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
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Key message: Vehicle sales recover in June but levels unlikely to grow significantly for the rest of the year. Significant rental de-fleeting will have a large impact on new car sales. NAAMSA released June 2020 new vehicle sales. Total vehicles sales declined by...
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Key message: Marginally better than our expectations, KAP seems to have weathered the lockdown in robust shape. Concerns over the Polymers division are overstated, in our opinion. KAP released a pre-closed period operating update and trading statement for FY20. EBITDA...
Sasol: Spotlight on earnings – latest profit drivers
Oil prices and refining margins moved lower this week and the rand is also stronger. Spot earnings for FY21 were sharply lower at R8.27/share as a result.Chemical prices were higher however and Asian ethylene prices continue its upward march and polyethylene...
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Key message: Better than our previous forecast – but some large goodwill impairments likely. Super Group released a Trading Update for the eleven months to May 2020. Revenue, EBITDA and operating profit was down 11.9%, 8.3% and 37.7% compared to the comparable 11...
Grasim (VSF producer): Q4 20A Insights
Record VSF sales volumes in FY 20A (554kt/+2.4% y/y): Jan-Feb saw record production rates of 1,700/t (usually 1,400-1,500/t) driven by ”booming” demand, with a continued shift to VSF. Q4 volumes were flat as national lockdown (10 days in March) saw March volumes down...
Sasol: Spotlight on earnings – latest profit drivers
Higher oil prices, a significant increase in the refining margin as well as higher prices in the C2 value chain sees Sasol’s FY21 spot earnings increase to R15.81/share.Ethylene continues to move higher in Asia and polymer prices have started to react, albeit at a...
Forestry & Paper Weekly Insights
H&M provides sales update (read-through for the likes of Lenzing, Birla and Sappi): Sales development was largely driven by COVID-19. Q2 sales (1 March – 31 May) declined by 50% y/y, while online sales increased by 36%. Total sales for 1-13 June declined by 30%...
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Key message: Management had an optimistic tone, with the restaurant trade opening quicker than expected. Cost control has been good (with help from government schemes to cover salaries). Bidcorp hosted a Capital Markets call. The overall tone was positive – the HORECA...
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Key message: Barloworld released a Trading Update. HEPS guidance for continuing operations in 1H FY20 has gone negative. We adjust our forecasts based on the new information. Barloworld released a trading updated 1H FY20. The Covid-19 impact seems to have been...
Sasol: Spotlight on earnings – latest profit drivers
Oil prices and refining margins were higher this week, driving Sasol’s spot earnings higher and FY21 spot earnings (R4.38) turned positive for the first time since the 20th of March.LDPE and polypropylene prices increased in Asia this week and US polyethylene prices...