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KAP LIMITED

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Our opinion on the current state of KAPKAP International Holdings (KAP) is a diversified industrial company that produces and markets timber, chemicals (PET and related chemicals), bedding, and car parts. It also has a logistics division. The acquisitions of Safripol and Hosaf were integrated into a polymers business under the Safripol name. The bedding division showed strong growth with new investment in infrastructure and manufacturing capability, while growth in the automotive parts division was muted. The company was 43% owned by Steinhoff, which has now divested completely. The renewal of the government's Automotive Production and Development Programme (APDP) until 2035 will be a boost for KAP's parts manufacturing business. The timber division is ramping up after the lockdown, and demand for its products has remained buoyant. The automotive components division was severely impacted, and the post-lockdown recommencement has been slow. The bedding division was able to operate through the lockdown with strong demand for medical and agricultural needs. Polymers also operated throughout the lockdown. In a report on 20th April 2022 into the flooding in Natal, the company said, "The Company’s operations in the region have experienced some temporary operational and supply chain disruptions, which are in the process of being resolved." In its results for the six months to 31st December 2023, the company reported revenue decreased by 2% and headline earnings per share (HEPS) down 36%. The company's net asset value (NAV) increased by 1% to 478c per share. The company said, "EBITDA decreased by 13% to R2.0 billion, while operating profit before capital items decreased by 17% to R1.3 billion, mainly attributable to Safripol." There was a 20% increase in finance costs due to higher interest rates. In a trading statement for the year to 30th June 2024, the company estimated that HEPS would decrease by between 0% and 8%. Technically, the share made a low of 127c in March 2020 and subsequently made a cycle low of 201c on 10th October 2023. Since then, it has been trending up on improved international prospects. Obviously, the logistics problems at Transnet are having an impact. We think it may represent good value at current levels, but it is volatile.
JSE:KAP
by PDSnetSA
Our opinion on the current state of KAPKAP International Holdings (KAP) is a diversified industrial company that produces and markets timber, chemicals (PET and related chemicals), bedding, and car parts. It also has a logistics division. The acquisitions of Safripol and Hosaf were integrated into a polymers business under the Safripol name. The bedding division showed strong growth with new investment in infrastructure and manufacturing capability, while growth in the automotive parts division was muted. This company was 43% owned by Steinhoff, which has now divested completely. The renewal of the government's Automotive Production and Development Programme (APDP) until 2035 will be a boost for KAP's parts manufacturing business. The timber division is ramping up after the lockdown, and demand for its products has remained buoyant. The automotive components division was severely impacted, and the post-lockdown recommencement has been slow. The bedding division was able to operate through the lockdown with strong demand for medical and agricultural needs. Polymers also operated throughout the lockdown. In a report on 20th April 2022 regarding the flooding in Natal, the company said, "The Company’s operations in the region have experienced some temporary operational and supply chain disruptions, which are in the process of being resolved." In its results for the six months to 31st December 2023, the company reported revenue decreased by 2% and headline earnings per share (HEPS) down 36%. The company's net asset value (NAV) increased by 1% to 478c per share. The company said, "EBITDA decreased by 13% to R2.0 billion, while operating profit before capital items decreased by 17% to R1.3 billion, mainly attributable to Safripol." There was a 20% increase in finance costs due to higher interest rates. In a trading statement for the year to 30th June 2024, the company estimated that HEPS would not differ by more than 20% from the previous year's 47,3c. Technically, the share made a low of 127c in March 2020 and subsequently made a cycle low of 201c on 10th October 2023. Since then, it has been trending up on improved international prospects. Obviously, the logistics problems at Transnet are having an impact. We think it may represent good value at current levels, but it is volatile.
