Shandong Weifang Rainbow Chemical Co., Ltd. (Rainbow, 301035) (301035)

Individual Stock Analysis Report　|　Industry: Pesticide Technicals and Formulations, Global Crop Protection Product Services　|　Report Date: September 14, 2026　|　Market data as of the September 11, 2026 close; complete technical indicators are primarily as of September 8, 2026, and shareholder-structure data as of June 30, 2026. Different data sources use different methodologies for the closing price, low price, and 52-week highs and lows.

This report was automatically compiled by AI based on publicly available information. It is for reference only and does not constitute investment advice.

1. Executive Summary

Rainbow reported operating revenue of RMB 7.442 billion in the first half of 2026, up 13.95% year on year, but net profit attributable to shareholders of the listed company fell 9.67% year on year to RMB 502 million. Net cash flow from operating activities was only RMB 125 million, down 86.00% year on year. Gross margin rose to approximately 24.29% during the period, while exchange-rate fluctuations reduced profit by approximately RMB 234 million. The company is currently characterized by improving revenue and product mix but pressure on profit and cash flow, with foreign-exchange movements a key variable affecting earnings realization.

The company has a pronounced global operating profile. In 2025, overseas revenue was RMB 14.568 billion, accounting for 99.18% of operating revenue, and it had more than 130 subsidiaries in over 100 countries. Model C revenue increased 27.47% year on year in 2025, rising to 43.44% of total revenue, with a gross margin of 31.68%, versus 15.98% for Model A + Model B. In the first half of 2026, revenue and gross margins for herbicides, insecticides, and fungicides all improved, indicating that product mix, formulations, and localized service capabilities are supporting profit recovery.

In 2025, the company generated operating revenue of RMB 14.688 billion, up 10.47% year on year, and net profit attributable to shareholders of RMB 1.045 billion, up 132.07% year on year. Gross margin rose from 19.79% in 2024 to 22.80%. However, materials accounted for 92.09% of operating costs, and the active ingredients required for formulations, aside from a portion produced in-house, are mainly sourced domestically. Profitability therefore remains sensitive to prices of pesticide technicals and chemical raw materials, industry supply and demand, and excess capacity.

As of September 11, 2026, the company’s share price was approximately RMB 55.12, with a trailing or dynamic P/E ratio of approximately 20–21x. Technical indicators suggest that the medium- and short-term trend has not fully weakened, although the stock declined for three consecutive sessions from September 9 to 11 and fund flows were cautious. The company recently completed an interim cash dividend, while its controlling shareholder and actual controller completed an increase of approximately RMB 9.9782 million. Following the partial release of pledges by the controlling shareholder, the cumulative pledge ratio declined to approximately 24.88%, easing shareholder-level risks in the near term.

2. Company Overview

2.1 Basic Information

2.2 Main Businesses and Product Portfolio

• Herbicides: Revenue of RMB 10.013 billion in 2025, accounting for 68.17% of operating revenue, with a gross margin of 20.33%; products include glyphosate, 2,4-D, atrazine, clethodim, flumioxazin, phenoxy carboxylic acid herbicides, and others.
• Insecticides: Revenue of RMB 2.855 billion in 2025, accounting for 19.43% of operating revenue, with a gross margin of 28.57%.
• Fungicides: Revenue of RMB 1.575 billion in 2025, accounting for 10.72% of operating revenue, with a gross margin of 26.32%.
• Other products and businesses: Revenue of approximately RMB 246 million in 2025, accounting for approximately 1.68%.
• Technicals and formulations: The company covers both pesticide technicals and formulations and clearly indicated in its 2025 annual report that formulations are the primary focus. Some technicals are produced in-house, while the remainder are mainly purchased domestically and then used in formulation production or sold directly.
• Model A + Model B: Revenue of RMB 8.307 billion in 2025, accounting for 56.56%, with a gross margin of 15.98%; this business focuses more on technical supply, overseas registration, product portfolios, and channel services.
• Model C: Revenue of RMB 6.381 billion in 2025, accounting for 43.44%, with a gross margin of 31.68%; revenue increased 27.47% year on year, and its share rose from 37.65% in 2024 to 43.44%, primarily involving product registration, branding, channels, promotion, and local-market services.
• Overseas business: The company focuses on exports and global operations. Its competitive strengths derive from global pesticide registrations and registration experience, overseas local sales subsidiaries and channel networks, and an integrated capability covering technicals, formulations, brands, and end-market promotion.

