Chronux Research

The leading independent research firm in South Africa

Chronux Research, founded in 2020, is an independent equity research provider focused on the South African market, with coverage spanning over ten sectors and approximately 30 companies. Within the domestic market, Chronux is particularly well recognised for its Industrials, Construction, Mid-Cap and Forestry & Paper research, where the firm combines deep sector knowledge with disciplined financial modelling and a clear, conviction-led investment framework. The team provides a global perspective on key structural and cyclical themes across the sectors covered. Chronux delivers fundamental equity research incorporating both long and short ideas with analysis driven by in-house financial models, ongoing dialogue with industry decision-makers and regular engagement with management teams. In addition to company-level research, Chronux facilitates high-level interaction with senior executives and provides access to relevant industry experts, supporting clients in forming differentiated investment views. Chronux has also been committed to developing the next generation of analysts and advancing careers within the investment industry, supported by a strong and engaged institutional client base.

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New Vehicle Sales – September 2020 Key message: Vehicle sales have stabilised in June to September at 30-35% down on 2019 – this looks to be the new normal level for the remainder of the year. NAAMSA released September 2020 new vehicle sales. Total vehicles sales...

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Key message: Debt covenants have been revised, removing the short-term liquidity risk. Nampak is in full defensive mode, aiming to strengthen the balance sheet in a competitive market.    Nampak released a pre-close update for the 11 months to August...

Sasol: Lower earnings on LCCP shut and weak prices

Lake Charles shutdown:  Sasol’s Lake Charles facilities has been shut since late August as a result of Hurricane Laura.  The company guides that reliable electricity supply is only expected in early to mid-October.  Start-up of the producing facilities...

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Key message: Barloworld lost its MAC (Material Adverse Change) claim and has been forced to honour the original purchase agreement. We look at the impact on Barloworld’s financials. Barloworld has lost the MAC (Material Adverse Change) claim after a ruling from an...

Sasol: Spotlight on earnings – latest profit drivers

Spot earnings moved higher again this week as chemical prices rose, and the rand weakened.  Refining margins remain particularly weak and diesel cracks remain negative.  Spot earnings for FY21 are at R6.13/share.  At spot prices the LCCP would lose...

China recovered paper (RCP) ban update

China recovered paper (RCP) ban in a nutshell: In Q3 17A, China notified the WTO of its ban on mixed paper imports effective 1 Jan 2018. In March 2019, China set a strict 0.5% contaminant rule on all other recovered paper imports. In June 2020, the Chinese Ministry of...

Sasol: Running out of Gas – literally a key risk

Gas running out:   Sasol has not been able to add to its gas reserves in Mozambique and the remaining reserve life is seven years.  Gas production should start declining in 2024 as pressure in the wells drop.The importance of gas:  Gas is used as...

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Key message: Conservative balance sheet means no Covid-related capital issues, with acquisitions still a strong driver of growth. Offshore operations struggling. Super Group announced FY20 results. Revenue and operating profit declined by 8.7% and 41% respectively,...

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Key message: A good result and management positive in outlook. However, Motus is becoming more capital intensive to maintain vehicle sales – this will hurt returns. High rental car exposure in the Import and Distribution division remains a risk, in our opinion. Motus...