By Sithembile Bopela, Chantal Marx, Pritu Makan, Zimele Mbanjwa, Motheo Tlhagale, Khumbulani Kunene
Coronation Fund Managers (CML)
Coronation Fund Managers is one of Southern Africa's most successful third-party fund management companies. It is a pure fund management business that offers both individual and institutional investors access to local and global expertise across all asset classes, including specialist Global Emerging Markets, Africa and Private Equity units.
The company's 1H26 results print was disappointing, leading to pressure on the share price over the last couple of months. Performance fees missed expectations and assets under management (AUM) fell sharply due to market volatility in March. Positively, net flows held up well and markets have stabilised since the end of March.
The biggest risk to this company is persistent underperformance of its strategies, lower market returns, a resumption of large outflows, and fee pressure.
Coronation is trading on a forward PE of 8.8 times and a price to AUM of 2.2% - well below its average ratings over time of 10.7 times and 2.7%, respectively. We think the name offers decent value at current levels and could do well in the event of a local market recovery in the near-to-medium term.
Vukile Property Fund (VKE)
Vukile Property Fund is a high-quality, low-risk, specialist retail real estate investment trust (REIT) with a geographically diversified portfolio of property assets valued at R64 billion, based in South Africa, the Iberian Peninsula and Italy. The fund specialises in owning and managing shopping malls, which includes everything from rural and commuter malls in South Africa to major commercial centres in Europe through their subsidiary, Castellana Properties.
The group delivered a robust performance for the full year ended 31 March, boasting strong trading metrics across both the local and offshore portfolios, supported by ongoing and innovative property asset management initiatives. In addition, the integration of recently acquired assets in core markets also supported overall growth. The balance sheet remains healthy, with accretive capital allocation and asset rotation initiatives further enhancing the asset base, and, as a result, the loan-to-value ratio saw a further improvement. Looking ahead, dividend guidance for FY27 remains robust with the group making progress towards achieving its projected dividend per share growth target of between 10% and 12% over the medium term.
Vukile is trading on a forward dividend yield of around 6.6%. Long term, we continue to like the fund's retail focus and offshore diversification strategy.
Optasia (OPA)
Optasia is a global fintech firm that leverages its artificial intelligence (AI)-driven platform to integrate credit products into telecommunication and mobile money ecosystems. The company offers a platform that enables mobile network operators and financial institutions to deliver credit through data monetisation, micro financing, and airtime credit solutions. Optasia serves clients worldwide.
In FY25, revenue growth (+76% to $265 million) was driven by robust demand across all segments on the back of strength in Airtime Credit Solutions (ACS (+17.4% to $97 million) and Micro Financing Solutions (MFS), which more than doubled to $168 million. Furthermore, the group benefitted from management's ability to leverage AI and offer instant loan approvals and diversified product solutions such as Buy Now Pay Later (BNPL).
The company's medium-term growth prospects remain attractive with leadership focused on executing against its stated scale strategy, which hinges on deepening existing partner relationships with mobile network operators (MNOs), expanding product coverage and driving further geographic diversification. Optasia continues to progress its deployment pipeline, targeting new markets to further expand its geographic footprint. By embedding alternative B2B micro-lending solutions like the new SME merchant product, the company is successfully building ecosystem stickiness that should outlast near-term compliance friction.
Optasia is trading on a forward PE of 14.7 times, a slight premium to peers, but which we still view as undemanding given its superior medium-term growth outlook, notwithstanding prevailing near-term headwinds.
AVI (AVI)
AVI Limited is a fast-moving consumer goods (FMCG) company with a portfolio of more than 50 leading South African brands. The group operates across four key business segments: Entyce Beverages, which manufactures and markets hot beverages including tea, coffee and creamers under brands such as Five Roses, Freshpak, House of Coffees and Frisco; Snackworks, which produces sweet and savoury biscuits, snacks and confectionery including Bakers and Willards; I&J (Irvin & Johnson), which operates in fishing, seafood processing and frozen convenience foods serving retail, foodservice and export markets; and AVI Fashion Brands, which comprises footwear, apparel, cosmetics, personal care and accessories businesses including Spitz, Kurt Geiger, Green Cross, Gant, Lacoste, Carvela and Indigo Brands.
Combined with a lean cost structure, superior profitability and strong cash generation, AVI offers an attractive way to gain exposure to a recovering South African consumer, with earnings growth expected to accelerate as input cost tailwinds and efficiency gains flow through to the bottom line. We do, however, note transitory risks from a sustained rise in oil prices which could raise input and logistics costs while weakening consumer spending, limiting the margin and earnings upside expected for AVI. However, management's demonstrated history of operational efficiencies and ongoing cost-saving initiatives and restructuring benefits should help protect margins.
From a valuation standpoint, AVI is trading on a forward PE of 10.4 times, a 19% discount from its historical average and 31% discount to regional peers - which we view as cheap given the company's quality. Bloomberg aggregated consensus for the company is currently pricing in a 12-month potential price return of ~33.2% relative to current prices. Moreover, the company currently boasts a one-year forward dividend yield of 8.3%.
Cashbuild (CSB)
Cashbuild Limited operates as a prominent retailer within the building materials and associated products industry. Operations are divided across key retail platforms and brands, including Cashbuild, P&L Hardware, and Allbuildco, which offer diversified product categories such as cement, decorative items, roofing, timber, and bricks. Its geographic reach extends across Southern Africa, with a strong footprint and key markets located in South Africa, Eswatini, Lesotho, Namibia, and Botswana. Strategic positioning relies on a multi-brand retail model designed to target various customer segments across all Living Standards Measure (LSM) bands, supported by the acquisition of complementary hardware stores.
Cashbuild's financial performance over the last few years reflects a business operating in a difficult macroeconomic environment, with uneven demand, margin pressure and earnings volatility. Encouragingly, for the six months ended 28 December 2025, the group reported revenue of R6.3 billion (+3.5% y/y) and headline earnings per share (HEPS) of 675.2 cents (+17.9%), demonstrating notable resilience through a combination of store network expansion, strategic acquisitions and disciplined execution across both established and newly-entered geographies. During the period, the company acquired a 60% controlling interest in Allbuildco Holdings for R96.4 million, adding three Amper Alles stores to its portfolio, while disposing of its Malawian operations. This represents a deliberate reallocation of capital towards higher-return markets and differentiated customer segments that broaden the addressable opportunity set beyond the core Cashbuild franchise.
Although management expects trading conditions to remain challenging, the near-term outlook is encouraging, with group revenue for the subsequent seven weeks tracking 8% higher than the prior comparative period.
Cashbuild is currently trading at a meaningful discount relative to both its industry peers and its own historical valuation. By our estimates, the stock is valued at a 12-month forward PE of 8.5 times, well below its long-term average of approximately 12 times and beneath the peer group average of 13.9 times. This disparity suggests the market is pricing in weaker growth prospects and/or lower profitability relative to competitors.
