Stocks

Kiwi Property Group shares slipped after delivering their 2023 half year result. KPG reported net loss came in at -$151.1m, due to incurring a non-cash revaluation loss of its portfolio of $213.3m, which was flagged earlier reflecting higher interest rate environment softening cap rates on investment properties. Net tangible asset fell from $1.45 down to $1.31, with KPG trading at a large discount to account for further weakening over the near-term which appears likely.

Fisher & Paykel Healthcare shares are up +16% a week after it reported revenue of $690.6m for the six months ended 30 September 2022, above the $670m forecast by the company in August. Revenue was down -23% from the previous corresponding period, but up by +21% on the comparable pre-pandemic period.  

Macquarie Group have recovered strongly since bottoming out to fresh 12-month lows in October, and have continued to trade higher after reporting an interim half-year net profit of $2.3 billion, which is a -13% decline on its previous half-year period, but +13% percent higher than the half-year profit it reported this time last year – benefits of its diversified source of earnings helping a lot within a challenging environment. Looking forward, Macquarie Chief Shemara Wikramanayake said the company would maintain “a conservative approach” but was on the lookout for investment opportunities for its $30 billion in “dry powder”.

We initiate coverage of Home Depot with a HOLD rating. The company is engaged in selling home building, hardware and DIY supplies to both professionals and retail consumers. The company maintains +2,300 stores (vs. +1,700 for its largest competitor, Lowes) and is mainly domiciled in the U.S. 45% of sales come from professional trades vs. 55% from retail consumers.

Pacific Edge shares fell –3% on its half year result which provided little surprises and reiterating business as usual with strong growth in the business continuing. Operating revenue rose +62% from last year to $8.7m, while increased investment into growth meant net loss rose from -$9m to -$10.6m, implying a cash burn of around $2m per month, with cash and cash equivalents of $93.5m plenty of reserves for continued investment into growth. 

BHP has been on a rebound recently, partly on hopes of China eventually reopening as well as added stimulus to their property sector to boost construction activity – all benefactors to iron ore pricing. Commodity prices have also held up well due to supply and demand dynamics, but also as an inflation hedge. The latter likely to ease, and we believe added pressure from a tightening economic activity we are near the end of the current commodity cycle boom.

Ryman Healthcares slumped 17% since less than two weeks since delivering its 2023 half year result. Cashflow issues arising from a less liquid housing market meant net debt rose +$400m over the half to $3 billion. Net profit after tax fell –31% from last year to $193.9m, after reporting a much lower gain on its investment portfolio.