KFL – March 2022 Quarterly Newsletter

Kingfish continues to back quality growth companies
During the March quarter the stock market behaved like a “voting machine”,
but we continue to bank on companies that will “weigh-up” over time.
Benjamin Graham was one of the great investing minds. A key principle
of his is that in the short run, the stock market is like a voting machine,
tallying up which stocks are popular and unpopular. In the long run, the
market is like a weighing machine, assessing the substance of a company.
Unfortunately, during the quarter with interest rates rising sharply our high-
quality growth portfolio proved unpopular.
Kingfish performance – a tough quarter for investors
Kingfish underperformed the local market in the quarter, falling −9.6%,
(gross performance/ adjusted NAV return) more than the −7.1% fall of the
S&P/NZX50G index. We recognise this is a disappointing and painful
result.
At times like this, we ask ourselves three questions:
1. Why the poor performance?
2. What are we doing about it?
3. What have we learned?
Why the poor performance?
The key factor during the period was sharply rising interest rates on the back
of stubborn inflation. At the end of last year, the market was expecting the
US Federal Reserve to raise interest rates two times over the upcoming 12
months. Today, the market is expecting ten rate hikes over the upcoming 12
months!
The pace of those moves was bad for share markets generally as it
reduces the value investors place on future cash flows. It also resulted in
the outperformance of defensive (utilities) and cyclical companies (energy,
banks) over quality growth companies for the first time in a while. Those
companies typically have narrower moats and shorter growth runways.
What are we doing about it?
As long-term investors, we are constantly questioning whether anything
has changed the width of the moat, the length of the growth runway or the
quality of the management teams.
In addition, we have been scrutinising inflationary pressures on costs and the
extent to which our companies can use their pricing power to maintain profit
margins. In most cases nothing has changed, cost inflation is present but
hasn’t got worse. Logistics or supply chains remain disrupted but haven’t got
worse. Our companies are putting through price increases to offset inflation.
The good news is we are starting to see more attractive valuations in the
portfolio. That is a function of both the price falls and the earnings of these
companies still growing.
We have started to deploy cash into the most attractive opportunities where
our assessment of the investment hasn’t changed or the long-term picture
hasn’t altered, but the stock price has fallen sharply. We have bought shares
in Summerset and Fisher & Paykel Healthcare for example.
What have we learned?
Volatility is inevitable. It happens every year, and every few years the
volatility is more severe. For patient, long-term investors, while painful, it is
an opportunity.
This rotation away from growth companies is a reminder that in the short
term the valuation multiple can sometimes be the biggest driver of the
company’s share price. This can be most painful during a period of sharply
rising inflation and interest rates such as what we saw in the March
quarter. However, we must not forget that over time earnings growth is the
most important driver of the value of a company and returns for investors.
We remain focused on companies with wide and ideally widening moats,
long runways for growth, run by passionate and smart management teams.
Our investment process is geared to finding these companies, which we
expect will deliver superior returns over time.

Portfolio update – still heading in the right direction
Despite the poor price performance, the Kingfish portfolio had an
encouraging reporting season.
The majority of the companies in the portfolio that had results or trading
updates beat expectations. We are always on high alert for any
deterioration in the outlook, especially if it relates to underlying demand.
That wasn’t the case. The handful of companies that “missed” on guidance
were generally either directly the result of Omicron impacts (companies in
the travel industry) or deliberately cautious because of the uncertain macro
environment.
Our largest position, Mainfreight, was a good case in point of lacklustre
share price performance, despite a positive update and continued progress
against its long-term agenda. It provided a trading update for the first
43 weeks of its fiscal year. Profit growth was ahead of expectations.
The company is seeing a continuation of tailwinds in its Air & Ocean
international freight forwarding division. It also continues to execute well in
Transport and Warehousing, taking further market share.
Infratil performed well. The company started the year by reporting an
increase in the valuation of Canberra Data Centres (CDC), its largest asset.
At its investor day in February, Infratil announced strategies for two of its
investments which we expect to add value in the short to medium term.
Vodafone is investigating the sale of a stake in its mobile phone towers
business. Renewable electricity developer Longroad Energy is looking for
a co-investment partner which will allow it to pursue a much bigger growth
trajectory than previously indicated.
Auckland Airport’s share price rallied late in the quarter as the New
Zealand Government accelerated the removal of border restrictions and
isolation requirements. These have been a key barrier to people booking
trips, and we expect demand for travel to increase as a result.
Fisher & Paykel Healthcare updated investors on expected revenue for
the year to March 2022 which was around 10% short of expectations in
the second half. This was due to a sharp slowdown in sales of hardware
and consumables in its hospital division because of the lower severity of
the Omicron COVID variant. This was likely exacerbated by high stock
levels in the US. We have seen apparent demand over short periods vary
significantly since the onset of COVID in conjunction with waves of COVID
patients and associated stocking/destocking. The company continues to
see signs that the larger installed base of its hardware is well utilised in the
absence of COVID related demand, which we expect will drive stronger
consumables sales over time.
1
Share price Premium to NAV (including warrant price on a pro-rated basis and using the net asset value per share, after expense, fees and tax, to four decimal places).
QUARTERLY NEWSLETTER
1 January 2022 – 31 March 2022
KFL NAV
$
1.58
$
1. 7 5
Share Price
PREMIUM
1
11.9
%

