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Thread: Napier Port IPO

  1. #51
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    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.

  2. #52
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    Yes getting an allocation will be hard.
    Don't think too many people will turn their "firm" broker allocation down.

  3. #53
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    Quote Originally Posted by trader_jackson View Post
    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.

  4. #54
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    Quote Originally Posted by theace View Post
    Are non-Napier residents able to apply? And if yes, how/where? TIA.
    Fixed it for you.

  5. #55
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    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.

  6. #56
    The past is practise. Vaygor1's Avatar
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    Attachment 10688
    ______________________________

  7. #57
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Vaygor1 View Post
    Attachment 10688
    ______________________________
    That’s pretty cool mate
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  8. #58
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    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.

  9. #59
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    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.

  10. #60
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    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

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