KFL – August 2020 monthly update

1
A WORD FROM THE MANAGER
In July Kingfish returned gross performance of +4.9% and
an Adjusted NAV return of +4.7%. This compares to our
benchmark (S&P/NZX50G) which was up +2.4%.
Mainfreight provided an update at its Annual Shareholders’
Meeting, including a trading update for the first 17 weeks of
the new financial year beginning 1 April, which demonstrated
outstanding performance despite the impacts of COVID.
Constant currency
2
revenue is up +5% on the prior year
and profit before tax an impressive +20%. This compares
favourably to the first 7 weeks per the company’s last update.
The strong performance has been driven by $67 million in
new business in the first quarter as Mainfreight’s sales teams
went into overdrive, targeting market share opportunities,
including taking business from lesser competitors who
delivered poor service or could not execute well against the
COVID backdrop. Australia was the standout region, where
profit before tax has grown +167% as a result of market
share gains, but also denser line haul utilisation improving
gross margins and other process improvements delivering cost
efficiency. In New Zealand there has been a strong recovery
following the Alert Level 4 lockdown. Our channel checks had
suggested activity had improved and we had increased our
position based on this view.
The New Zealand electricity sector was hit with the news that
Rio Tinto has given notice to Meridian, that it is terminating the
Tiwai Point aluminium smelter’s power contract. The smelter is
expected to wind down and close around August 2021. This
would release around 5500GWh of electricity generation
in the lower South Island, circa 13% of national demand.
The final outcome is still not entirely clear as Meridian has
made a last gasp offer of a lower electricity price and
the government may still get involved to try and keep the
smelter open. Closure would mean some hydro generation is
wasted and potentially a large fall in South Island wholesale
electricity prices before transmission upgrades enable power
to move further north and prices partially recover. Over time
electrification of proceses, like Fonterra’s coal boilers, may
also reduce the supply/demand imbalance. Regardless,
Meridian will face reduced earnings and dividends over the
next couple of years at least. We had trimmed our position
earlier in the year when we thought the risks of closure of
Tiwai Point were not being reflected in the share price.
Summerset provided its second quarter update for 2020
including first half net profit guidance of $40-45 million. This
was better than many had feared given the effects of Alert
Level 4 mid period. New sales of independent living units, a
key barometer for the company, have recovered strongly and
are currently growing solidly versus the same time last year.
This reflects the great job Summerset did to keep residents
safe from COVID which has generated positive word of
mouth. It also reflects the sustained momentum in the housing
market versus the fall many feared. Prospective residents can
sell their property and move in, assisted by some flexibility
around settlement timing that the company has introduced.
Our research had suggested these factors were in place
and the business could outperform expectations, so we had
increased our position recently.
Vista lagged during the month which reflected further
delays to the opening of cinemas in the US as blockbuster
movie ‘Tenet’ was further delayed until 3 September (Labor
Weekend in the US), having previously been delayed through
July and more recently until 12 August. The prolonged
COVID situation in several key US states has prevented
cinemas from successfully reopening. Studios will not release
new content until it can be played on a lot of screens (to
maximise box office). It is not economic for cinemas to widely
reopen unless they have new content to attract audiences
– a chicken and egg situation! However, cinemas outside
the US are gradually reopening which is more positive with
global release of ‘Tenet’ in 70 countries from 26 August. The
delay has been a short term negative for the industry and its
participants.
1
Share Price Discount to NAV (including warrant price on a pro-rated basis and using NAV to four decimal places)
2
Constant currency refers to a fixed exchange rate that eliminates fluctuations when calculating financial performance figures. Companies with significant
operations in other countries often represent their earnings in constant currency terms since floating exchange rates can often mask true performance.
MONTHLY UPDATE
August 2020
KFL NAV
$
1. 7 3
$
1. 6 9
Share Price
DISCOUNT
1
WARRANT PRICE
1.1
%$
0.0 8
as at 31 July 2020
Sam Dickie
Senior Portfolio Manager
Fisher Funds Management Limited

