KFL – December 2017 monthly update

Sam Dickie
Senior Portfolio Manager,
Kingfish
We also added to our investment in Summerset over
the month. The stock had been sold off sharply after
the change of Government amid expectations that the
proposed cut in immigration and other housing related
policies would slow the housing market. With a strong
pipeline of activity, we believe Summerset can continue to
grow its earnings and its share price, despite the slowdown
that we are starting to see in the housing market.
During November, Fisher & Paykel Healthcare also released
its first half result. The result was slightly disappointing
due to slowing obstructive sleep apnea mask growth (the
first time in several years), however, second half growth is
expected to be stronger. We expect this to be driven by
new product launches within the hospital division, growth
from a new non-invasive ventilation mask released in the
US and stabilisation of homecare flow generator revenue.
While there are cross winds buffeting the company’s share
price at the moment, over the longer term we believe
Fisher & Paykel Healthcare has a growth runway far superior
to most companies’ listed on the NZX and we expect this
to be a core Kingfish holding for years to come.
This is our last monthly update for 2017 and we look
forward to updating you again in February next year. We
hope you have a wonderful summer holiday break.
1
Monthly Update
December 2017
KFL NAV
$
1.46
SHARE PRICE
$
1.33
DISCOUNT
8.8
%
as at 30 November 2017
A word from the Manager
The words “broken record” spring to mind, in a good
way, when we describe New Zealand’s share market
performance this year. November’s gain of 0.5% was
another positive result on an uninterrupted 11 month run
of positive results. Admittedly, the 0.5% rise was one of
the smallest monthly returns in the streak, but nonetheless
it was positive, and it did follow October which delivered
the strongest monthly returns of the year so far.
For the calendar year to date, the S&P/NZX50G is up
19% which is remarkable particularly when you consider
the backdrop. To start with, the market wasn’t cheap in
January and there is New Zealand’s overvalued housing
market. Coupled with this, was the New Zealand election
in September which saw a new coalition Government
elected and the fact we have experienced the first year of
a Trump presidency.
The supportive environment continues to bode well for
some of the Kingfish portfolio companies, with long term
Kingfish investment, Ryman Healthcare, reporting a sound
first half profit result. Ryman Healthcare demonstrated
solid operating metrics and inventory levels despite
a weak broader housing market, and the company
continues to make good progress in building new villages
in Melbourne. Importantly, Ryman Healthcare also
improved their disclosure of certain key operating metrics
which is something we had been looking for. This solid first
half result and our follow up meetings with management
were a wonderful opportunity for us to reaffirm our
positive view of the company, the quality of the team and
their long term strategic vision. Additionally, with interest
rates falling over the month, yield stocks including those
in the property and retirement sectors performed strongly,
with Ryman Healthcare up 14% for November.

Sector Split
as at 30 November 2017
Key Details
as at 30 November 2017
FUND TYPE
Listed Investment Company
INVESTS IN
Growing New Zealand companies
LISTING DATE
31 March 2004
FINANCIAL YEAR END
31 March
TYPICAL PORTFOLIO SIZE
15-25 stocks
INVESTMENT CRITERIA
Long term growth
PERFORMANCE
OBJECTIVE
Long term growth of capital and
dividends
TAX STATUS
Portfolio Investment Entity (PIE)
MANAGER
Fisher Funds Management
Limited
MANAGEMENT
FEE RATE
1.25% of gross asset value
(reduced by 0.10% for every 1% of
underperformance relative to the
change in the NZ 90 Day Bank Bill
Index with a floor of 0.75%)
PERFORMANCE
FEE HURDLE
Changes in the NZ 90 Day Bank
Bill Index + 7%
PERFORMANCE FEE
15% of returns in excess of
benchmark and high water mark
HIGH WATER MARK
$1.30
SHARES ON ISSUE
189m
MARKET CAPITALISATION
$251m
GEARING
None (maximum permitted 20%
of gross asset value)
Performance
to 30 November 2017
2
3
%
ENERGY
30
%
INDUSTRIALS
14
%

UTILITIES
2
%
CONSUMER
STAPLES
30
%
HEALTHCARE
7
%
INFORMATION
TECHNOLOGY
11
%
CONSUMER
DISCRETIONARY
The Kingfish portfolio also holds cash.
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Corporate Performance
Total Shareholder Return+2.3%+5.4%+4.8%+7.9%+13.4%
Adjusted NAV Return+3.2%+4.9%+17.5%+12.4%+13.5%
Manager Performance
Gross Performance+3.5%+5.7%+20.8%+15.2%+16.9%
S&P/NZX50G Index+0.5%+4.7%+18.7%+14.7%+15.1%
Non-GAAP Financial Information
Kingfish uses non-GAAP measures, including adjusted net asset value, gross performance return and total shareholder return. The rationale for using such non-GAAP measures is as follows:
»adjusted net asset value – the underlying value of the investment portfolio adjusted for capital allocation decisions,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and hedging of currency movements, and
»total shareholder return – the return to an investor who reinvests their dividends, and if in the money, exercises their warrants at warrant maturity date for additional shares.
All references to adjusted net asset value, gross performance return and total shareholder return in this monthly update are to such non-GAAP measures. The calculations applied to non-GAAP measures are
described in the Kingfish Global Non-GAAP Financial Information Policy. A copy of the policy is available at http://kingfish.co.nz/about-kingfish/kingfish-policies/

