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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Sasol: Spotlight on earnings – latest profit drivers

This week spot earnings are slightly higher as a weaker rand, higher oil prices and refining margins offset lower chemical prices.  Crack spreads remain in low but have been steady in recent weeks.Chemical prices continue to fall in Asia and monomer prices have...

Forestry & Paper: Weekly Price Update

Stalemate between suppliers & buyers in China sees Arauco and Canadian producers cut softwood pulp prices by USD 50/t: In contrast, softwood pulp prices in Europe & North America were up 3% & 1%, respectively. NOREXECO pulp futures unchanged with the CY...

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Key message: Strong demand is evident in all markets, but raw material cost pressure will impact 1H margins. We expect some input cost recovery in 2H. Mpact released a Trading Update for the five months to May 2021.HEPS for 1H FY21 is expected to be greater than 90c...

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Key message: An earnings enhancing transaction through Kian Ann increases exposure to two subsidiaries KKB and MIH. Net proceeds from the transaction should reduce debt levels further. Invicta announced the disposal of an effective 51.2% stake in the Kian Ann Group...

Sasol: Diverging chemical prices – more profit upside

Diverging chemical prices:  US and Asian chemical prices are diverging, and US prices are around $600/t higher than Asian prices, the highest since the start of our data series in the early 2000s. Margins are also diverging:  Higher oil and naphtha...

Forestry & Paper: Textiles Fibre Weekly Update

Key YTD moves: Polyester +15%; HW DWP +44%; China-origin DWP +42%; medium-grade VSF +11% and high-end VSF +13%. In contrast, Lyocell is only up 2%. VSF prices stable this week: The VSF operating rate was stable at 70%. VSF inventory days improved slightly to 23 days....

Forestry & Paper: Industry Insights

Mondi aligns their financing with their sustainability framework: Mondi signs new EUR 750mn five-year multicurrency RCF linked to its MAP2030 sustainable development goals. This replaces the existing EUR 750mn facility that was due to mature in July 2022.Mondi and...

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Key message: Weaker than our expectations – margins have dropped in 2H to approx. 4.9% from 6.1% in 1H. The Trading Update does not give enough detail to reconcile the difference, although the tone is overall positive. Super Group released a Trading Statement for...

Sasol: Spotlight on earnings – latest profit drivers

Spot earnings were lower this week and FY22E earnings are at R51.44/share.  Oil prices and refining margins were higher but chemical prices lower.  We have included Sasol’s recent oil hedges in our spot earnings estimates as well as the sensitivity...

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Key message: We adjust our FY21 forecasts in line with the trading update but continue to believe that Motus will be trading off a high base into FY22 and may struggle to replicate earnings due to the lower availability of used cars coming off internal rental fleets....