JSE:KAP
by PDSnetSA
Our opinion on the current state of KAPKAP International Holdings is a diversified industrial entity in South Africa, with a portfolio that spans timber production, chemical manufacturing (including PET and related chemicals), bedding, automotive parts, and logistics. The company's strategic acquisitions, such as Safripol and Hosaf, have been consolidated into its polymers business, strengthening its market position in the chemicals sector. Despite facing challenges in the automotive parts division, KAP has seen robust growth in its bedding division, buoyed by new investments in infrastructure and manufacturing capabilities. The full divestiture by Steinhoff, which previously owned 43% of KAP, marks a significant shift in the company's shareholder structure. The extension of the government's Automotive Production and Development Programme (APDP) until 2035 is expected to positively impact KAP's automotive parts manufacturing business, offering long-term support and growth prospects. KAP's timber division has shown resilience and growth post-lockdown, with sustained demand for its products. However, the automotive components division experienced significant challenges due to the lockdown, with a slow recovery post-restriction lifting. The bedding division, on the other hand, maintained operation throughout the lockdown, catering to medical and agricultural needs, showcasing the diversity and adaptability of KAP's business model. The flooding in Natal in April 2022 caused temporary operational and supply chain disruptions for KAP's operations in the region, highlighting the environmental and logistical challenges the company faces. For the six-month period ending on 31st December 2023, KAP reported a slight decrease in revenue by 2% and a significant reduction in headline earnings per share (HEPS) by 36%. Despite these challenges, the company's net asset value (NAV) saw a slight increase of 1% to 478c per share. The decline in EBITDA and operating profit, particularly within the Safripol division, alongside a 20% increase in finance costs due to rising interest rates, underscore the financial pressures confronting KAP. From a technical analysis perspective, KAP's share price has experienced volatility, reaching a low in March 2020, followed by an uptrend until April 2022, before entering a downward phase. The increased load shedding has further impacted the company's operational efficiency and profitability. Considering the current market dynamics and KAP's diversified industrial portfolio, the company may offer value at its current price levels. However, potential investors should carefully assess the impact of external factors such as load shedding, interest rate fluctuations, and the overall economic environment on KAP's future performance and growth trajectory.
JSE:KAP
by PDSnetSA
Our opinion on the current state of KAPKAP International Holdings (KAP) operates as a diversified industrial entity with a focus on producing and marketing timber, chemicals (PET and related chemicals), bedding, and car parts, alongside managing a logistics division. The company's integration of acquisitions Safripol and Hosaf into a consolidated polymers business under the Safripol brand exemplifies its strategic expansion efforts. Notably, the bedding division has experienced significant growth, supported by new investments in infrastructure and manufacturing capabilities. However, growth in the automotive parts division has been less pronounced. Previously, Steinhoff owned a 43% stake in KAP, but it has since fully divested its holdings. The extension of the government's Automotive Production and Development Programme (APDP) until 2035 is anticipated to benefit KAP's parts manufacturing operations. The timber division of KAP is witnessing a resurgence following the easing of lockdown restrictions, with sustained high demand for its products. Conversely, the automotive components division faced considerable challenges due to the lockdown, with a slow recovery post-lockdown. The bedding division managed to maintain operations during the lockdown, driven by strong demand for medical and agricultural products, similar to the polymers division, which also remained operational. Following the flooding in Natal in April 2022, KAP reported temporary operational and supply chain disruptions in the region, which are currently being addressed. For the fiscal year ending on 30th June 2023, KAP announced a 6% increase in revenue but a 43% decrease in headline earnings per share (HEPS). This performance dip was attributed to several factors, including reduced domestic sales volumes due to extensive loadshedding, the necessity of increased export sales at lower margins to normalize inventories, damage to equipment from unplanned infrastructure disruptions, and rising finance costs. Looking ahead to the six months ending on 31st December 2023, KAP forecasts a decline in HEPS by between 25% and 36%. The share price experienced a low of 127c in March 2020 and showed an upward trend until April 2022. However, the share has been on a downward trajectory since then, with increased loadshedding adversely affecting the company's operations. Despite these challenges, the current valuation of KAP shares may offer good value, considering the broader context of the company's diversified operations and strategic responses to prevailing economic conditions.
