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AECI LIMITED

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Our opinion on the current state of AECI(AFE)AECI (AFE) is a leading producer of chemicals and explosives in South Africa, supplying products for the mining industry, water treatment, animal health, food and beverages, and the industrial sector. The company has a broad international presence, with businesses in Australia, North America, Europe, Asia, and Africa, employing 7,600 people across 22 countries. AECI also has a property division called "Acacia." The company has successfully diversified away from its exposure to South Africa, with only 40% of its total revenue coming from the country. AECI has demonstrated its ability to make acquisitions that boost turnover and profits. However, in its results for the six months to 30th June 2024, the company reported revenue down 4% and headline earnings per share (HEPS) down 57%. The company noted, "Sales volumes of mining chemicals are expected to improve on the back of an anticipated recovery in mining activity in South Africa." On a P/E ratio of 13.39 and a dividend yield (DY) of 0.9%, there is a belief that the share may fall further. Technically, the share has been trending sideways for most of the last ten years, indicating a lack of significant momentum in either direction. Within this broader trend, it appears to be approaching the bottom of a downtrend and may be ready for some recovery.
JSE:AFE
by PDSnetSA
Our opinion on the current state of AECI(AFE)AECI (AFE) is a leading producer of chemicals and explosives in South Africa. It supplies products for the mining industry, water treatment, animal health, food and beverages, and the industrial sector. It has businesses in Australia, North America, Europe, Asia, and Africa. It employs 7600 people in 22 countries. It also has a property division called "Acacia". This company has successfully diversified away from its exposure to South Africa (40% of total revenue) and shown its ability to make acquisitions which boost turnover and profits. In its results for the year to 31st December 2023, the company reported revenue up 5,4% and headline earnings per share (HEPS) down 11,7%. The company said, "In an environment characterised by high inflation and interest rates, supply chain and logistics challenges as well as declining commodity prices; the performance of AECI Mining, our core division, steered the results. Net debt improved to R4 338 million (2022: R5 345 million) driven by stringent net working capital management in the year." In a trading statement for the six months to 30th June 2024, the company estimated that HEPS would increase by between 54% and 60%. The company said, "One-off events, contributed to unusually high operating costs and consequently, the Group's earnings for the period are expected to be lower relative to the record performance achieved in the first half of 2023." On a P:E of 8,36 and a dividend yield (DY) of 1,84%, we believe that the share may fall further. Technically, the share has been trending sideways for most of the last ten years. Within that, it appears to be approaching the bottom of a downtrend and ready for some recovery.
JSE:AFE
by PDSnetSA
Our opinion on the current state of AFEAECI (AFE), a prominent player in the production of chemicals and explosives, has established a significant presence both within South Africa and internationally. Catering to a diverse range of industries including mining, water treatment, animal health, food and beverages, and the broader industrial sector, AECI has managed to spread its operational footprint across Australia, North America, Europe, Asia, and Africa. The company's workforce spans 7,600 employees in 22 countries, underscoring its global scale and reach. Additionally, AECI encompasses a property division known as "Acacia," further diversifying its business operations. The company's strategic focus on diversification has proven effective, with 40% of its total revenue now originating from outside South Africa. This international expansion, coupled with a successful acquisition strategy, has enabled AECI to enhance both its turnover and profitability, mitigating the risks associated with over-reliance on the South African market. For the fiscal year ending on 31st December 2023, AECI reported a revenue increase of 5.4%, although headline earnings per share (HEPS) experienced an 11.7% decline. The company attributed these results to the challenging operational environment, marked by high inflation and interest rates, supply chain and logistics disruptions, and declining commodity prices. Despite these hurdles, AECI's core division, AECI Mining, played a pivotal role in steering the company's performance. Moreover, the company has demonstrated effective management of its net debt, which improved to R4,338 million from R5,345 million in 2022, reflecting stringent net working capital management throughout the year. Currently, AECI is trading at a price-to-earnings (P:E) ratio of 8.31 and offers a dividend yield (DY) of 1.85%. These financial metrics suggest that the share price may face further decline. From a technical analysis perspective, AECI's share price has exhibited a sideways trend over the past decade. However, recent patterns indicate that the share might be nearing the bottom of its current downtrend, potentially setting the stage for a recovery phase. Given AECI's diversified business model, international presence, and strategic focus on managing its financial health, the company presents an interesting proposition for investors. Those with a keen eye on the chemicals and explosives sector, especially within the context of global operations, may find AECI's potential for recovery an opportunity worth monitoring, particularly if the company continues to navigate the challenging economic landscape effectively.
