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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Sasol: Spotlight on earnings – latest profit drivers

The oil price as well as refining margins retreated this week, pulling Sasol’s spot earnings a little deeper into the red.  The stronger rand contributed to lower earnings but should actually assist FY20 earnings as year-end hedge losses will be lower.Chemical...

Sasol: An alternative valuation – a call option on oil

Equity holders at risk:   The market value of Sasol’s equity has fallen well below the outstanding debt in the firm increasing the risk to equity holders significantly.  Conventional valuations compromised:  Conventional valuation methodologies...

Afrimat – FY20 Results

Key message: High iron ore prices boosted results, but the Demaneng mine is now producing at full production. Acquisition opportunities are available, with the announcement post results of an offer for Unicorn Capital Partners – with the target asset the Nkomati...

Sasol: Spotlight on earnings – latest profit drivers

Rebounding in oil prices, a recovery in refining margins and small increases in chemical prices had a significant impact on Sasol’s spot earnings and we now estimate a loss of R13.12/share for FY21.Ethylene prices in Asia continue to increase on slightly higher...

Sasol: Liquidity revisited – not out of the woods yet

Fuel prices higher:   Oil prices as well as refining margins have increased significantly since we published our review of Sasol’s liquidity at the end of April (link).  Sasol’s petrol and diesel prices in rands have increased by 73.2% and 90.8%,...

Forestry & Paper Weekly Insights

Under current circumstances, 80% of German media and printing companies unlikely to survive 2020: This is based on the Bundesverband Druck and Medien survey. 24% of companies said they would be able to survive till the end of July. 33% expect sales to drop by 50% y/y...

Verso Q1 20A Insights (North American CFS)

Limited impact in Q1 20A from COVID: Their RM supply chain remains solid with no anticipated supply issues. Verso noted pressure from lack of demand and “competitors are filling up machines and going after price aggressively”.Continued pressure on Graphic and...

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Key message: We make further adjustments to our forecasts as a gradual easing of lockdown restrictions occurs. As lockdown restriction ease we update our forecasts. Margins in 2H FY20 are likely to be harder hit than previously forecast, and the recovery likely to...

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Key message: We make further adjustments to our forecasts as a gradual easing of lockdown restrictions occurs. The sale of the European shipping business should give the balance sheet some strength. With the sale of the European shipping business and the start of an...

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Key message: We update our forecasts as we progress into a gradual unwind of lockdown restrictions. Bidvest has a relatively defensive portfolio of businesses but may not escape a loss in 2H FY20. As South Africa and the UK start to ease lockdown restrictions, we...