Chronux Research

The leading independent research firm in South Africa

Chronux 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: The premium sector is starting a slow recovery as availability improves. NAAMSA released September 2022 new vehicle sales. Passenger and LCV sales increased 11.1% YoY with passenger sales up 9.7% YoY. Light Commercial sales increased by 14.9% YoY as local...

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Key message: No clarity on requirement for a capital raise – but operational performance improving. Nampak released a Trading Update for the 11 months to August 2022. The debt refinancing has not yet been finalised (management had hoped it would be completed by the...

Growthpoint Properties: FY22 results and valuation update

Key message: there were few surprises in Growthpoint’s FY22 results as most parts of its portfolio are showing stability, recovery and positive momentum, except for Globalworth and SA office investments which continue to lag. Current share price (down -22% YTD) and...

Forestry & Paper: Sappi set to divest 3 of its European mills

Sappi has concluded an agreement with Aurelius Investment Lux One (“Aurelius”) to divest its: Maastricht mill (Netherlands) - lacked pulp integration and high cost mill: 260kpa CWF (80ktpa) and paper board (180kpta) sold to printers and packaging converters globally....

Forestry & Paper: Industry Insights

Pulp prices steady but stronger USD drives European pulp prices higher: NOREXECO pulp futures for CY 23E imply a 14-19% decline in Europe, and a decline of 11-22% in China. Demand and prices for resale pulp surge in China as weak RMB weighs on import market. YTD to...

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Key message: Russia will contribute well to FY22 before the impact of sanctions in FY23, but Mongolia should offset some of the decline. Barloworld released a Trading Update for the 11 months to August 2022. Revenue and operating profit have increased by double...

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Key message: Margins under pressure as costs increase while demand slows. Local manufacturing has been a competitive advantage and resulted in market share gains. We update our forecast after the release of the FY22 results. Revenue decreased by 2.2% as lower volumes...

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Key message: We believe an earnings base of 1700-1900c is more normal for Cashbuild as demand starts to slow after the post-Covid DIY boom. We update our forecasts after Cashbuild released FY22 results. Revenue decreased by 12% (down 7% excluding the looted stores)....

Forestry & Paper: Industry Insights

Despite slowing paper and board market in China, pulp prices stable for now: Restricted availability and low pulp stocks held by most customers have kept prices for pulp imports from declining in China. The domestic paper and board sector has continued to struggle...

Forestry & Paper: Textile Fibre Insights

Key w/w moves: Cotton 0%; ICE cotton contract -5%; Polyester +1%; HW DWP 0%; China-origin 0%, medium-grade VSF -1%; and high-end VSF -1% and Lyocell 0%. Cotton is now trading at a 4% premium to VSF (2021 average premium: 30%) and an 86% premium to polyester (2021...