Chronux Research
The leading independent research firm in South AfricaChronux 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.
Our Corporate Sponsored Coverage
Making It PossibleLecta: European CWF and Specialties Insights (Q2 20A)
SAP’s European operations are roughly 3x Lecta’s (based on volumes: Lecta’s Q2 19A EBITDA margin contracted by 727 bps y/y to 1.0%. This was ahead of SAP’s -0.2% EBITDA margin over the same period.Lecta’s sales volumes underperformed Sappi: Lecta’s CWF volumes...
Sasol: Spotlight on earnings – latest profit drivers
Sasol’s spot earnings continue to decline are oil prices and refining margins decline. Diesel cracks in particular are sharply lower this week. FY21 spot earnings are at R4.19/share. At spot prices the LCCP loses around R4.01/share.Refining margins...
Sasol: New gas prices – possible negative impacts
Monopoly gas supplier: Sasol is the main supplier of natural gas in the South African market and sells natural gas produced at the Mozambican gas fields, as well as methane rich gas produced at the Synfuels facility to customers in South Africa and Mozambique.New...
Cashbuild – FY20 Results
Key message: Solid results with strong cash generation notwithstanding the COVID impact. Strong sales growth post YE is providing FY21 with a good start – but pent-up demand levels (and supply disruptions) are distorting the real underlying demand levels. Cashbuild...
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New Vehicle Sales – August 2020 Key message: Vehicle sales have stabilised in June, July and August at 30-35% down on 2019 – this looks to be the new normal level for the remainder of the year. NAAMSA released August 2020 new vehicle sales. Total vehicles sales...
Sasol: Hurricane Laura – a significant threat to operations in Lake Charles
We highlight the following: The Lake Charles television channel (KPLCTV) is expecting Laura to be a more severe hurricane than hurricanes Rita and Ike that created significant damage in the area in 2005 and 2008 respectively. At this point the hurricane is seen...
Sasol: Spotlight on earnings – latest profit drivers
Sasol’s spot earnings are sharply lower this week, mostly as a result of downgrades due to weak volume guidance for the North American chemicals businesses in particular. FY21 spot HEPS are at R5.28 and we expect a loss of R6.67 at the LCCP.Refining margins...
Sephaku Holdings: Feedback from Management Meeting
Key message: The cement market has been very strong post-lockdown as blenders and imported volumes have declined. Sephaku Holdings recently released FY20 results.Sephaku CementSephaku Cement had their full annual shutdown in March before the lockdowns occurred – and...
UPM restructuring: Closure plans & sale mainly impacting its Communication Papers Segment
Total impact on UPM: Around 840 roles could be reduced, mostly in Finland with a restructuring cost of EUR 115m (48% cash and 52% non-cash) mainly impacting their Communication Papers segment.Potential newsprint sale and conversion provides negative read-through for...
SCA: Exits Publication Paper Segment
Intention to exit publication paper: Having previously closed over 1mtpa, remaining assets are cash flow negative. Negotiations have been initiated for the closure of all three paper machines at the Ortviken mill within next six months. This will remove 775ktpa of...