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?
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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?
Do you know who is participating in the IPO? can we get a slither through ASB/ANZ?
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
Does anyone have any up to date info re the above IPO. Heard a whisper maybe next month.
Step right up
https://www.nzherald.co.nz/business/...ectid=12244211
I gave Craigs my expression of interest a few weeks ago.Look forward to reading the prospectus.
Boats usually come with cranes.
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...
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 aHon Rick BarkerbeingChiefCrown Negotiatorwith theMinister for Treaty of Waitangi.
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
The brokers sound like, Craigs, Forsyth Barr and JB Were. Forsyth Barr have decent exposure in the Hawkes Bay.
heres the link
https://www.afr.com/street-talk/napi...0190627-p521r4
pot trading at pe of 44 so plenty of upside a lol
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
This could be the next one on the block....
https://www.odt.co.nz/business/owner...napier-listing
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
I think part ipo you have to factor the massive demand that will push the price up. Market sentiment will be huge imo
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.
https://www.napierportshareoffer.co....-Offer%2f#open
Only for napier residents
Does anyone have estimates of share price this could attract once listed??
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.
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
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.
seems fairly priced for the times. probably be huge demand because of the current climate for infrastructure type stocks i imagine
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.
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
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.
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.
JT - time to install that update that’s ready methinks
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 .
9/7/19
Log price slump catches industry unawares | Stuff.co.nz To all the plaglarisers out there :) and hi snaps hope you and familiars are all well.;)
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.
Yes getting an allocation will be hard.
Don't think too many people will turn their "firm" broker allocation down.
BROKER FIRM OFFER
The 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 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.
Attachment 10688
______________________________
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.
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.
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
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
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."
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 I didnt sight this one, its from over there.;)
Whats happened in taranaki with log prices down, a bit of a crisis.
Log market commentary is available here
https://nz.pfolsen.com/market-info-n...g-market-july/
Feels like it's not going great this IPO offer as ASB has been asked to bid and passing the offer to us.
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.ne...aportprice.jpg
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)
Thanks for your very informative post.
Good stuff t_j and thanks for sharing
Seems pretty consistent performance eh
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.
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.
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:
Another opinion piece..
Napier Port IPO — Shallow Waters or Deep Opportunity?
https://www.moneymorning.co.nz/napie...ty/2019/07/30/
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."
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.
[QUOTE=nextbigthing;767053]Log prices might not be such an issue as large players harvest more to maintain profit apparently -
i reckon this will be massively over subscribed your be lucky to get many at all
Milford Blog: A closer look at Port of Napier’s IPO
https://milfordasset.com/insights/a-...rm=Read%20More
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....
ASB minimum of $6500/2500 shares . $2.60 a share. I was only prepared to risk $5000.00 so will leave it.
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
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.
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.
http://www.scoop.co.nz/stories/BU190...-per-share.htm
Price set at $2.60 - pretty impressive given the turmoil in the markets over the last few days!
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.