2
KEY DETAILS
as at 31 July 2020
FUND TYPE
Listed Investment Company
INVESTS IN
Growing New Zealand
companies
LISTING DATE
31 March 2004
FINANCIAL YEAR END
31 March
TYPICAL PORTFOLIO SIZE
10-25 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
10% of returns in excess of
benchmark and high water mark
HIGH WATER MARK
$1.34
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
250m
MARKET CAPITALISATION
$423m
GEARING
None (maximum permitted 20%
of gross asset value)
SECTOR SPLIT
as at 31 July 2020
5
%
30
%
HEALTH CARE
18
%

UTILITIES
INFORMATION
TECHNOLOGY
32
%
INDUSTRIALS
13
%
CONSUMER
STAPLES
The Kingfish portfolio also holds cash
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+4.5%+15.3%+27.7%+21.1%+15.1%
Adjusted NAV Return+4.7%+16.5%+15.8%+17.6%+15.9%
Portfolio Performance
Gross Performance Return+4.9%+18.4%+19.1%+20.8%+19.0%
S&P/NZX50G Index+2.4%+11.4%+8.0%+15.1%+14.6%
Non-GAAP Financial Information
Kingfish uses non-GAAP measures, including adjusted net asset value, adjusted NAV return, 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 after expenses, fees and tax,
»adjusted NAV return – the net return to an investor after expenses, fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection, before expenses, fees and tax, and
»total shareholder return – the return combines the share price performance, the warrant price performance, the net value of converting any warrants into shares, and the dividends paid to shareholders. It
assumes all dividends are reinvested in the company’s dividend reinvestment plan, and that shareholders exercise their warrants, (if they were in the money), at warrant expiry date.
All references to adjusted net asset value, adjusted NAV return, 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 Non-GAAP Financial Information Policy. A copy of the policy is available at http://kingfish.co.nz/about-kingfish/kingfish-policies/
PERFORMANCE to 31 July 2020

33
TOTAL SHAREHOLDER RETURN to 31 July 2020
Mar
2004
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
$
3.00
$
4.00
$
5.00
$
6.00
$
7.00
Share PriceTotal Shareholder Return
$
1.00
$
2.00
$
0.00
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2005
JULY’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
during the month
Typically the Kingfish portfolio will be invested 90% or more in equities.
The remaining portfolio is made up of another 8 stocks and cash.
5 LARGEST PORTFOLIO POSITIONS as at 31 July 2020
SUMMERSET
+22
%
MAINFREIGHT
+20
%
A2 MILK
+3
%
PUSHPAY HOLDINGS
-10
%
VISTA GROUP
-12
%
FISHER & PAYKEL
HEALTHCARE
17
%
MAINFREIGHT
17
%
INFRATIL
14
%
THE A2 MILK
COMPANY
11
%
SUMMERSET
9
%

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 10 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 its shares
on market
»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
MANAGEMENT
Kingfish’s portfolio is managed
by Fisher Funds Management
Limited. Sam Dickie (Senior
Portfolio Manager) and Matt Peek
(Investment Analyst) have prime
responsibility for managing the
Kingfish portfolio. Together they
have over 30 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,
Andy Coupe and Carmel
Fisher.
Warrants
»On 5 February 2020 a new issue of warrants
(KFLWF) was announced
»The warrants were issued at no cost to eligible
shareholders and in the ratio of one warrant for every
four Kingfish shares held
»The warrants were allotted to shareholders on 9
March 2020 and the warrants were listed on the
NZX Main Board from 10 March 2020. (Information
pertaining to the warrants was mailed/emailed to
shareholders in February 2020)
»The Exercise Price of each warrant is $1.64, to be
adjusted down for dividends declared during the
period up to the announcement of the Exercise Price.
»The Exercise Date for the new warrants (KFLWF) is
12 March 2021
»The final Exercise Price will be announced and an
Exercise Form will be sent to warrant holders in late
January 2021