2.3 Position in the Upstream and Downstream Value Chain and Cost-Profit Structure

Rainbow occupies a position in the pesticide value chain spanning “midstream technical manufacturing + downstream global formulation, registration, branding, and channel services.” Traditional Model A/B businesses are more focused on midstream manufacturing and supplier activities, while Model C extends further downstream into brands and end markets.

• Major purchases include pesticide technicals and intermediates, basic chemical raw materials, chlorine, phosphorus, solvents, acids and alkalis, as well as pesticide adjuvants, packaging materials, energy, environmental-treatment services, and transportation services.
• In 2025, materials costs were RMB 10.442 billion, accounting for 92.09% of operating costs; direct labor accounted for 2.29%, manufacturing overhead for 4.28%, and transportation expenses for 1.34%. The high proportion of materials costs makes profit sensitive to prices of technicals and chemical raw materials.
• The technicals required for formulation production, aside from a portion produced in-house, are mainly sourced domestically. Domestic technical prices are affected by market supply and demand, upstream chemical raw-material prices, and environmental-protection and energy-consumption policies.
• The company does not fully control upstream pricing. Large-volume, commoditized pesticide technicals are closer to price-taker products; in-house technicals, differentiated products, and varieties with technological or process advantages can improve bargaining power through cost control and stable supply.
• In 2025, actual production was 341,100 tonnes, sales were 431,400 tonnes, and ending inventory was 62,600 tonnes. Sales exceeded current-period production, indicating that, in addition to in-house output, the company purchases substantial quantities of technicals or formulations for global sales and channel operations.
• At the end of 2025, designed formulation capacity was 319,670 tonnes, with capacity utilization of 86.02%; designed technical capacity was 80,900 tonnes, with capacity utilization of 75.12%; formulation capacity under construction was 16,500 tonnes, and technical capacity under construction was 8,000 tonnes.
• Major downstream customers include overseas agricultural-input distributors and importers, local pesticide manufacturers and brand partners, agricultural cooperatives and growers, and certain end-market crop-protection customers.
• Sales to the five largest customers in 2025 totaled RMB 1.610 billion, accounting for 10.96% of annual sales; the single largest customer accounted for 4.09%. None of the five largest customers was a related party. The annual report anonymized the five customers as “Customer One” through “Customer Five,” making it impossible to determine their specific names or customer types.
• The above customer-concentration data are for 2025. The research notes do not provide data for other years for cross-comparison; the latest annual report shall prevail.
• The company’s downstream customers are not primarily a small number of large original equipment manufacturers, but channel partners and end markets across multiple countries. Bargaining power depends mainly on product differentiation, local registrations, stable supply, complete crop solutions, and local brands and channel networks.
• With overseas revenue accounting for more than 99%, operations are also affected by local channel inventories, agricultural-product prices, distributors’ financial conditions, overseas pesticide-registration policies, trade policies, regional credit risks, foreign-exchange movements, and local agricultural conditions.
• Some previously planned projects were postponed because of excess capacity in the pesticide industry, falling product prices, and changing market demand. As disclosed in the 2025 annual report, the company decided to terminate the 9,000-tonne-per-year captan project, the 30,000-tonne-per-year glyphosate soluble-granule project under Phase I of the 38,800-tonne-per-year herbicide project, and the 25,000-tonne-per-year continuous glyphosate technical-upgrade project, and to redirect the remaining raised funds to global pesticide-registration projects.
• As of December 31, 2025, accounts receivable were RMB 5.196 billion, equivalent to approximately 35.37% of 2025 operating revenue and 4.97x 2025 net profit attributable to shareholders of RMB 1.045 billion; accounts payable were RMB 1.378 billion, notes payable were RMB 3.968 billion, and the combined amount was approximately RMB 5.346 billion, while prepayments were RMB 101 million. Accounts receivable represent a significant working-capital commitment related to foreign-trade business and overseas channels. Accounts payable and notes payable exceeded prepayments, indicating a certain ability to use supplier credit and bill settlement for working-capital financing. However, the accounts-receivable-to-revenue ratio is a static calculation based on the period-end balance and full-year revenue; it does not equal the average annual ratio or accounts-receivable turnover days. The research notes do not provide accounts-receivable turnover days, supplier payment periods, or annual average balances, so bargaining power cannot be fully assessed from the period-end balance alone.
• The five largest customers accounted for 10.96% in aggregate in 2025, while the single largest customer accounted for 4.09%. Low customer concentration helps diversify single-customer risk, but overseas revenue accounted for 99.18%, leaving the company highly dependent on overseas channels, registration regulations, foreign exchange, and regional credit conditions. The five-largest-customer data are sourced from the relevant disclosure in the 2025 annual report cited in the research notes. Customer names are anonymized, and no data for other years were provided for cross-verification; the latest annual report shall prevail.