JSE:AFE
by PDSnetSA
Our opinion on the current state of AECIAECI (AFE) is a leading producer of chemicals and explosives in South Africa. It supplies products for the mining industry, water treatment, animal health, food and beverages, and the industrial sector. It has businesses in Australia, North America, Europe, Asia, and Africa. It employs 7600 people in 22 countries. It also has a property division called "Acacia". This company has successfully diversified away from its exposure to South Africa (40% of total revenue) and shown its ability to make acquisitions which boost turnover and profits. In its results for the six months to 30th June 2023 the company reported revenue up 19% and headline earnings per share (HEPS) up 5%. The company said, "EBITDA and EBIT margins remained stable at 10% and 7%, respectively, demonstrating the resilience of the Group’s core businesses in an operating environment characterised by ongoing volatility and change". In a voluntary update for the nine months to 30th September 2023 the company reported, "Revenue in AECI Agri Health and AECI Water was up on the prior period driven by higher selling prices and moderately higher sales volumes. However, the lag in cost recovery affected margins and is expected to correct in the last quarter of this year. The Group EBITDA and EBIT margins at 10% and 7%, respectively, were in line with the prior period". On a P:E of 8,43 and a dividend yield (DY) of 4,9%, we believe that it is relatively cheap at current levels. Technically, it has made a bottom at around R70 per share in April/May 2020 and has been trending up since then although there has recently been a cyclical sell-off from which it is now recovering.
JSE:AFE
by PDSnetSA
AECI Setting up for a bomb to R91.73Potential Inverse C&H is forming on AECI. The price action and momentum looks downwards and it looks like we are going to see some chop before the downside. Once the handle forms and shows that price doesn't want to break above the handle, we will see panic selling sending the price to the 200 MA. 7 to cross 21 Price to go to 200MA Target R91.73 ABOUT THE COMPANY: AECI (African Explosives and Chemical Industries) is a diversified South African company with a long history and a wide range of operations. Founding Year: AECI was founded in 1896 and has a history dating back more than a century. Diverse Operations: AECI is a diversified company with operations in various sectors, including mining, water, agriculture, chemicals, and more. Chemical Manufacturing: AECI is a significant player in the chemical manufacturing industry, producing a wide range of products, including explosives, specialty chemicals, and agricultural chemicals. Mining Solutions: The company provides a range of products and services to the mining industry, including explosives, initiation systems, and technical support for safe and efficient blasting. Water and Process: AECI's Water & Process business specializes in water treatment and process chemicals, serving industries such as pulp and paper, food and beverage, and industrial water treatment. Agricultural Solutions: The Agriculture business of AECI focuses on providing solutions for crop protection, plant nutrition, and soil health to support agricultural productivity.
JSE:AFEShort
by Timonrosso
Top5 oversold/overbought according to RSI & AECIFTSE/JSE All Share Top5 oversold/overbought according to 14day RSI indicator as follow: Oversold: PPC 25 Hyprop 25 Telkom 25 Woolworths 26 Advtech 26 Overbought: Omnia 86 Astral 78 Vukile Property 75 Sirius Real Estate 75 AECI 72 Spending some time on AECI. This remains one of my favorite Value stocks on the JSE. On 6 July 2019, I brought out a long recommendation on the company, with AECI reaching the short-term target set (R106) - The share price does find itself now in extreme overbought according to its 14 day RSI & pops the question – time to sell or hold? While it’s been outperforming the FTSE/JSE All Share on rolling 12- month period, you can clearly see the share price still got some strong momentum behind it. We can also see that it’s currently flirting with the top of an Ascending Triangle Pattern, with a break and close above R106, most probably looking for resistance only at R117. What is an Ascending Triangle? According to Investopedia.com, it's where: - The trendlines of a triangle need to run along at least two swing highs and two swing lows. - Ascending triangles are considered a continuation pattern, as the price will typically breakout of the triangle in the price direction prevailing before the triangle. Although, this won't always occur. A breakout in any direction is noteworthy. - A long trade is taken if the price breaks above the top of the pattern. - A short trade is taken if the price breaks below the lower trendline . - A stop loss is typically placed just outside the pattern on the opposite side from the breakout. - A profit target is calculated by taking the height of the triangle, at its thickest point, and adding or subtracting that to/from the breakout point. Should the resistance however hold and we see a pullback, could see the share price only seeking support at R100, which also correlates with the 50-day moving average. A break and close below this level will most probably see us back at the 200-day moving average (R95.90), which will definitely see me buying if I wasn’t long already (which I am). Fundamentally the company is healthy (read our report here: oldoak.co.za ). Thomson Reuters currently got a consensus target price of R121.70 on the company, while our target price currently on the company is R120.
JSE:AFE
by SchalkLouw