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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Forestry & Paper: Textile Fibres Update

Key YTD moves: Cotton +32%; Polyester +26%; HW DWP +32%*; China-origin DWP +21%; medium-grade VSF +20%*; high-end VSF +19%* and Lyocell -8%. VSF prices jump 15%* in past two weeks: Market activity has improved seeing a rebound in VSF prices. The VSF operating rate...

Forestry & Paper: Industry Price Update

China pulp prices fall further ahead of Golden Week holiday: This was on the back of downtime and weaker futures prices (October: USD 832/t; November: USD 773/t; December: USD 725/t). Mass downtime for Chinese P&B producers is expected to persist well into Q4....

ADvTECH Ltd – A foundation for strong earnings growth

ADvTECH announced impressive 1H21 results, a 31% rise in normalised HEPS and a resumption of dividends (19c DPS). Growth is to some extent distorted by a lower base given the impact of COVID-19 on 1H20 results (normalised HEPS declined 2%). A sharp recovery was seen...

Forestry & Paper: Mondi Q3 21A Insights

Strong performance with underlying EBITDA up 27% y/y (+9% q/q) to EUR 388mn (CRe EUR 373mn): This was driven by strong volume growth and higher prices. This performance was somewhat impacted by planned maintenance (Q3 21A: EUR 30mn vs. Q3 20A: EUR 35mn) and “sharply...

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Key message: It is clear that either significantly higher tariffs (politically sensitive) or debt relief is required for Eskom to become sustainable. The IPP program is starting the shift to green energy (good) but the financial burden (on top of paying off Medupi and...

Afrimat – 1H FY22 Trading Update

Key message: 1H FY22 will get a boost from high iron ore prices, but the recent iron price pullback is not unexpected and built into our forecast. Growth is driven by production increases, not higher than normal commodity prices. Afrimat released a Trading Update for...

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Key message: Covid restrictions come and go, but the desire to eat-out-of-home has not changed. Bidcorp has gained market share. 1H FY22 will be impacted by ongoing Australian and New Zealand lockdowns. Bidcorp released FY21 results. Revenue declined by 4.8% (-9.2% in...

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New Vehicle Sales – September 2021 Key message: On 1 July 2021, the Competition Commission’s Guidelines for Competition in the South African Automotive Aftermarket become effective. The final guidelines were issued on 29 January 2021 and are available on the...

PPC – Operational Update

Key message: a positive trading update with the removal of an undertaking for a capital raise the highlight. PPC released a restructuring and operational update for the six months to September 2021.The highlight is the removal of the undertaking for a capital raise as...

Forestry & Paper: Industry Price Update

Global pulp inventories increase further, compounded by pressure from P&B shuts in China: August global pulp shipments +1.2% m/m but down 6.7% y/y (China: -2.9% m/m & -23.2% y/y; North America: +6.2% m/m & -1.5% y/y). The shipment-to-capacity ratio was...