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
Making It PossibleForestry & Paper: DS Smith Packaging Insights
DS Smith released a positive H1 22E trading update this morning: Structural demand trends and momentum persisted during May-October 2021. With “very” positive box volume growth, coupled with higher paper and box pricing, this has been more than enough to offset...
Forestry & Paper: Textiles Fibre Update
Key YTD moves: Cotton +40%; Polyester +35%; HW DWP +29%; China-origin DWP +17%; medium-grade VSF +26%; high-end VSF +25% and Lyocell -8%. Cotton is currently trading at a 48% premium to VSF (YTD average: 23%) and at a 167% premium to polyester (YTD average: 137%). The...
Forestry & Paper: Industry Price Update
Europe pulp prices stable, while US and China prices weaken: China prices continue to weaken further on the back of weaker futures and the ongoing government-mandated mill downtime. NOREXECO pulp futures for CY Q4 21E imply a 6-7% decline in Europe vs. a 0-1% decline...
Forestry & Paper: Huhtamäki Q3 21A Insights (Flexible Packaging)
Huhtamäki reported Q3 21A results this morning: Sales increased by 6% y/y (+2% q/q), while EBITDA declined by 10% y/y (-6% q/q). This resulted in EBITDA margin of 12% (-217 bps y/y and -100bps q/q). Encouragingly, the YTD margin is stable, highlighting the company’s...
Cement Import Monitor
August 2021 Key message: July and August imports have been relatively high given the looting and port issues over the period. Government localisation policies will have minimal impact on imports. August 2021 saw imports of 75 944 tons, after 79 516 tons were imported...
Forestry & Paper: Stora Enso Q3 21A Insights
Stora Enso reported strong Q3 21A results this morning: Sales up 24% y/y (-1% q/q), with EBITDA up 73% y/y and up 9% q/q. This resulted in robust margin expansion to 22.1% (+620 bps y/y and +190bps q/q) and ROCE over 13%. Net debt/EBITDA continues to improve reaching...
Forestry & Paper: Textiles Fibre Update
Key YTD moves: Cotton +50%; Polyester +40%; HW DWP +30%*; China-origin DWP +17%; medium-grade VSF +24%*; high-end VSF +21%* and Lyocell -8%. VSF prices jumps 10% w/w, with potentially more on the cards: Market activity has improved seeing a rebound in VSF prices as...
Calgro M3 – 1H FY22 Results
Key message: With the restructuring complete margins and profitability are improving, with a strong 2H expected. Calgro released 1H FY22 results. Revenue increased by 46% at an improved gross profit margin of 19.7% (17.5% developments, 60% memorial parks). Management...
Forestry & Paper: Industry Price Update
China pulp prices fall further: NOREXECO pulp futures for CY Q4 21E imply a 6-7% decline in Europe vs. a 2% decline in China. European CWF margins remain in the red, despite prices up 1.4% w/w: After factoring in a 30% discount to list pulp prices, the CWF/HW spread...
AfroCentric Investment Corporation: Initiation
Execution of a clearly defined strategy has seen AfroCentric Investment Corporation (ACT) deliver a robust performance in the last ten years: Revenue and adjusted EBITDA have increased by a CAGR of 20% and 15%, respectively. This has translated into diluted HEPS and...