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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Key message: High interest rates start to bite, with NAAMSA expectations of over 5% growth for CY23 being moderated to flat as the year progresses. NAAMSA released April 2023 new vehicle sales. Passenger and LCV sales declined 1.2% YoY with passenger sales down 6.1%...
Forestry & Paper: Industry Insights
Pulp prices down 7-9% in China, with pressure in all other regions as well: This has already seen some suppliers in China and Canada taking downtime or holding back from issuing new offers. NOREXECO pulp futures for CY 23E imply a further 5-9% decline in Europe, and a...
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Key message: The debt restructuring plan has been concluded, shifting maturity dates to 30 June 2024. We believe the rights issue required will be no more than R1bn. Nampak released a Trading Update for the five months to 28 February 2023 and an update on debt...
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Key message: Durable consumer goods are starting to be impacted by the weak economic environment just as new vehicle supply recovers strongly. NAAMSA released March 2023 new vehicle sales. Passenger and LCV sales declined 1.1% YoY with passenger sales down 6.4% YoY....
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Survivorship bias evidence growing: despite a weak economic environment, the listed industrial sector posted some surprisingly strong numbers in the recent results season. We see this as evidence of the larger, better capitalised companies able to survive weak periods...
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Key message: Current high coal volumes should be replaced by other volumes in time – port and terminal growth opportunities are attractive. Grindrod released FY22 results. Revenue and trading profit grew by 39% and 26% respectively as drybulk and port volumes...
Forestry & Paper: Industry Insights
Pulp prices stable to slightly down, with more relief for European pulp buyers: Hardwood DP was stable this week, while softwood DP decreased by 2% w/w. NOREXECO pulp futures for CY 23E imply an 5-9% decline in Europe, and a decline of 7-9% in China, with...
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Key message: Russia surprised in the profit contribution despite the expected fall in revenue. SA saw a long-awaited mining fleet replenishment cycle start. Barloworld released a Trading Update for the five months to February 2023. Revenue increased by 15%, with...
Forestry & Paper: Industry Insights
Pulp prices stable to slightly down: Hardwood DP was stable this week, while softwood DP decreased by 1% w/w. US spot pulp prices drop $20-50/t with demand softening as paper mills increase downtime. NOREXECO pulp futures for CY 23E imply an 5-9% decline in Europe,...
Cement Import Monitor
Key message: Cement imports were down 31% in CY22, although port disruptions and a weak currency likely are having an impact. Import protection from government now appears unlikely. July to December 2022 saw imports of 348kt, down 25% from the same period in 2021....