Harmoney chief executive David Stevens rings the bell at the company's listing on the NZX and ASX last year. Photo / Supplied
It's early days yet, but most of the sharemarket's latest debutants have not fared well since listing.
In recent months eight new names have joined the NZX: Radius Healthcare, Auckland Real Estate, Harmoney, Rua Bioscience, NZ Rural Land, Third Age Health, NZ Automotive Investments and My Food Bag.
My Food Bag - the biggest of those new issues - has failed to fire since listing on March 5.
The stock closed at $1.57, down from its issue price of $1.85, despite some upbeat broker reports on the company.
Craigs Investment Partners, which this week initiated coverage of the company, rated My Food Bag as "overweight", with a 12-month target price of $1.93.
Forsyth Barr has given the stock an "outperform" rating of $1.85 - in line with its IPO price.
Jarden, which acted as joint lead manager for the issue alongside Forsyth Barr and Craigs, rated the company as a "buy" with a $1.90 target price.
Craigs said it saw a "good runway for earnings growth" in 2021 and 2022, supported by procurement savings.
Investors will be the judge of that when My Food Bag releases its annual results for the March 31 year on May 21.
Harmoney disappoints
Online direct personal lender Harmoney debuted last November at a discount to its A$3.50 issue price and has since slumped even further.
The stock last traded on the ASX at A$2.03 - a 42 per cent discount to its issue price - and at $2.22 on the NZX.
Harmoney opted for a primary listing on the ASX, with a "foreign exempt" listing on the NZX.
In an earnings update this week, Harmoney said that across the group, loans to new customers increased 60 per cent to $44.1m in the third quarter, up from $27.5m in the second quarter.
NZ Rural Land
NZ Rural Land's share price has also been slow out of the traps since listing late in December.
The stock closed at $1.14, against its issue price of $1.25.
The company raised $75 million in the public share float, which along with debt will give it about $100m to buy rural land.
NZ Rural aims to acquire properties and lease them to farmers or other producers.
NZ Automotive
Shares in NZ Automotive Investments, the company behind one of the country's largest used car dealerships, 2 Cheap Cars, last traded at $1.05 from its $1.30 February listing price.
NZ Automotive was a "direct" listing, which did not involve a capital raising.
Auckland Real Estate Trust, which specialists in investing in Auckland's CBD, has not deviated from 79c since its December listing.
The trust was already listed on the ASX before it joined the NZX .
Rua Bioscience
Medicinal cannabis company Rua Bioscience has slipped after starting strongly in October.
Rua closed at 38.5c, down from its 50c issue price and a far cry from last year's 70c peak.
Retirement upside
Out of the new issues to come to the market in recent months, the retirement sector has found favour.
Shares in Third Age Health, a medical services provider for the sector, closed at $2.40, up from its initial reference price of $2.15 but down from its early peak of $2.70.
In the same camp, Radius, a specialist health and aged care provider for the elderly and disabled, closed at 99c, up from its 80c issue price.
Neither Third Age nor Radius raised new capital.
NZX chairman James Miller said at last week's annual meeting that the NZX's "pipeline" of new issues had never been stronger.
"This includes the possibility of some equity listings of very significant scale – prospects that could have a positive impact on the NZX," he said.
Warren Buffett, chairman and chief executive of US investment giant Berkshire Hathaway, is not a big fan of IPOs.
"An IPO situation more closely approximates a negotiated deal," he once told a Berkshire annual meeting.
"I mean, the seller decides when to come to market in most cases. And they don't pick a time necessarily that's good for you."
He also once told CNBC: "In 54 years, I don't think Berkshire has bought a new issue."
However it appears Berkshire broke its own self-imposed rule last year when it invested US$735m in cloud data platform Snowflake.
On debut, the stock rocketed to US$245, having been priced in the IPO at US$120.
Snowflake now trades at about US$238 per share, down from last December's peak of US$390.
Jarden has given the thumbs-up to Comvita's moves to reorganise itself.
The mānuka honey exporter, which has had a chequered earnings history, has been changing to take the volatility out of its earnings.
The company this week said it now expects its operating Ebitda for the June year to be in a range of $22.5m-$25.5m, up from a previously announced range of $20m-$23m, thanks to good cost control and a favourable sales channel mix.
"Although the harvest has come in below average, its new harvest model appears to be delivering, with only a small impact on earnings expectations more than offset elsewhere," Jarden said in a research note.
Comvita was "executing early" on its business transformation, Jarden said.
"Reducing the earnings volatility from its apiary business is a good step forward to providing earnings confidence and addressing the agri risk that has weighed on the stock in recent years."
Today is the day changes to the S&P Global Clean Energy Index, which has Meridian and Contact as constituents, are expected to take effect.
The index is set to add 51 stocks to the existing 30 constituents.
"Clean energy is an area that has garnered much investor attention over the past year, fuelled in part by falling prices of renewables and growing momentum for carbon neutrality," S&P Dow Jones Indices senior director Ari Rajendra said in a blog.
As the global clean energy sector evolves, the S&P DJI Index Committee aims to have a benchmark that reflects the changing opportunity, he said.
"The index will now aim to add all stocks with the purest clean energy exposure without any limit on target number of companies. If there are fewer than 100 eligible stocks, then companies with lower exposure scores are added without breaching a defined dilution threshold," he said.
"The expectation of a sizeable reduction in volatility could help improve its risk/return profile as the theme continues to take shape in the years to come."
By country, the index's weighting will fall by 7 per cent for New Zealand, 3.7 per cent for Australia and by 2.7 per cent for China.
United States "clean" stocks will lift their presence on the index by 6.6 per cent, Denmark by 6.1 per cent and Italy by 4.6 per cent.
Speculation has swirled around Meridian and Contact in light of the re-weighting of Blackrock's Clean Energy exchange traded funds that will result from the index change.
Both stocks have gained ground in the month to date, despite speculation that the index change will result in a wall of selling.
All will be revealed by the close of business today.
Forsyth Barr has downgraded its rating on donation technology company Pushpay to "underperform".
During the greatest-ever year for demand in church technology, the broker fully expected Pushpay to capitalise on its dominant position in the US church market. That was based on its track record, the large gap between its product offering and competitors at the start of Covid-19, and the sizeable and growing market Pushpay was serving.
"Instead, our recent research suggests that over the past twelve months Pushpay has lost significant ground to its competition, with Tithe.ly growing its churches by 12,000 in the same period Pushpay grew by 309," it said.
On Forsyth Barr's estimates, Pushpay's penetration of the top 100 churches has fallen from 58 in July 2020 to 52 as of March 2021.
"We believe much of this is linked to Pushpay increasing its already premium price versus low-cost competition," it said.
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