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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Making It Possible

Implats – The sun is still shining, let’s make some hay

Peak profits equal low multiples:   Implats should earn peak profits in FY21 and the current multiples reflect the unusually high profits and cash flows.  Implats is trading on 5.5x our estimate of FY21 earnings an at 3.4x our estimate of FY22 spot...

Forestry & Paper Textiles Fibre Weekly Update

H&M Q1 sales (to 28 Feb) development released this morning: Q1 sales were down 21% y/y (1,300 stores temporarily closed), while sales for 1-13 March (900 stores closed) are up 10% y/y as Germany (H&M’s largest market) and other markets have allowed certain...

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Key message: Strong results as the DIY/building market is experiencing a boom period. High cash generation reduces the debt requirement for the TBC acquisition. Cashbuild announced 1H FY21 results, with HEPS up 102% to 1540c. Revenue and operating profit increased by...

Sasol: Spotlight on earnings – latest profit drivers

Sasol’s spot earnings continue to rise as oil and chemical prices continue to rocket higher.  FY21 spot core HEPS are at R27.46 and FY22 spot HEPS are now at R54.51.  Refining margins are weak however and diesel cracks have fallen to $3/bbl.Asian ethylene...

Forestry & Paper: Lenzing FY 20A Textile Fibre Insights

Lenzing’s 500ktpa (single line, largest globally) DWP plant in Brazil is still expected to start-up in Q2 22e: The project is still on budget, with planned CapEx of USD 1.38bn and is 48% complete. The project is expected to have a cash cost of USD 300/t, with Lenzing...

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Key message: A strong order book reflects the fruits of a switch to focus on resources and large infrastructure projects. Risk management is strong and will be a key factor for success. Murray & Roberts released 1H FY21 results. A HEPS loss of 8c was reported off...

Afrimat – Earnings Update

Key message: We update our forecasts for the very strong iron ore prices as FY21 is now over. A higher medium-term iron ore price outlook increases our earnings forecasts. Afrimat’s FY21 year is complete, and we update our forecasts for the higher-than-expected iron...

Sasol: WPC2021 – Cautious outlook remains in place

Key themes:  The key themes at the conference are the changes facing the chemicals industry.  These include the energy transition and decarbonisation, plastic waste and the circular economy as well as electrification of vehicles and the permanent effects of...

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Key message: More clarity around the strategic focus of becoming a trusted supply chain partner in Africa. Integration risk due to the acquisitive led growth strategy will need to be watched. Imperial Logistics released 1H FY21 results. Continuing HEPS declined by 43%...

Forestry & Paper Weekly Price Update

Big moves for pulp this week in China and Europe: China pulp prices gained further ground on the back of good demand and continued arbitrage opportunities against the futures market. The May softwood contract on the Shanghai Futures Exchange settled at USD 973/t...