The company is positioned between midstream pesticide manufacturing and downstream global brands and services. Large-volume, commoditized technicals are midstream products vulnerable to technical prices and excess capacity, while Model C, overseas registrations, brands, channels, and end-market services are closer to higher-value downstream activities. Future profit improvement will depend primarily on a higher proportion of differentiated technicals and advanced-process products, increased in-house technical production and cost competitiveness, continued Model C expansion, a higher share of insecticides, fungicides, and premium formulations, and accumulated overseas registrations and local channels—not simply on expanding large-volume technical capacity.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

As of June 30, 2026, the latest periodic report was the “2026 Interim Report,” announced on August 22, 2026. Net profit excluding non-recurring items in the first half of 2026 was RMB 493.71 million, down 10.07% year on year; basic EPS was RMB 1.38, down 10.39% year on year. Net cash flow generated from operating activities was RMB 125.09 million, down 86.00% year on year, while the weighted average return on equity was 6.53%, down 1.47 percentage points from the same period last year. At period end, total assets were RMB 18.86945 billion and net assets attributable to shareholders of the listed company were RMB 7.67864 billion. Gross margin in the first half of 2026 was approximately 24.29%, an increase of approximately 2.87 percentage points year on year.

The company displayed a pattern of revenue growth but profit pressure in the first half of 2026, with exchange losses significantly weighing on profit. Second-quarter revenue and net profit attributable to shareholders improved substantially quarter on quarter, while product-mix optimization and a higher proportion of Model C supported gross-margin improvement. By major product, herbicide revenue was approximately RMB 5.294 billion, up 12.53% year on year, with a gross margin of 21.30%; insecticide revenue was approximately RMB 1.204 billion, up 13.36%, with a gross margin of 31.40%; and fungicide revenue was approximately RMB 800 million, up 18.62%, with a gross margin of 29.65%. The explanations for the above gross-margin improvements are securities-broker analysis rather than audited performance conclusions issued by the company.

3.2 Earnings Forecasts

As of September 11, 2026, the East Money F10 aggregation showed that 12 institutions had issued forecasts for the company’s 2026 results during the preceding six months. Market consensus expectations for 2027–2028 operating revenue were not fully displayed on the public aggregation page. Where Guohai Securities forecasts are used, they should be viewed as a single-institution estimate. Institutional earnings forecasts are not formal earnings commitments by the company, and institutions use different assumptions regarding exchange rates, overseas markets, product prices, and margins.

3.3 Valuation and Institutional Ratings

As of September 11, 2026, the closing price was approximately RMB 55.12. Total shares outstanding had increased to approximately 364.51 million, implying a static market capitalization of approximately RMB 20.09 billion based on the closing price. As of September 10, 2026, Lixinger showed a P/E-TTM of approximately 20.43x, P/B of approximately 2.71x, market capitalization of approximately RMB 20.237 billion, and a historical P/E-TTM percentile of approximately 30.72%; East Money showed a static P/E ratio of approximately 19.38x. Based on the average institutional earnings forecasts, estimated forward P/E ratios for 2026–2028 are approximately 15.7x, 12.5x, and 10.3x, respectively. Using Everbright Securities’ forecast, 2026 EPS is approximately RMB 3.19, implying a P/E of approximately 17.3x; using Guohai Securities’ forecast, 2026 EPS is approximately RMB 3.92, implying a P/E of approximately 14.1x. Institutional statistics indicate a 2026 target-price range of RMB 70.00 to RMB 105.82, with an average target price of approximately RMB 94.21. However, this average includes research results issued on different dates and based on different assumptions by different institutions and should not be interpreted simply as a unified target price. With a P/E-TTM of approximately 20x and P/B of approximately 2.7x, the company’s valuation is no longer that of an undervalued traditional chemical stock. If institutional earnings forecasts are achieved, forward valuation may decline as profit grows. Valuation data are sourced from third-party market-data and valuation platforms, mainly as of September 10–11, 2026; different platforms may have different update times and calculation methodologies. Institutional earnings forecasts also face uncertainties from foreign-exchange fluctuations, overseas expansion, product prices, and gross-margin changes.

