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 PossibleForestry & 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...
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Key message: More divisional data has been released and we update our model and forecasts after a 1Q Trading Update. Nampak released a 1Q Trading Update. As part of ongoing discussions with stakeholders around the potential rights offer Nampak provided more detailed...
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New Vehicle Sales – January 2023 Key message: Passenger sales are slowing in 2023 – and the used car market is correcting to normal trade and retail values. NAAMSA released January 2023 new vehicle sales. Passenger and LCV sales increased 4.8% YoY with passenger sales...
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Key message: It is unlikely that Eskom in its current form can be fixed (operationally and politically). Financial stress may accelerate unbundling and privatisation. Eskom’s late release of the FY22 Annual Report (YE Feb) has been overshadowed by ongoing Stage 6...
Afrimat – Nkomati Site Visit
Key message: Afrimat has another side to it – incredibly strong community and government relationships. This may actually be their greatest asset. Afrimat hosted a site visit to the Nkomati Anthracite Mine in Mpumalanga. The mine has two open pits and an underground...
Forestry & Paper: Industry Insights
Pulp prices start edging down in Europe: NOREXECO pulp futures for CY 23E imply a 12-21% decline in Europe, and a decline of 9-20% in China. Recent UTIPULP data for November showed European pulp consumption was down for a third consecutive month (-13% y/y and -8%...
Forestry & Paper: Textile Fibre Insights
Q4 22A key prices changes: The imported hardwood (HW) DP price averaged $963/t ($: -18% q/q & +3% y/y; R: -15% q/q & +18% y/y). DP/pulp spread averaged $ 110/t. December 2022 key prices changes: Imported HW DP price averaged $ 908/t ($: -5% m/m & +0% y/y;...
Forestry & Paper: Industry Insights
Pulp prices stable to slightly softer: NOREXECO pulp futures for CY 23E imply a 13-21% decline in Europe, and a decline of 9-20% in China. In December, Suzano announced a $40/t (5%) price cut for BEK pulp in China. SCA has restarted its 900ktpa Östrand pulp mill...
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Key message: Passenger car sales ended up 19% on CY21. Premium car sales staged a recovery in December – up 90% YoY with the market share increasing to 7.3% (from 3.9% in November). NAAMSA released December 2022 new vehicle sales. Passenger and LCV sales increased...