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.
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Making It PossibleRestricted content
Key message: Looks like a good price for an asset earmarked for sale – 11.5 times FY19 EV/EBIT multiple or 12 times 1H FY20 annualised P/E. Question is – can the R3.4bn cash proceeds be well spent (given management is on the lookout for an IFM acquisition). Imperial...
Metsä Board Q1 20A Insights
Europe’s largest folding boxboard (FBB) and white kraftliner producer saw Q1 20A EBITDA down 40% y/y: Lower pulp prices were the key driver of weaker results (long SW pulp: 600ktpa). A 10% decline in pulp price impacts EBIT by -EUR30m. The Finnish strike reduced EBIT...
Afrimat – Initiation
Key message: Afrimat is exposed to the construction, industrial and commodity markets. With iron ore contributing approx. half of operating profit, earnings sensitivity is now weighted towards iron ore and exchange rate levels. An entrepreneurial management team...
Sasol: Strategies for survival – many ifs and buts
Price weakness: Many of Sasol’s product prices are at multiyear lows, impacted by lower oil prices and broad demand destruction.Fuel prices: Sasol’s fuel prices in South Africa have declined to the lowest levels since 2005 as oil prices declined and...
Forestry & Paper Weekly Insights
Europe’s largest UWF producer (up to 1.6mpta) takes downtime: Navigator idles 15% (700t/day and max of 2,000) of its UWF capacity from 22 April for 30 days due to the decline in demand. Prior to this, they had their second highest order book ever until mid-March. They...
SCA Q1 20A Insights
Europe’s largest independent kraftliner producer saw Q1 20A EBITDA down 34% y/y driven by price/mix: COVID-19 did not materially impact results, but SCA expects continued uncertainty. Delivery volumes to Scandinavia remained stable (slight weakness towards end of Q1)....
Sasol: Spotlight on earnings – latest profit drivers
At spot prices Sasol’s losses deepen and we now estimate the company will earn a large loss in 2H20 with a full year loss of R5.84/share. The loss in FY21 increases to R36.99/share. Large losses on currency, ethane and oil hedges contribute to the loss in...
UPM Q1 20A Insights
Q1 20A EBITDA down 18%: COVID-19 did not materially impact results, unlike the EUR 30m impact from the Finnish strike. It was a quarter of two tales, record EBIT for Specialty Papers and Raflatac, while Paper was under pressure. A trend we expect to continue for the...
Stora Enso Q1 20A Insights
Q1 20A EBIT down 46% to EUR 180m: This was at the top end of guidance. As guided, Q1 was negatively impacted by an exceptional mild winter in the Nordics and labour union strikes in Finland (impacting Paper and Containerboard). Planned/unplanned production downtime...
Raubex: SANRAL – Key Part of Economic Stimulus?
Key message: There is a relatively high probability that government will use SANRAL to kickstart infrastructure spending as a stimulus for the economy. Long overdue, this would boost the road construction sector. Raubex has issued updated guidance for FY20 earnings,...