4. Recent News and Announcements

4.1 Partial Release of Pledges by the Controlling Shareholder, with a Significant Decline in the Pledge Ratio

On September 10, 2026, the company disclosed the “Announcement on the Partial Release of Pledges by the Controlling Shareholder.” The controlling shareholder, Shandong Runyuan Investment Co., Ltd., released pledges over a total of 23.426 million shares on September 9, 2026, including 7.631 million shares pledged on September 12, 2024, and 15.795 million shares pledged on January 7, 2025. The shares released represented 15.68% of Runyuan Investment’s holdings and 6.43% of the company’s total shares. After the release, Runyuan Investment held 149.3846 million shares. Its cumulative pledged shares declined from 60.59105 million to 37.16505 million, with the pledge ratio falling from approximately 40.56% to 24.88% and the pledged shares’ proportion of total company shares declining from 16.62% to 10.20%. The combined pledge ratio of the controlling shareholder and parties acting in concert declined to 15.06%. The transaction did not change control by the controlling shareholder or actual controller, did not represent a disposal by the controlling shareholder, and the announcement did not disclose any transfer of share ownership. It should ease near-term market concerns over equity-pledge and potential forced-liquidation risks. Source: https://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?id=12593871&stockid=301035

4.2 New Pledge by the Controlling Shareholder at the End of August, Followed by a Partial Release

On August 28, 2026, the company disclosed the “Announcement on the Pledge of Partial Shares by the Controlling Shareholder.” On August 27, Shandong Runyuan Investment Co., Ltd. pledged 17.030 million shares to Huaneng Guizhou Trust Co., Ltd., with a pledge period from August 27, 2026 to September 1, 2027. The disclosed purpose was to supplement working capital. Of these shares, 9.460 million represented 2.60% of the company’s total shares and 6.33% of Runyuan Investment’s holdings; 7.570 million represented 2.08% of total shares and 5.07% of Runyuan Investment’s holdings. In aggregate, they represented 4.67% of total shares and 11.40% of Runyuan Investment’s holdings. After completion, Runyuan Investment’s cumulative pledged shares reached 60.59105 million, representing 40.56% of its holdings and 16.62% of the company’s total shares. As of September 10, 2026, following the release of 23.426 million shares, the pledged balance had declined to 37.16505 million shares. Recent shareholder activity therefore comprised “new pledges at the end of August and a relatively large release in early September” and should not simply be interpreted as continued leverage increases by the controlling shareholder. Source: https://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?id=12568629&stockid=301035&utm_source=openai

4.3 Share-Increase Plan by the Actual Controller and Chairman Completed

On July 2, 2026, the company disclosed the “Announcement on Completion of the Share-Increase Plan by the Actual Controller and Chairman and the Results of the Increase.” From June 17 to June 30, actual controller and chairman Wang Wencai purchased a cumulative 208,100 company shares through centralized bidding, representing approximately 0.06% of total shares, for RMB 9.9782 million excluding transaction fees. The previous planned purchase amount was RMB 5 million to RMB 10 million, and the increase reached approximately the upper limit and was completed. After the purchase, Wang Wencai directly held 793,640 shares; his combined stake with Shandong Runyuan Investment Co., Ltd., KONKIA INC, and Shandong Runnong Investment Co., Ltd. rose from 67.64% to 67.70%. The increase did not change the controlling shareholder or actual controller and did not affect the company’s listing status. The transaction demonstrates management’s support for the company’s long-term value, although the increase was small relative to total shares and primarily represents a confidence and expectations-stabilization signal. Source: https://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?id=12428631&stockid=301035&utm_source=openai

4.4 2026 Interim Report: Revenue Growth but Declines in Profit and Operating Cash Flow

On August 22, 2026, the company disclosed its 2026 interim report and summary. In the first half of 2026, operating revenue was RMB 7.442 billion, up 13.95% year on year; net profit attributable to shareholders of the listed company was RMB 502 million, down 9.67%; net profit excluding non-recurring items was RMB 494 million, down 10.07%; and net cash flow from operating activities was RMB 125 million, down 86.00%. The company said revenue growth was mainly driven by global market expansion, growth in North American and EU markets, and a higher proportion of Model C business. Profit was affected by RMB appreciation and foreign-exchange fluctuations. In the first half of 2026, exchange-rate fluctuations reduced profit by approximately RMB 234 million, compared with an increase of approximately RMB 222 million in the same period of 2025. Overall, the interim report showed improved revenue and gross margin, while net profit attributable to shareholders was weighed down by foreign exchange. Sources: https://disc.static.szse.cn/download/disc/disk03/finalpage/2026-08-22/d7c87d7c-f52e-4fc4-802c-d7e6897f6f7a.PDF; https://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?id=12515778&stockid=301035