November’s Biggest Movers
Typically the Kingfish portfolio will be invested 90% or more in equities.
The remaining portfolio is made up of another 13 stocks and cash.
RYMAN HEALTHCARE
+14
%
MICHAEL HILL
+12
%
SUMMERSET GROUP
+8
%
Z ENERGY
+7
%
XERO
-7
%
5 Largest Portfolio Positions
as at 30 November 2017
MAINFREIGHT
12
%
FISHER & PAYKEL
HEALTHCARE
11
%
INFRATIL
9
%
FREIGHTWAYS
8
%
RYMAN
HEALTHCARE
7
%
Total Shareholder Return
to 30 November 2017
3
Mar
2004
Mar
2005
Mar
2006
Mar
2007
Mar
2008
Mar
2009
Mar
2010
Mar
2011
Mar
2012
Mar
2014
Mar
2015
Mar
2013
Mar
2016
Share Price/Total Shareholder Return
$
2.50
$
3.00
$
2.0 0
$
1.50
$
1.00
Share PriceTotal Shareholder Return
$
4.00
$
0.50
$
0.00
Mar
2017
$
3.50

Disclaimer: The information in this update has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered only, and it is
by necessity brief. The information and opinions are based upon sources which are believed to be reliable, but Kingfish Limited and its officers and directors make no representation as to its accuracy
or completeness. The update is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from an
authorised financial adviser should be taken before making an investment. To the extent that the update contains data relating to the historical performance of Kingfish Limited or its portfolio companies,
please note that fund performance can and will vary and that future results may have no correlation with results historically achieved.
Kingfish Limited
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 489 7094 | Fax: +64 9 489 7139
Email: enquire@kingfish.co.nz | www.kingfish.co.nz
4
Computershare Investor Services Limited
Private Bag 92119, Auckland 1142
Phone: +64 9 488 8777 | Fax: +64 9 488 8787
Email: enquiry@computershare.co.nz | www.computershare.com/nz
About Kingfish
Kingfish is an investment company
listed on the New Zealand Stock
Exchange. The company gives
shareholders an opportunity to
invest in a diversified portfolio
of between 15 and 25 quality
growing New Zealand companies
through a single, professionally
managed investment. The aim
of Kingfish is to offer investors
competitive returns through
capital growth and dividends.
Capital Management Strategies
Regular Dividends
»Quarterly distribution policy introduced in
June 2009
»Under this policy, 2% of average NAV is targeted
to be paid to shareholders quarterly
»Dividends paid by Kingfish may include dividends
received, interest income, investment gains
and/or return of capital
»Shareholders who prefer to have increased
capital rather than a regular income stream have
the opportunity to participate in the company’s
dividend reinvestment plan (DRP)
»Shares issued to DRP participants are at a 3%
discount to market price
»Kingfish became a portfolio investment entity on
1 October 2007. As a result, dividends paid to
New Zealand tax resident shareholders have not
been subject to further tax
Share Buyback Programme
»Kingfish has a buyback programme in place allowing
it (if it elects to do so) to acquire up to 9.4m of its
shares on market in the year to 31 October 2018
»Shares bought back by the company are held as
treasury stock
» Shares held as treasury stock are available to be
re-issued for the dividend reinvestment plan and to
pay performance fees
Warrants
»Warrants put Kingfish in a better position to
grow further, improve liquidity, operate efficiently
and pursue other capital structure initiatives as
appropriate
»A warrant is the right, not the obligation, to purchase
an ordinary share in Kingfish at a fixed price on a
fixed date
»There are currently no warrants on issue
Management
Kingfish’s portfolio is managed
by Fisher Funds Management
Limited. Sam Dickie (Senior
Portfolio Manager), Zoie Regan
(Senior Investment Analyst) and
Matt Peek (Investment Analyst)
have prime responsibility for
managing the Kingfish portfolio.
Together they have over 40 years
combined experience and are
very capable of researching and
investing in the quality New
Zealand companies that Kingfish
targets. Fisher Funds is based in
Takapuna, Auckland.
Board
The Manager has authority
delegated to it from the
Board to invest according to
the Management Agreement
and other written policies.
The Board of Kingfish
comprises independent
directors Alistair Ryan (Chair),
Carol Campbell and Andy
Coupe; and non-independent
director Carmel Fisher.