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 PossibleCashbuild: No Frills, No Fuss
Key message: We initiate on Cashbuild with an Overweight recommendation. With hardware stores open again (only for tradespeople), the Covid impact will cause only a short-term earnings impact, in our opinion. We initiate on Cashbuild with an Overweight recommendation...
Forestry & Paper Weekly Insights
PfR availability becoming more problematic: OCC prices increased by 19% w/w (+16% previous week). Concerns around availability of PfR grades, especially generated from the office paper and printing segments. Cartonboard and containerboard prices start to rise: RDM...
Lecta: European CWF and Specialties Insights
SAP’s European operations are roughly 2x Lecta’s: Lecta’s Q4 19A EBITDA margin expanded by 129 bps y/y to 8.5%. This compares to SAP’s 10.0% over the same period. FY 19A volumes declined by 12% y/y: This compares to the 11% decline for industry European deliveries....
Sasol: Spotlight on earnings – latest profit drivers
Spot earnings for FY21 dropped down to a loss of R22.51/share this week due to lower oil prices but also the significant decline in crack spreads in recent weeks. Petrol cracks remain at negative $5.7/bbl, but diesel cracks have now dropped and are close to...
DS Smith: European Packaging Insights
DS Smith have not seen any significant disruptions to their operations from the Coronavirus: Some plants have not been running full shifts, but sites have been pulling together to facilitate transfer of orders. Business has been busy, with ups and downs sector...
Smurfit Kappa: European Packaging
Limited disruption to their supply chain so far: All of their assets are operating, and they expect this to continue. Limited issues to date baring a short stop in Italy due to a deep clean. Order books have been strong, but…. They have been seeing good demand from...
Sasol: WPC 2020 – weak outlook for the ethylene chain
World Petrochemical Conference: In the last week, IHS hosted the World Petrochemical conference online, forums continue into this week.Weak outlook for chemicals: The outlook for chemical profitability remains extremely weak. Global capacity...
Forestry & Paper Weekly Insights
Mondi trading/COVID update focussed on liquidity (EUR 1.5bn available, with dividends suspended): Discretionary spend and all non-essential CapEx halted and some of their major projects slowed (FY 20e CapEx: c. EUR 600m, previously: EUR 700-800m). Annual mill...
Suzano: Largest producer of market pulp
Suzano provided an update today on how they are navigating COVID: They are “preparing for the worst and hoping for the best”. Their update was encouraging, with a strong focus on their employees (health safety and job security guaranteed during the pandemic). All...
Restricted content
Key message: We have updated our forecasts to reflect three months of lost business due to the lockdown and knock-on effects. Some companies will test their debt covenant levels. We adjust our earnings to reflect an assumed 3-month loss of business due to the lockdown...