KFL – November 2020 monthly update

1
A WORD FROM THE MANAGER
Market action
In October Kingfish returned gross performance of +5.3%,
outperforming the local market at +2.9% (S&P/NZX50G).
New Zealand equities outperformed global equities, which
fell by 2–3%. The pullback in global equities was primarily
driven by the acceleration in COVID cases in early to mid-
October and the subsequent reintroductions of lockdowns in
many countries.
New Zealand has long been recognised as a more
defensive equity market than most global markets.
The Portfolio
Auckland International Airport (–4% return for the month) held
its AGM during the month. Given the high level of uncertainty
around the outlook for international travel, the company
elected not to provide FY21 earnings guidance. AIA thinks a
full recovery of international travel will take more than three
years. However, the company expects an earlier recovery
in domestic travel to pre-COVID levels and a resumption in
quarantine-free travel to Australia and the Pacific Islands.
Right now, the stronger than expected return of domestic
travel and ongoing strength in AIA’s property business means
earnings are tracking above its expectations.
As a reminder, Kingfish added Contact Energy to the portfolio
in August. The utilities sector in general was strong during
October, up +7%, as the market continues to anticipate a
higher likelihood that Rio Tinto remains in NZ medium-term.
Rio Tinto owns and operates the Tiwai Point smelter which
is the largest electricity user in NZ. Contact Energy (+11%)
outperformed the sector as it is relatively well positioned if the
smelter remains.
Freightways (+8%) provided its usual quarterly update at its
Annual Shareholders Meeting. Headline results were strong
(net profit +43%), primarily driven by its acquisition of Big
Chill. Volumes in the Express Package division remain up
+11%, the same rate as at its August results update. This
reflects a step up in business to consumer (B2C) deliveries
and some market share gains in business to business (B2B)
following poor service by its major competitor NZ Post.
Information Management continues to deliver more subdued
growth with underlying revenue growth of around +3%.
Infratil (+9%) held an investor day focused on its Canberra
Data Centres (CDC) and Vodafone New Zealand
investments. CDC provided increased capacity guidance,
reflecting ongoing acceleration in data usage. On the
flipside, Vodafone expects COVID to negatively impact FY21
earnings by $60–75m, due to lower roaming and prepaid
revenues. Vodafone’s management reiterated significant
profit improvement opportunities in IT transformation (lower
costs), customer experience (customer retention) and 5G fixed
broadband (revenue growth).
During the month Infratil also announced the acquisition
of Qscan, a diagnostic imaging business in Australia. It
is early days but we like the fact the diagnostic imaging
market is growing +5–7% and Qscan’s focus on higher-
value services. While most of Qscan’s business is typical
diagnostic imaging like X-ray and ultrasound, it is a market
leader in the faster growing positron emissions tomography
(‘PET’). PET is commonly used to detect cancer and pricing
is typically 7–8x more than traditional diagnostic imaging
technologies like X-ray.
We attended Mainfreight’s (+17%) investor day and the
opening of its new Mount Maunganui cross dock. A cross
dock is a trucking interchange building where long-haul
trucks and pickup-and-delivery trucks exchange freight.
It was fantastic to see the latest iteration of a Mainfreight
facility and compare and contrast it to others we have
visited both in New Zealand and around the world. The new
cross dock is around five times the size of the old facility.
The company also delivered an impressive update for the
first 26 weeks of the fiscal year. Sales continue to be up
around +5% in constant currency terms and profit before tax
growth accelerated to +23% versus +20% at the last update.
Australia continues to be the key success story, with market
share gains combining with improved line-haul utilisation and
1
Share Price Premium to NAV (including warrant price on a pro-rated basis and using NAV to four decimal places)
MONTHLY UPDATE
November 2020
KFL NAV
$
1. 7 6
$
1. 7 9
Share Price
PREMIUM
1
WARRANT PRICE
4.0
%$
0 .1 7
as at 31 October 2020

2
KEY DETAILS
as at 31 October 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
$1.30
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
252m
MARKET CAPITALISATION
$452m
GEARING
None (maximum permitted 20%
of gross asset value)
SECTOR SPLIT
as at 31 October 2020
6
%
30
%
INDUSTRIALS
17
%

UTILITIES
INFORMATION
TECHNOLOGY
30
%
HEALTH CARE
15
%
CONSUMER
STAPLES
The Kingfish portfolio also holds cash
Sam Dickie
Senior Portfolio Manager
Fisher Funds Management Limited
shrewd control of costs driving strong profit growth. Although
the Australian division is now really hitting its straps, it is still
considerably smaller than the New Zealand division despite
being in a much larger market. We should continue to see the
benefits of this long runway for growth unfold over time.
Summerset (+16%) announced the purchase of 2.8 hectares
of land in Half Moon Bay, Auckland. The development will
meet the needs of a rapidly growing catchment area and will
be the company’s largest to date ($300 million build cost).
Summerset also announced its third quarter sales, which
were the highest on record and up +36% year-on-year. This
reflected strong underlying property market conditions and
how well Summerset looked after its vulnerable residents
during COVID.

33
TOTAL SHAREHOLDER RETURN to 31 October 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
OCTOBER’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 9 stocks and cash.
5 LARGEST PORTFOLIO POSITIONS as at 31 October 2020
MAINFREIGHT
+17
%
SUMMERSET
+16
%
CONTACT ENERGY
+11
%
INFRATIL
+9
%
VISTA GROUP
-8
%
MAINFREIGHT
18
%
FISHER & PAYKEL
HEALTHCARE
15
%
INFRATIL
13
%
THE A2 MILK
COMPANY
12
%
SUMMERSET
8
%
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+9.2%+9.1%+33.4%+23.4%+18.9%
Adjusted NAV Return+5.1%+3.8%+25.2%+18.3%+16.5%
Portfolio Performance
Gross Performance Return+5.3%+4.2%+29.0%+21.5%+19.7%
S&P/NZX50G Index+2.9%+3.0%+12.0%+14.0%+15.1%
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 October 2020

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), Matt Peek (Senior
Investment Analyst), and Michael
Bacon (Senior Investment Analyst)
have prime responsibility for
managing the Kingfish portfolio with
the assistance of Luke O’Donovan
(Quantitative Analyst). Together they
have around 50 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