4.5 Implementation of the 2026 Interim Cash Dividend

The company’s board approved an interim profit-distribution plan under which a cash dividend of RMB 5.50 per 10 shares would be paid based on the share count excluding shares held in the dedicated repurchase account, with no bonus shares or capitalization issue. On August 27, 2026, the company disclosed the implementation announcement. Based on a dividend base of 362,848,600 shares, total cash dividends were expected to be RMB 199.57 million, representing 39.77% of first-half 2026 net profit attributable to shareholders. The record date was September 2, 2026, and the ex-dividend and payment date was September 3, 2026. The interim dividend is positive for shareholder returns but cannot eliminate foreign-exchange, accounts-receivable, inventory, or overseas-market credit risks. Source: https://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?id=12552229&stockid=301035&utm_source=openai

4.6 Investor-Relations Meeting Disclosed Industry Export Data and Operating Outlook

On August 24, 2026, the company hosted a meeting with multiple institutional investors. The company stated that from January to June 2026, China’s exports of crop-protection products under Customs Code 3808 increased 15.66% in volume and 18.75% in value year on year. The average monthly export price rose from US$2.86/kg in January 2026 to US$3.25/kg in June. The company also stated that adjustments to export-tax rebates and changes in pesticide-registration policies would support formulation exports and industry upgrading. These statements represent the company’s views during investor-relations activities and do not constitute a performance commitment by regulators. The company expects core indicators including full-year 2026 net profit attributable to shareholders, gross margin, EBITDA, and operating revenue to improve steadily. It will continue to advance Model C, expand in the EU and North American markets, develop its insecticide and fungicide businesses, and pursue global registration and commercialization of important newer active ingredients. These statements are operating outlook and management judgments, not formal earnings guidance or profit commitments. Source: https://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?id=12523640&stockid=301035&utm_source=openai

4.7 No New Repurchase Plan or Repurchase-Implementation Announcement Recently Identified

As of September 14, 2026, targeted searches covering August–September 2026 and keywords related to earnings guidance, repurchases, shareholder activity, mergers and acquisitions, and regulatory matters found no newly disclosed share-repurchase plan or new repurchase-implementation progress announcement by Rainbow. The company’s dedicated repurchase account previously held 1,656,666 shares, which did not participate in profit distribution in the interim dividend. This conclusion only indicates that no new repurchase announcement was identified within the scope of this search; it does not rule out announcements that had not yet been indexed by search engines. Source: https://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?id=12552229&stockid=301035&utm_source=openai

4.8 No New Disposal Announcement by the Controlling Shareholder or Actual Controller Recently Identified

As of September 14, 2026, no new disposal plan or disposal-implementation announcement by the controlling shareholder or actual controller for August–September 2026 had been identified. Recent shareholder-level changes mainly comprised the actual controller’s share purchase and the controlling shareholder’s pledge and release of pledges.

4.9 No Major Merger or Restructuring Announcement Recently Identified

As of September 14, 2026, no announcement had been identified regarding a major asset restructuring, share issuance for asset purchases, or major acquisition disclosed by the company during August–September 2026. The interim report disclosed that the company continued to advance global registration, overseas-market expansion, and technical-synthesis project construction, but these activities relate to operations and capacity planning and do not constitute a signed or completed major M&A transaction. Source: https://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?id=12515778&stockid=301035

4.10 No Major Regulatory Penalty or Inquiry Announcement Recently Identified

As of September 14, 2026, no announcement had been identified indicating that the company had received a regulatory penalty, been subject to an investigation, received a stock-exchange inquiry, or faced a major regulatory measure during August–September 2026. The company’s August 24 investor-relations record mentioned adjustments to export-tax rebates and changes in pesticide-registration policies. The direction of the impact reflects the company’s judgment, and the formal policy texts and their actual effects on formulation exports, overseas-registration costs, and product access require continued monitoring. Source: https://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?id=12523640&stockid=301035

