylewylewy]

Govt stats today show log prices down about 8% if i remember correctly

[winner69]

Govt stats today show log prices down about 8% if i remember correctly

...but export volumes are still pretty good

[Lewylewylewy]

I recall talking to the owner of a loading company working at the pot after the gfc. He was saying that business went well during the gfc because demand actually picked up due to low prices. Not expected. However, this time the price is reportedly surpressed due to lower demand.

... but hey, who knows. Always worth holding good companies, especially when they're important infrastructure backed by invested government.

[bull....]

hitting new highs again , probably on the back of improving log prices

[dreamcatcher]

hitting new highs again , probably on the back of improving log prices

And may it continue onwards through 2020

[percy]

hitting new highs again , probably on the back of improving log prices

Enjoying the ride.
Thought they may settle around $3.00,so am pleasantly surprised.

[kiora]

The wharves are super chocca with logs ATM

[bull....]

The wharves are super chocca with logs ATM

yep theres still a wave of logs to come . and i dont believe the russian rail line to china will have much impact on nz exports

[percy]

Meeting speeches/presentations read well.
A big year and a sense of excitement for the future.

[whatsup]

Great company and the best IPO for a long time, well done all holders.

[RTM]

Great company and the best IPO for a long time, well done all holders.

Remember all the doom and gloom around IPO time with respect to log prices and logs to China via Russia ? Etc etc ?
Pleased I stuck to my guns and got what I could....as always...wish it was more.

[Blue Skies]

Apart from the obvious the IPO price was set too low, why is the SP now approx 30% above the IPO when the NPAT is only 3.2% above forecast, & is it deserved ?

[kiora]

Apart from the obvious the IPO price was set too low, why is the SP now approx 30% above the IPO when the NPAT is only 3.2% above forecast, & is it deserved ?

IPO was not obviously set too low.I came close to not taking any up.I would suggest its just the period we are in.
Compare it to IPO of gentaliers.How long will it all last?Maybe a long time
FOMO seems to be driving up all stock valuations lately.Particularly high Q stocks.Just look at FPH ???
https://finance.yahoo.com/news/billions-flow-back-into-stocks-as-investors-fear-missing-out-on-the-next-rise-in-stocks-130538369.html

[Blue Skies]

IPO was not obviously set too low.I came close to not taking any up.I would suggest its just the period we are in.
Compare it to IPO of gentaliers.How long will it all last?Maybe a long time
FOMO seems to be driving up all stock valuations lately.Particularly high Q stocks.Just look at FPH ???
https://finance.yahoo.com/news/billions-flow-back-into-stocks-as-investors-fear-missing-out-on-the-next-rise-in-stocks-130538369.html


Thanks Kiora, am just trying to work out if I've left it too late to get in, or if this time next year I'll regret it if I don't.
Just comparing it with POT, it has a PE of 110 V POT on 51. How does that work! (i.e. what explanation)

[Sgt Pepper]

Thanks Kiora, am just trying to work out if I've left it too late to get in, or if this time next year I'll regret it if I don't.
Just comparing it with POT, it has a PE of 110 V POT on 51. How does that work! (i.e. what explanation)

Dont forget it is possible Port Otago will decide to list next year

[macduffy]

Apart from the obvious the IPO price was set too low, why is the SP now approx 30% above the IPO when the NPAT is only 3.2% above forecast, & is it deserved ?

I would think that a large part of it is due to the bullish market conditions since the IPO. That, and a bit of enthusiasm for port stocks generally, kindled by talk of moving POT, not that Napier will benefit directly from that!

[peat]

MacDuff, did you mean moving 'POA' ?

[macduffy]

MacDuff, did you mean moving 'POA' ?

Yes, indeed!

Must be showing my long-felt regret of never buying POT!
:(

[Balance]

---$4.00---

Makes MMH an absolute bargain at $7 :t_up:

[kiora]

Its really like just winning lottery.A game of chance.Must be in to win !

[bohemian]

Actually it feels like winning the lottery day after day after day.

[King1212]

The problem is lacking of shares available.... half owned by council... quarter owned by iwi..local and employees... fundies....so that why the SP goes up . ...high demand low supply....they might split the shares in 2 or 4

[ratkin]

Up another 7% it madness. Surely more to do with constrained supply than fundamentals.
the council will be kicking themselves for letting it go so cheap, even if the list price did reflect the actual worth.

[Blue Skies]

Jeepers, with it's geographical constraints on growth (area served) & dependence on continued strong demand for logs from China (product mix) , making POT look like a bargain ?

[Ggcc]

Up another 7% it madness. Surely more to do with constrained supply than fundamentals.
the council will be kicking themselves for letting it go so cheap, even if the list price did reflect the actual worth.
I say well done to holders but I will not be buying at these prices. Don’t feel sorry for me though for missing out as the majority of my shares are in Retirement stocks.

[King1212]

Never feel sorry for u anyway...u always in delusion with the SP too high ...just like PPH...missed the boat again...

