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: Results well ahead of expectations as Bidcorp emerges from the Covid era in stronger shape and with more market share. Bidcorp released 1H FY23 results. Revenue increased by 28% (+25% in constant currency) driven by price inflation and volume growth....
NEPI Rockcastle: FY22 results and valuation update
Key message: NEPI Rockcastle’s FY22 results were excellent, with strong core operating performance from tenants as COVID restrictions were fully lifted and a resilient balance sheet that should underpin future inorganic growth. In our view, the strong run in the share...
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Key message: Loadshedding is impacting KAP relatively more than peers. KAP released 1H FY23 results. HEPS declined17% to 31c on a 12% increase in revenue but 8% decline in operating profit. Safripol is in the guided 7-9% margin range and with some price benefit from...
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Key message: Strong result across almost all divisions. A consistent performance not rewarded in the share price – the rump valuation is very cheap (6 times PE multiple). Super Group released 1H FY23 results, with HEPS increasing by 30% to 248.3c off a 35% and 26%...
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Key message: Debt levels increased substantially as WC/floor plans increased again after vehicle shortages. Finance costs and depreciation increased substantially but from abnormally low levels. HEPS will be impacted by these below the line costs in FY23 and FY24....
Forestry & Paper: Industry Insights
Mixed moves for pulp this week: Prices in Europe were up c.1% (but down in $). Softwood gained further ground in China, while hardwood came under pressure. NOREXECO pulp futures for CY 23E imply an 8-13% decline in Europe (2024: -15-26% decline), and a decline of...
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Key message: Weaker volumes as energy solutions replace home improvements amid lower general consumer spending. An expected improved operational performance in 2H should recover market share. We update our forecast after the release of the 1H FY23 results. Revenue...
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Key message: Solid performance with growth in core markets and market share gains. Loadshedding is providing business opportunities. Hudaco reported FY22 results. Revenue and operating profit increased 12% and 23% respectively (+22% and +45% on pre-Covid FY19). HEPS...
Forestry & Paper: Industry Insights
Further pressure on paper pulp prices: NOREXECO pulp futures for CY 24E imply a 16-28% decline in Europe, and a decline of 8-16% in China. Graphic Paper prices hold steady, except for CM: After factoring in a 30% discount to list pulp prices, the CWF/HW spread was up...
Sappi remains undervalued despite ticking all the right boxes in 2022, but macro likely to see this persist
Sappi remains undervalued despite ticking all the right boxes in 2022, but macro-outlook likely to see this persist: In FY 22A, Sappi printed a record EBITDA ($ 1.4bn), reduced net debt by $783mn (equal to -40%), with net debt/EBITDA reaching 0.9x (lowest level since...