Forsyth Barr yesterday increased its valuation of the aged-care provider by 14% to $2.91 a share from $2.55, at which they last traded.
Broker Tony Conroy said Ryman continued to deliver a high-quality product enjoying increased demand despite working through a tough period for the property market.
"This is a significant increase in valuation and it is one stock I have in all my portfolios. It always seems to deliver," he said.
Ryman was increasing its annual build rate from 450 units/beds to at least 550 units/beds - about 350 townhouses and apartments and 200 rest-home beds. That reflected the building of larger villages and an increase in rest-home and hospital beds per village.
"With the sharply ageing population, there is increasing demand for not only retirement village accommodation, but also rest-home beds."
Ryman's hospital and dementia facilities were experiencing increasing demand, Mr Conroy said.
Ryman had started construction of a development worth more than $100 million in Tauranga, made up of 120 aged-care beds, 79 serviced apartments and 195 independent units.
Given the strong demand following the February earthquake, Ryman was also looking to start development as early as possible for its proposed large Christchurch village in Shirley, he said.
The company was also planning a new village in Waikanae, with the acquisition of a 6.9ha site.
There were 250,000 people aged 75 and over in New Zealand and that was expected to more than double by 2032, Mr Conroy said. Within that category, the 85 and over population was growing even faster, from around 66,000 now, to 144,000 by 2031.
The aged-care and rest-home demand was expected to increase even further for Ryman than the underlying demographics suggest, he said.
That was due to the general lack of investment in the aged-care hospital sector - apart from Ryman - and Ryman's increasingly strong brand and market-leading position within the highly fragmented industry.
Ryman had only an estimated 4.6% share in aged-care and about a 10% share in the retirement village sector.
Mr Conroy said many of Ryman's competitors in the rest-home area were small, independent operators that were under- capitalised, had old facilities and were struggling to raise the capital expenditure to stay in business.
"The level of new investment looks like it will not only fail to keep up with demand but might also battle to even replace the operators that drop out of the sector."
There were significant barriers to entry, in addition to a shortage of capital available for investment. Significant expertise and scale was required in what was a complex and management intensive industry, he said.
Forsyth Barr had also increased its revenue and earnings forecasts for Ryman with its revenue forecast for the 2011 financial year increasing nearly 18% to $197.6 million.
The operating earnings forecast increased by 36.3% to $112.6 million.
Mr Conroy said the 2011 forecasts were adjusted to include $30 million of unrealised revaluation gains on its retirement village portfolio which increased the reported profit forecast to $100 million.aid.
