Research
The content listed is not for investment, financial, accounting or tax advice and is provided for informational purposes only.
Spear REIT – Path to a ZAR10bn asset base
Key message: as part of its strategic plans to grow market cap and improve liquidity towards SAPY/ALPI index inclusion, Spear has ambitions to grow its investment property portfolio from ZAR4.5bn at present to >ZAR10bn within the next five years. We explore its potential inorganic growth pipeline in this note.
Equites Property Fund – FY22 results and valuation update
Key message: despite a good set of results for FY22 and stable guidance for FY23, Equites’ share price has experienced a sharp de-rating since Apr-22. We think this has opened relative value and presents a rare opportunity to build a position in the counter
Forestry & Paper: Textile Fibre Insights
Key message: Cotton and polyester in the red, while VSF and DWP gain further ground. VSF inventory days down to 15.5 & the average op. is stable at 78%. VSF theoretical profit improves but still in the red at -USD 140/t (VSF/DWP spread +12% YTD). Spot DWP is now USD 1,135/t.
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Afrimat – FY22 Results
Key message: The medium-term investment case remains linked to the internally funded volume growth in iron ore, manganese and industrial minerals.
Raubex- FY22 Results
Key message: SANRAL tender cancellations and REIPP delays create uncertainty over order book growth.
Calgro M3 – FY22 Results
Key message: A steady performance going back to the basics. A healthy well-funded development pipeline provides medium-term growth visibility. Book value remains understated with developments valued at cost.
Forestry & Paper: Sappi Q2 22A Insights
Key message: Q2 much stronger than expected, with Sappi printing a record quarterly EBITDA of USD 337mn. Given the outlook for H2 22E, significant degearing provides Sappi with the opportunity to improve its capital structure and accordingly should drive a structural re-rating.
Forestry & Paper: Sappi Q2 22E Insights
Key message: Maintain OVERWEIGHT. Strong Q2 expected, marking the 7th consecutive quarter of improving EBITDA and potentially record EBITDA of USD 273mn (EPS of USD 0.24/share). We expect net debt/EBITDA to decline to 2.3x.
Forestry & Paper: Textile Fibre Insights
Key message: Cotton in the red, while VSF and DWP gain further ground. VSF inventory days down to 21.0 & the average op. is stable at 78%. VSF theoretical profit further in the red at -USD 149/t (VSF/DWP spread +8% YTD). Spot DWP is now USD 1,100/t.