This Week In The News
NEWS IN SHORT
- Looking to buy into the next big growth market then turn your attention to AI. Nvidia is taking Apple’s place as the tech heavyweight to own due to the seemingly insatiable demand for chips used to power large language models.
- There has been a 22% spike in queries from South African expats in the past two or three months wanting to come back. Cost of living, nanny culture and small homes abroad are among the reasons for coming back to South Africa. [Sunday Times]
- South Africa, in an effort to preserve a key export industry, last month announced a 150% tax deduction on investments in the local production of electric and hydrogen-powered vehicles from March 2026.
- Ferrari was accused in a US lawsuit of failing to fix a “dangerous safety defect” with the brakes in some of its luxury sports cars despite issuing multiple recalls.
- “The average nominal take-home pay for February 2024 reached R16,085, which was 4.6% growth on a year-ago and also 2.5% up on January’s R15,692,” said Shergeran Naidoo, BankservAfrica’s Head of Stakeholder Engagements.
- Between 2014 and 2024, the South African government raked in over R730 billion in revenue from the General Fuel Levy (GFL), making the tax the fourth-largest revenue item in the state’s budget.
- As many as 12 vehicles from Jody Scheckter’s personal collection are going under the hammer at the RM Sotheby’s Monaco auction on 10-11 May 2024, including his championship-winning Ferrari.
Capitec disrupts business banking by charging the same as personal banking.
The following new transaction fees will save businesses up to 50%:
- Free virtual card for online transactions
- Zero fees on local card payments
- R1 for payments and transfers to other Capitec accounts
- R2 for payments and transfers to other banks R3.50 per debit order
- R6.50 for immediate payments
- A low, fixed monthly fee of R50
The top 10 pre-owned cars sold in 2023 are:
| 1. | Ford Ranger | 20 156 |
| 2. | Toyota Hilux | 17 555 |
| 3. | VW Polo | 11 406 |
| 4. | Polo Vivo | 10 990 |
| 5. | Toyota Fortuner | 9 169 |
| 6. | Mercedes-Benz C-Class | 7 850 |
| 7. | BMW 3 Series | 6 855 |
| 8. | Ford EcoSport | 6 032 |
| 9. | Nissan NP200 | 4 502 |
| 10. | Kia Picanto | 4 460 |
How WeBuyCars’ R10 billion JSE listing stacks up against competitors.
WeBuyCars’ planned listing on the JSE at a value of between R8.7 billion and R10 billion appears to give the company a relatively expensive valuation compared to similar companies listed on the JSE.
WeBuyCars revealed in its pre-listing statement that it aims to list at a market capitalization of between R8.7 billion and R10 billion.
WeBuyCars will have 413.7 million shares when listed, resulting in the listed share price being between R21.03 and R24.17 per share.
This stacks up favorably compared to its soon-to-be peers on the JSE, Motus and Combined Motor Holdings (CMH).
It must be noted that these companies are not directly comparable to WeBuyCars as they also sell new cars and do not just purchase and sell used cars. However, they are the listed companies with the most similar business to WeBuyCars.
This valuation may be explained by the company’s impressive growth track record.
Since 2019, WeBuyCars has seen an average growth in its profits of 25% per annum and an average growth in sales of 38% per annum.
It has also begun trading over 14,000 cars a month and expects to grow further once it is listed.
The table below compares the valuation of Motus, CMH, and WeBuyCars.
| Motus | CMH | WeBuyCars | |
| Price-to-earnings ratio | 5.32 | 4.87 | 11.18 to 12.86 |
| Price-to-book ratio | 0.91 | 1.6 | 4.7 to 5.4 |
| Price-to-sales ratio | 0.14 | 0.16 | 0.43 to 0.5 |
| Market capitalisation | R15.98 billion | R1.96 billion | R8.7 billion to R10 billion |
The company reported a profit of R778 million in its latest annual results. At these profits and anticipated market cap, WeBuyCars would be listed at a P/E ratio of between 11.18 and 12.86 and a price-to-sales ratio of between 0.43 and 0.5.
DID YOU KNOW
- South Africa has abundant supplies of raw materials vital for the manufacture of lithium-ion batteries, including increasing supplies of nickel and the world’s largest reserves of manganese. It also holds the world’s largest platinum reserves, a metal used in fuel-cell engines that run on hydrogen. — (c) 2024 Bloomberg LP
- Faulty oxygen sensors account for many check engine light related issues. Not the check engine light!
- The average car has more than 100 miles of code in the vehicle’s internal computer. How does it fit in there?
- Fuel gauges weren’t added to cars until 1922.
- Today, there are 1.4 billion cars—that’s about one car for every seven people!
- The Ferrari manufacturers only produce 14 cars a day. That is a very large difference from Toyota's 13,000 vehicles a day!
- Did you know Winston Churchill was hit by a car and nearly killed during a New York visit?
- Did you know the word racecar can be spelled the same way backwards
- Did you know the most fatal car accidents occur on Saturdays
Thought of the week :
Every day may not be good… but there’s something good in every day.