JSE:KAP
by PDSnetSA
Our opinion on the current state of KAPKAP International Holdings (KAP) is a diversified industrial company which produces and markets timber, chemicals (PET and related chemicals), bedding and car parts. It also has a logistics division. The acquisitions of Safripol and Hosaf were integrated into a polymers business under the Safripol name. The bedding division showed strong growth with new investment in infrastructure and manufacturing capability. Growth in the automotive parts division was muted. This company was 43% owned by Steinhoff - which has now divested completely. The renewal of the government's Automotive Production and Development Programme (APDP) until 2035 will be a boost for KAP's parts manufacturing business. The timber division is ramping up after the lockdown and demand for its products has remained buoyant. The automotive components division was severely impacted, and the post-lockdown recommencement has been slow. The bedding division has been able to operate through the lockdown with strong demand for medical and agricultural needs. Polymers also operated throughout the lockdown. In a report on 20th April 2022 into the flooding in Natal the company said, "The Company’s operations in the region have experienced some temporary operational and supply chain disruptions, which are in the process of being resolved". In its results for the year to 30th June 2023 the company reported revenue up 6% and headline earnings per share (HEPS) down 43%. The company said, "These factors affected the group’s performance during the year: • lower domestic sales volumes, as the frequency of loadshedding beyond Stage 4 contributed to lower customer and consumer demand; • increased export sales at lower margins required to normalise inventories; • equipment damage due to unplanned infrastructure disruptions; and • increased finance costs.". In a trading statement for the six months to 31st December 2023 the company forecasts that HEPS will fall by between 6,2c and 24,8c per share which is more than 20%. Technically, the share made a low of 127c in March 2020 and was trending up until April 2022. Since then it has been falling. Obviously, the increased loadshedding is having an impact. We think it may represent good value at current levels.
JSE:KAP
by PDSnetSA
TARGET REACHED for KAP Limited at R2.25 - WarningReversal Diamond Formation formed on the Daily chart. This formation is a normally a big fight between the bulls and the bears. Once the price breaks below it, sets the bar for the next momentum slide. Which in this case was down. We had other indicators confirming the downside to come including. 200>21>7 _ Bearish RSI <30 - Bearish And our first target was at R2.25 which hit yesterday. It was a LONG hold but at least, some traders would have banked daily interest from shorting. Right now it's dangerous to just buy the stock because the price is so low. instead we need the market to turn and move in an uptrend establishment before we buy. Until then, I expect the market to continue to drop which I'll save the analysis for another day. EXTRA FACTS ABOUT KAP LImited you may not know. Formation: KAP Industrial Holdings Limited was established in 2004. Diversified Operations: KAP's operations are diversified and extend across sectors such as logistics, passenger transport, manufacturing, and distribution. Major Subdivisions: The company operates in two main divisions: diversified industrial and diversified logistics. Global Presence: KAP has a broad geographical footprint and operates in more than 20 countries, primarily in sub-Saharan Africa and parts of Europe. Noteworthy Brands: The company owns or is involved with numerous well-known brands such as Unitrans, PG Bison, Feltex, and DesleeMattex. The company's name, "KAP," is an acronym which stands for "Klipspringer, Algoa, and Peninsula," representing the names of three South African buses that were part of the company's origins.
JSE:KAPShort
by Timonrosso
KAP Industrial showing strong downside with this rare pattern Reversal Diamond Formation formed on the daily. This is a broadening reversal pattern that forms in the shape of a Diamond. Because the previous trend was up, the Diamond moved sideways and then the price broke down, shows the likelihood of it dropping is bigger. 200>21>7 _ Bearish RSI <30 - Bearish Target R2.25 ABOUT KAP Industrial Holdings Limited (KAP) (Founded in 2004) is a diversified industrial conglomerate headquartered in Cape Town, South Africa. It's one of the largest industrial groups in the country which also operates in a range of industries, including logistics, automotive components, timber, chemicals, and more. Some of the company's well-known brands include Safripol, PG In 2020, KAP employed over 20,000 people across its various businesses and operations.
JSE:KAPShort
by Timonrosso
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