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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FY21 Trading Update Key message: Continued strong demand for most products and margin uplift should support FY21 earnings. Chemical margins continue to improve. KAP released a Trading Update for the 11 months to May 2021.Integrated Timber: continued strong demand as...
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New Vehicle Sales – June 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 Commission’s...
Forestry & Paper Textile Fibre Update
Key YTD moves: Polyester +20%; HW DWP +44%; China-origin DWP +33%; medium-grade VSF +11% and high-end VSF +13%. In contrast, Lyocell is down 1%. VSF market flat to down, lacking lustre: Demand is currently being filled for minimal requirements. The VSF operating rate...
PPC – FY21 Results
Key message: FY22 will be a normal year and should reflect the real operational performance. While cement volumes will probably stabilise at 2H FY21 levels, average prices (up 3-4%) and volumes (up 10-12%) in FY22 should drive good earnings growth. PPC released FY21...
Sasol: Spotlight on earnings – latest profit drivers
Spot earnings remains flat this week at around R53.7/share for FY22. There is an additional R4.50/share of upside to spot earnings if US chemical prices maintain the current premium to Asian prices. Chemical prices continue to trend lower in Asia with...
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Key message: A strong order book platform has been set and execution will now follow. The ERI division looks set to grow strongly, with management medium-term targets well ahead of current levels (and our forecasts). Good execution on the growing order book may well...
Forestry & Paper Price Update
Pulp prices broadly stable: Pulp prices in China under slight pressure. Latest pulp inventory figures for the four major Chinese ports indicate stock levels increased by c.12% m/m in May to c.2.05mt, perhaps indicative of reduced purchases by end customers due to high...
Forestry & Paper: DS Smith Packaging Insights
H2/FY 21A snapshot (y/y % chg.): Revenue +8% (-1%), EBITDA -8% (-16%) with margin compression of 240bps (-233bps) to 13.6% due to OCC cost pressures (consumes c. 4mpta). Sequentially, there was slight margin expansion driven by the North American business. ROCE was...
Forestry & Paper: Textiles Fibre Price Update
Key YTD moves: Polyester +15%; HW DWP +44%; China-origin DWP +36%; medium-grade VSF +11% and high-end VSF +14%. In contrast, Lyocell is only up 1%. VSF prices continue to stabilize, with new offers partially higher: The VSF operating rate dropped to 68%. VSF inventory...
Forestry & Paper: Industry Insights
H&M Q2 21A sales update points to a strong recovery and positive outlook for textile demand: Q1 21A (1 March to 31 May 2021) net sales increased by 75% in local FX. At the start of Q2, c.1,300 stores were temporality closed vs. 140 at the end of Q2. Sales during...