The JSE welcomed three significant new listings this year, each bringing a special story to the local bourse.
Rainbow Chicken, WeBuyCars, and Boxer enjoyed varying degrees of performance and investor confidence since their debuts, reflecting the diverse sectors they represent.
Poultry producer Rainbow Chicken, now valued at more than R3.3bn, listed on the JSE on June 26 , after its unbundling from RCL Foods. That was an important chapter for the group that has a fully integrated business model covering all stages of chicken production. Rainbow operates 165 farms, 1,288 houses, six animal feed mills and a 50% stake in waste-to-value joint venture Matzonox.
CEO Marthinus Stander hailed the listing as a step towards re-establishing Rainbow as a stand-alone leader in the poultry and feed industry. But its share price remains subdued, reflecting challenges in a competitive market. Rainbow traded at R3.70 on Friday with its highest price, R4.69, recorded in June before officially trading.
Parent company RCL Foods has flourished since the unbundling, gaining more than 58% year to date. The separation enabled RCL Foods to resume dividend payments and refocus on its long-term sustainability strategy, benefiting shareholders and stabilising operations.
WeBuyCars, valued at R18bn, made waves when it listed on April 11at R20 per share and rose 110% in eight months. The used-car dealer, which operates 15 supermarkets and employs 2,800 staff around the country, capitalised on its hybrid model of buying vehicles from private sellers and reselling them to dealers and consumers.
The company’s separation from Transaction Capital was attributed to its particular market positioning and rapid growth potential. Investors responded positively with the share price more than doubling since the IPO, indicating strong confidence in the used-car market amid economic pressure.
But its parent company continues to face challenges. The group is valued at R1.9bn, down 12% year to date. The decline is not recent. The company has been in turmoil for years. Its valuation has fallen 79% since March last year when its SA taxi division ran into difficulties because taxi owners were not repaying loans.
Boxer’s November 28 JSE debut was one of the year’s most keenly awaited. Initially priced at R54 per share, its stock surged as much as 20% on the first day of trade, peaking at R64.88. The IPO raised R8.5bn, making it the largest listing on the JSE this year. It is trading not far off that now.
Boxer’s position as the only discount retailer on the JSE has driven strong investor demand. The company’s focus on affordability, product variety and expansion in underserved markets positioned it as a key player in SA’s retail sector.
Opportune Investments owner and CIO Chris Logan said Boxer’s strong JSE debut was driven by its excellent marketing, a solid track record of growth, high returns and strong cash flow that are expected to continue well into the future. He said the JSE had a shortage of great growth stocks such as Boxer, as shown by the strong recent performance of Outsurance and WeBuyCars.
Logan cautioned that a risk for Boxer is the potential loss of its talented top management team. But he said that with discount retail penetration in SA at just 6% of grocery retail sales compared with 32% in Poland, the sector still had significant room for growth, especially in today’s tough economy.
Logan said Boxer had a competitive edge as a “soft discounter” offering more product variety, fresh food and in-store counters such as bakery and butchery, which hard discounters lacked, while maintaining low prices with “combo deals and promotions.”
The listing has been transformative for parent company Pick n Pay, which retains a 65.6% stake in Boxer. Proceeds from the IPO enabled Pick n Pay to reduce its R4bn debt and strengthen its balance sheet, a turning point in its turnaround strategy under CEO Sean Summers.
“It’s probably worth highlighting, given Boxers current market cap of R30bn, that Pick n Pay’s acquisition of Boxer in 2002 for R185m is probably one of the best deals in SA corporate history, allowing Pick n Pay to survive the meltdown in its traditional business,” he said.
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