StockTalk Retrospective. AECI ltd: maybe the oldest listed company on JSE

AECI Ltd (JSE: AFE) is a South African industrial group with a leading position in the international market for mining chemicals, explosives, and specialty chemicals. The company's history dates back over 100 years. Clearly, further proof of the company's viability is unnecessary.

Amid the Witwatersrand gold rush, Transvaal President Paul Kruger personally opened the "Zuid Afrikaansche Fabrieken voor Ontplofbare Stoffen Beperkt" (South African Dynamite Factory) on Modderfontein Farm near Johannesburg on October 22, 1896.

After the First World War, this plant merged with Kynoch's Umbogintwini factory - explosives production was concentrated in Modderfontein, and the Umbogintwini plant switched to fertilizers.

The legal entity, of which today's AECI Limited is the direct successor, was registered precisely in 1924 - as a result of the merger of the South African interests of Nobel Industries (UK) and the manufacturing division of De Beers Consolidated Diamond Mines, under the name African Explosives and Industries Limited, declared the largest commercial explosives factory in the world. Sir Ernest Oppenheimer was appointed chairman of the board.

South Africa's participation in World War II forced the company to develop the production of civilian chemicals - aluminum sulfate, zinc chloride, sodium thiosulfate, silver nitrate, etc., which were in short supply in the country. Diversification continued after the war - the company began producing fertilizers, paints, veterinary drugs and insecticides, and in 1944 changed its name to African Explosives and Chemical Industries.

The company's listing took place in 1966, meaning its shares have been available for trading for exactly 60 years. Its all-time high of 14,110 ZAc (R141.10) was recorded on April 10, 2015, and its low of 554 ZAc ​​(R21.14) was November 1992.

AECI stocks performance on JSE for the last 26 years

The company spent the period from 2000 to 2020 with a rather diverse portfolio of assets (Schirm in Germany and the US, Much Asphalt, Southern Canned Products, the AECI Water water business, etc.), and in November 2023, it announced a reverse strategy—focusing on Mining and Chemicals with the sale of non-core businesses.

The period 2023-2025 can be considered one of the most challenging. The company was showing losses due to problematic assets in Europe, which resulted in a change in management and a course for restructuring (disposal of non-core assets)

AECI Ltd Today and in the Future

Today, AECI Ltd is quite a sought-after sector amid militarization in Europe and other continents, so investing in such a company makes sense and provides excellent risk diversification against a worsening global geopolitical situation.

AECI shares (like Sasol) trade at a significant discount to P/E (7.7x) and EV/EBITDA (4.8x). This is due to South African country risks (problems in Eskom's electricity sector and Transnet's logistics).

According to discounted cash flow (DCF) models that take into account long-term demand for explosives for copper, lithium, and precious metals mining, AECI's fair intrinsic value (FV) is estimated at around R180.00–R210.00. However, there is a market discount due to South African country risks.

The company regularly pays dividends to its investors, although its dividend yield is inferior to industry competitors, currently only around 2% per year. However, there are growth prospects. Furthermore, as non-core asset sales are announced, this could increase demand for shares, leading to an increase in their price, especially if this is reflected in the financial statements.

AECI (JSE: AFE) annual divident payments for the last 5 years

In 2026, AECI Ltd. is in a recovery phase, and after a management change and a period of near-zero financial statements, it should continue its long-standing growth story, particularly amid growing demand for explosives in Europe and the United States.

AECI stocks value: Technical Analysis

The stock chart is currently trending upward. After a challenging 2025, the company is rising in price. Shares have gained 39.19%, and technical analysis indicators are showing a buy signal. The stock is near its highs, and there's every chance of testing them.

AECI ltd stock chard D1, July 2026

The RSI (14) is at ~60, indicating a moderate buying bias without entering the critical overbought zone. The MACD is positive (bullish).

Further growth will require strong signals, such as sales of non-performing assets, dividend growth, strong financial reports, and an optimal macroeconomic environment. Nothing too complicated for AECI Ltd. At the same time, to reach the highs, shares will need to add 14% to their price. This is the level investors can expect when buying shares today, but it's not the limit – sometimes historical highs are renewed.

SWOT-picture of investments in AECI ltd in 2026

AECI went through a genuinely rough 2023–2024 - shrinking revenue, an outright EPS loss, and net debt/gearing at multi-year highs before a sharp financial repair in FY2025: record Mining EBITDA, ~R2bn+ raised via non-core disposals, and gearing cut from ~31% to ~5%. The stock (~R121, 52-week range R85–128) has already recovered a large part of that move, and now sits at a fork: a high reported P/E (~37x) masks a much cheaper HEPS-based multiple (~11x), and a brand-new CEO (Alan Dickson, from July 2026) is about to be judged on whether FY2025's turnaround is structural or a one-off cyclical bounce plus balance-sheet cleanup.

AECI SWOT of investments in 2026

Bull Case

New CEO, Dickson executes the cost and portfolio-simplification agenda cleanly, HEPS becomes the market's trusted earnings measure as impairment noise fades, and the multiple re-rates toward (or past) the 2015 all-time high of ~R141. Divident yield increases from 2% - to 5% - as competitors provide. A cyclical recovery in global mining capex, especially in AECI's growing Asia-Pacific book, lifts volumes across Mining and Chemicals simultaneously - a genuine earnings upgrade rather than just cost-cutting.

Bear Case

Leadership transition proves disruptive (a third strategy pivot in three years), or another Schirm-style impairment surfaces elsewhere in the portfolio, keeping reported earnings persistently below HEPS. A renewed commodity/mining-capex downturn repeats, and the ZAR or SA operational issues (logistics, power) weigh on the still-large domestic base. With the stock already up meaningfully off its 2025 lows, much of the good news (deleveraging, Mining margin recovery) may already be in the price, leaving limited upside without a fresh earnings catalyst — and real downside if the turnaround stalls.

Summary

AECI Ltd represents a compelling turnaround story nowadays. The aggressive balance sheet repair and structural pivot toward high-margin mining and water chemistry positions the business for sustainable long-term value creation. While short-term upside to consensus analyst targets is moderate following recent price gains, long-term investors stand to benefit from margin expansion and potential multiple re-ratings as non-core drag is eliminated.

Even during challenging periods, the company's price hasn't dropped more than 20%, and during its best periods but it has grown by more than 35% over six months. In the first half of 2026, investing in AECI Ltd could have been considered one of the best deals on the market. Today, such an asset in a portfolio can, in any case, become a reliable foundation, combining growth potential with moderate but regular dividend payments over the long term. Such assets are not purchased for a day or a month. They are assets that are purchased for many years and passed down through inheritance.