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ZEDER INVESTMENTS LIMITED

ZED JSE Listed

Investment Analysis: Zeder Investments Limited (JSE: ZED)

Date: 9 January 2026 Share Price: ~R1.29 (129c) Analyst Role: Senior Equity Analyst, JSE

Step 1: Data Gathering & Source Verification

I have reviewed the most recent financial disclosures and relevant SENS announcements, noting that the company is in an advanced stage of monetizing its portfolio.

  • Interim Results: Reviewed the Unaudited Condensed Consolidated Interim Results for the six months ended 31 August 2025 (Released 21 October 2025).
  • Annual Financial Statements: Reviewed the Reviewed Condensed Consolidated Financial Results for the year ended 28 February 2025 (Released 24 April 2025).
  • SENS Activity (L12M): Key announcements include the disposal of Zaad's African operations (Zimbabwe, Zambia, Mozambique) to ETG Inputs (March/October 2025) and the receipt of special dividends from Pome Investments.

Data Sources:

  • Interim Results (Aug 2025): https://www.zeder.co.za/Zeder%20SFA%2031%20Aug%202025.pdf
  • SOTP Update (Aug 2025): https://www.zeder.co.za/investor-centre/sum-parts/

Step 2: Metric Extraction

| Metric | Value | Notes | | --- | --- | --- | | Market Cap | ~R1.98 Billion | Small-cap investment holding company. | | Dividend Yield (L12M) | ~24.0% (Trailing Special) | Cautionary Note: Zeder does not pay ordinary dividends. It pays Special Dividends from asset disposals. In the last 12 months, it paid ~31.0c (Nov 2024). However, no dividend was declared in the recent Aug 2025 interims. | | Liquidity Check | Moderate/Thin | Average daily volume is sporadic. While liquid enough for retail investors, large institutional exits can move the price significantly. | | P/E Ratio | N/A (Loss Making) | Reported a loss per share of 10.0 cents (Interim Aug 2025) due to downward fair value adjustments of underlying assets. P/E is irrelevant; Price-to-NAV is the only metric that matters. | | Sum-of-the-Parts (SOTP) / NAV | 168 cents | As at 31 August 2025. The stock trades at a ~23% discount to NAV (Price 129c vs NAV 168c). |

Step 3: Operational & Strategic Analysis

Business Overview Zeder is an agribusiness investment holding company that is effectively in a "wind-down" or "value unlock" phase. It has sold off most of its major assets (Pioneer Foods, Kaap Agri/KAL, The Logistics Group, Capespan).

  • Remaining Core Asset: Zaad Holdings (~R2.0bn valuation). Zaad owns, develops, and distributes agricultural seeds (maize, wheat, sunflower) across Africa, Europe, and the Middle East.
  • Other Assets: Pome Investments (Residual fruit farming assets) and Cash.

Performance Trend

  • Strategy: Liquidation & Distribution. The strategy is clear: sell assets and return cash to shareholders.
  • Disposals: Zeder is actively selling "bits and pieces" of Zaad. In 2025, it successfully disposed of Zaad’s operations in Zimbabwe, Mozambique, and Zambia to ETG Inputs for R135m, and its Angolan chemical business for R45m.
  • Valuation Pressure: The SOTP value per share dropped from R1.77 (Feb 2025) to R1.68 (Aug 2025). This was driven by a downward valuation of Zaad, reflecting difficult trading conditions in turkey and parts of Africa, and the payment of special dividends.

Sector Context

  • El Niño/La Niña: The seed business is highly sensitive to weather patterns. Volatile weather in Southern Africa has impacted planting volumes, weighing on Zaad’s performance.
  • Geopolitics: Zaad has exposure to the Middle East and Eastern Europe, where conflict risk has necessitated higher risk premiums (lower valuations).

Step 4: The Verdict

Bull Case (Why Buy): The Arbitrage Play. You are buying R1.68 of assets for R1.29. Management has a proven track record of selling assets at or near their SOTP value (e.g., The Logistics Group, Capespan) and returning the full proceeds to shareholders. If they succeed in selling the remainder of Zaad to a strategic buyer (likely a global seed major) at book value, you unlock a ~30% return instantly.

Bear Case (Why Sell): The "Melting Ice Cube." The easy assets have been sold. What remains (Zaad) is complex, geographically risky (Turkey/Africa), and facing weather headwinds. The persistent writedowns in NAV (from R2.15 to R1.68 over 12 months) suggest the "fair value" might be lower than reported. If Zeder cannot find a buyer for the whole of Zaad, they may be forced to hold it for years, trapping your capital with no yield (as ordinary dividends are not paid).

Fair Value Estimate: R1.50 - R1.60 Applying a small 5-10% liquidity discount to the reported SOTP of R1.68.

Final Rating: SPECULATIVE BUY Strictly for patient value investors comfortable with "special situations." The discount offers a margin of safety, but the catalyst (sale of Zaad) is uncertain in timing.

AI Generated Analysis Last Updated: 2026-01-14