Research
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Cement Import Monitor
Key message: September imports were high at over 150kt – supply chain issues do not seem to be impacting cement shipments.
Sirius Real Estate – 1H FY22 results update and BizSpace acquisition
Key message: Sirius’ strong core performance and vigorous inorganic growth pipeline, well-supported by capital markets, combine for highly compelling growth potential. However, this is fully reflected in the share price and its extensive premium rating relative to peers in our coverage.
FORESTRY & PAPER: Textiles Fibre Update
Key message: Cotton in the green, while polyester and VSF in the red. VSF inventory days improve to 23.0 with the average operating rate increasing to 60%. VSF/DWP spread is up 27% YTD.
SA Banks
Annual growth rates in the SARB’s gross loans and advances category accelerated from 1.9% in August to 3.7% in September. Retail annual loan growth of 5.9% has remained in line with August with corporate faring considerably better (0.6% vs -3.3%), but still lags significantly. On our methodology, industry advances growth was 3.2 % YoY, 2.2% YTD and 0.6% MoM, all accelerating on the August data. Annual SARB loan growth has exceeded deposit growth (3.2%) in September, but as a ratio remains near lows.
FORESTRY & PAPER: Sappi Q4 21A Insights
Key message: Results broadly in line with our expectations. However, USD 30mn of EBITDA “lost” in Q4 21A due to logistic constraints. Q1 22E guidance better than our base case but CapEx guidance of USD 395mn disappointing in terms of FCF generation in FY 22E.
FORESTRY & PAPER: Industry Update
Key message: 1st signs of weakness for Europe pulp this week. Graphic Paper prices make further ground & containerboard continues to reach new highs.
Raubex- 1H FY22 Results
Key message: With the roads order book relatively full, renewable energy offers Raubex further growth opportunities. The announcement of external funding for Eskom from COP26 should unlock public and private renewable energy spend. This is significant for Raubex as the current valuation requires growth in the order book to approx. R20bn.
FORESTRY & PAPER: Sappi Q4 21E Insights
Key message: Maintain OVERWEIGHT. Strong Q4 expected, marking the 5th consecutive quarter of improving EBITDA to USD 189mn and EPS of USD 0.11/share. We expect net debt/EBITDA to decline to 3.8x.
FORESTRY & PAPER: Textiles Fibre Update
Key message: Cotton in the green, polyester in the red and VSF stable. VSF inventory days are currently 23.5 with an average operating rate of 58%. VSF/DWP spread is up 28% YTD.
Forestry & Paper: Industry Price Update
Key message: Pulp prices under further pressure in China. Graphic Paper prices stable but producers confirm further surcharges related to energy costs. In our view, surcharges across the supply chain are likely to further increase the trend towards online communication.