as at 31 March 2022
Sam Dickie
Senior Portfolio Manager
19 April 2022
1
Warrant Price
$
0.05

2
Disclaimer: The information in this newsletter 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 newsletter is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from a financial
adviser should be taken before making an investment. To the extent that the newsletter 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.
3 Months
3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return(9.7%)+21.0%+17.6%
Adjusted NAV Return(9.6%)+11.0%+13.0%
Portfolio Performance
Gross Performance Return (9.6%)+13.5%+15.6%
S&P/NZX50G Index(7.1%)+7.1%+11.0%

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 newsletter 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/
LISTED COMPANIES% Holding
Auckland Intl Airport8.6%
Contact Energy3.0%
Delegat Group3.2%
EBOS Group2.0%
Fisher & Paykel Healthcare14.1%
Freightways3.7%
Infratil17.6%
Mainfreight20.0%
Meridian Energy1.0%
Port of Tauranga2.0%
Pushpay Holdings1.0%
Ryman Healthcare3.7%
Summerset10.1%
The a2 Milk Company4.3%
Vista Group International3.8%
Equity Total98.1%
New Zealand dollar cash1.9%
TOTAL100.0%
PORTFOLIO HOLDINGS SUMMARY
as at 31 March 2022
COMPANY NEWS
Dividend Paid 25 March 2022
A dividend of 3.55 cents per share was paid to Kingfish shareholders on 25 March 2022 under the quarterly distribution policy. Interest in Kingfish’s
dividend reinvestment plan (DRP) remains high with 41% of shareholders participating in the plan. Shares issued to DRP participants are at a 3%
discount to market price. If you would like to participate in the DRP, please contact our share registrar, Computershare on (09) 488 8777.
PERFORMANCE
as at 31 March 2022
Kingfish Limited
Private Bag 93502, Takapuna, Auckland 0740, New Zealand
Phone: +64 9 489 7094 | Fax: +64 9 489 7139
Email: enquire@kingfish.co.nz | www.kingfish.co.nz
If you would like to receive future
newsletters electronically please email
us at enquire@kingfish.co.nz
SIGNIFICANT RETURNS
IMPACTING THE PORTFOLIO
DURING THE QUARTER
FISHER & PAYKEL
HEALTHCARE
- 26
%
RYMAN
HEALTHCARE
- 23
%
VISTA GROUP
- 22
%
PUSHPAY
HOLDINGS
-14
%
SUMMERSET
GROUP
-13
%
FOREIGN TAX COMPLIANCE ACT (FATCA) AND COMMON REPORTING
STANDARD (CRS)

As a result of the New Zealand Government agreeing to participate in the exchange of information with other jurisdictions under the Foreign Tax
Compliance Act (FATCA) and Common Reporting Standard (CRS), Financial Institutions are required to undertake due diligence to determine the
account holders’ jurisdiction of tax residence. All shareholders will have received a Tax Residency Self-Certification form from Computershare
depending on when they first purchased their securities. Please ensure you complete and return this important document if you have not already
done so. For more information please visit the IRD website: https://www.ird.govt.nz/international-tax/exchange-of-information/crs/registration-and-
reporting or contact Computershare if you are unsure of whether you have completed your form.