[Ggcc]

Never feel sorry for u anyway...u always in delusion with the SP too high ...just like PPH...missed the boat again...
Hey but I feel sweet with over 40% gain in my portfolio in 12 months

[percy]

And to think I thought I was the "biggest fool" by hanging onto our holdings after they hit my target price of $3.10.
Now I really have no idea what NPH [or POT] are really worth,but am loving the NPH ride.!.

[dreamcatcher]

And to think I thought I was the "biggest fool" by hanging onto our holdings after they hit my target price of $3.10.
Now I really have no idea what NPH [or POT] are really worth,but am loving the NPH ride.!.

Shortage of stock will push this $5 ++ and understandable as there's not many willing sellers

[Leemsip]

I'm out at $4.22 this morning. Insane price imo and would be gutted if I missed selling. If it goes to $5 I'll be flabbergasted

[Ggcc]

I'm out at $4.22 this morning. Insane price imo and would be gutted if I missed selling. If it goes to $5 I'll be flabbergasted
Might be the best decision, it may not. I’m happy it has gone nothing but north for holders. There have been lots of things that people have worried about in regards to inflated share prices.

The nzx is full of them. There are some worries in the US

https://www.ccn.com/dows-sudden-200-point-plunge-echoes-growing-concerns-about-stocks/

Luckily I have been buying since 2010

[King1212]

Dow down 200points...they called it recession...Dow up 200points they said stocks overbought...what the hell....

Share market....no one can predict. Lacking of good NZ companies with hard assets n infrastructure..that made Napier port expensive....with low interest in 2020...that will certainly make the assets go further

[King1212]

Ops...DOW up 185points today.....

[Blue Skies]

Some of the euphoria around the share price evaporating & some sanity starting to appear. Got to have some reasonable relatively to POT which obviously a miles larger & more established & successful operation.

[dreamcatcher]

Some of the euphoria around the share price evaporating & some sanity starting to appear. Got to have some reasonable relatively to POT which obviously a miles larger & more established & successful operation.

Still does not solve the problem of shortage-of-stock and currently looks (to me) as if someone is more interested in buying then selling.
POT was split previously making more stock available but SP continues upwards and looking back POT has been a sell/reduce from $4.05

[Leemsip]

Might see some buying pressure if nph gets into the nzx50. Regardless of metrics. Hopefully this puppy heading down to my $3 buy price. Looong way to go

[King1212]

It does not look like going to be $3 ish for long time....plenty of interest in such a good infrastructure company...hoping they could split the share this year to boost up the shares

[King1212]

Well done for those selling at peak! We might see...sp back to $3?

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12305365

[King1212]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12305292

[Southern_Belle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12305292 logs were in a bad way prior to the coronavirus outbreak.

I have a family member who drives a logging truck told me last night he has 1 months work left carting export logs to be wood chipped in New Zealand because China has stopped taking logs.

The reason they were given is not wanting to spread the virus via the ships travelling from China to New Zealand

[Leemsip]

Not much movement despite the Gizzy port news. This stock seems pretty bullet proof. Would have thought 20% fall from Corona Virus. Still insane PE multiple.

[glennj]

logs were in a bad way prior to the coronavirus outbreak.

I have a family member who drives a logging truck told me last night he has 1 months work left carting export logs to be wood chipped in New Zealand because China has stopped taking logs.

The reason they were given is not wanting to spread the virus via the ships travelling from China to New Zealand

That reason sounds somewhat spurious to me. I read elsewhere that there may be trade implications in relation to travel restrictions NZ imposed on those travelling from China. The real reasons will no doubt come out in the wash with time!

[Sideshow Bob]

I read elsewhere that there may be trade implications in relation to travel restrictions NZ imposed on those travelling from China. The real reasons will no doubt come out in the wash with time!

The election date has been announced. :sleep: So at the moment govt worried about that and keeping Winnie on side, they'll deal with China if/when they get re-elected.....

[King1212]

https://www.nbr.co.nz/story/coronavirus-hits-forestry-industry-crews-stood-down

[percy]

logs were in a bad way prior to the coronavirus outbreak.

I have a family member who drives a logging truck told me last night he has 1 months work left carting export logs to be wood chipped in New Zealand because China has stopped taking logs.

The reason they were given is not wanting to spread the virus via the ships travelling from China to New Zealand

Thanks for the "heads up".
I sold our holdings yesterday morning for average $3.745.

[King1212]

Will we see under $3 soon?

[bull....]

read this on the forestry very real bad situation

http://www.gisborneherald.co.nz/frontpage-featured/20200204/the-perfect-storm-exporters-stop-buying-wood/

[King1212]

God....then cruise ships are nervous too to dock due to global quarantine...

[ratkin]

God....then cruise ships are nervous too to dock due to global quarantine...

The Two cruise ship quarantines will have a huge impact on sentiment for those considering a cruise. The thought of being confined to a windowless cabin for Two weeks would be enough to give potential holidaymakers nightmares.

[winner69]

The Two cruise ship quarantines will have a huge impact on sentiment for those considering a cruise. The thought of being confined to a windowless cabin for Two weeks would be enough to give potential holidaymakers nightmares.

.....and you’d probably get norovirus as well