4.11 Overall Assessment of Recent Announcements

As of September 14, 2026, the main themes in Rainbow’s recent announcements were as follows: first-half 2026 revenue continued to grow, but net profit attributable to shareholders declined year on year, with foreign-exchange fluctuations an important source of pressure; the actual controller completed a share purchase of approximately RMB 9.9782 million, sending a somewhat positive signal; the controlling shareholder pledged 17.03 million shares in August and released pledges over 23.426 million shares in September, leaving the latest pledge ratio significantly below the late-August level; and the company implemented an interim cash dividend of RMB 5.50 per 10 shares, with total dividends expected to be approximately RMB 199.6 million. No recent major M&A transaction, formal new repurchase plan, new disposal plan by the controlling shareholder, or major regulatory penalty has been identified. Going forward, investors should monitor RMB exchange-rate movements, the quality of overseas accounts receivable and inventory, changes in the controlling shareholder’s pledged balance, growth in North American and EU businesses, and whether full-year results can deliver on management’s outlook for “steady improvement in core operating indicators.”

5. Share-Price Performance and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

As of September 11, 2026, Rainbow closed at approximately RMB 55.12–55.13, down from RMB 57.70 on September 8. Technical indicators as of September 8 still showed the share price above MA5, MA10, and MA20, while MACD remained above the zero axis and DIF was above DEA, indicating that the trend had not fully turned bearish. However, RSI6 had reached 66.0, and the consecutive decline from September 9 to 11 reflected cooling short-term momentum. The resistance zone above is approximately RMB 57.7–59.2, while the first support zone below is approximately RMB 54.1–55.0 and the stronger support zone is approximately RMB 50.3–52.0. Recent turnover values were mostly approximately RMB 50 million to RMB 130 million and the turnover rate was generally low. Fund flows on September 11 and the recent pullback indicated cautious short-term sentiment.

5.3 Short-Term Outlook (Next Week; Scenario Analysis for Reference Only)

⚠️ Risk warning: The following is a subjective scenario analysis based on the September 11, 2026 closing data, recent historical prices, and technical indicators as of September 8, 2026. It does not constitute investment advice or a definitive price forecast.

① Key Technical Levels

② Scenarios for the Coming Week (Subjective Weights, Not Statistical Probabilities)

• Range-bound consolidation (relatively higher weight; approximately 60%. This is a subjective heuristic judgment based on the current technical structure, trading volume, and fund flows, not a statistical probability.): Reference range of approximately RMB 54.5–58.0. Trigger conditions are that the stock holds the RMB 54.1–55.0 support zone but cannot decisively break the RMB 57.7–59.2 resistance zone, while turnover remains within recent norms without consecutive volume expansion.
• Weaker decline (medium weight; a subjective scenario weight, not a statistical probability or return forecast.): Reference range of approximately RMB 50.3–54.5. Trigger conditions are a decisive closing break below RMB 54, clearly higher single-day turnover than recent norms, continued consecutive net outflows from main funds, or broad weakness in the basic-chemical and pesticide sectors. If RMB 52 also fails to hold, the RMB 50.3–51.0 area may serve as a downside reference.
• Stronger rebound (relatively low weight; a subjective scenario weight, not a statistical probability or return forecast.): Reference range of approximately RMB 58.0–60.5. Trigger conditions are a return above RMB 58 and a decisive break above the RMB 59.2 Bollinger upper band or recent highs, accompanied by consecutive increases in turnover to approximately RMB 150 million or more and a shift in main-fund flows from net outflows to consecutive net inflows.

③ Fund-Flow and Liquidity Background

Based on historical trading data from August 17 to September 11, 2026, recent daily volume ranged from approximately 728,000 to 5.09 million shares, turnover value ranged from approximately RMB 37.24 million to RMB 286 million, and turnover rate ranged from approximately 0.20% to 1.40%. Turnover was mostly approximately RMB 50 million to RMB 130 million, and the turnover rate was mostly approximately 0.2% to 0.8%. According to the interim report as of June 30, 2026, the number of ordinary shareholders was 7,557, while the ten largest shareholders collectively held approximately 79.75% of total shares. Shandong Runyuan Investment, KONKIA INC, Shandong Runnong Investment, and other entities controlled by the actual controller collectively held approximately 67%; the ten largest shareholders also included several public funds and Hong Kong Securities Clearing Company Limited. This shareholder-structure data lagged the September 11 share-price data by approximately two and a half months and cannot fully represent the latest holdings. Relatively high ownership concentration and a low turnover rate imply that the actually tradable float is relatively limited, and prices may be sensitive to marginal fund-flow changes. In a low-liquidity environment, short-term trading may experience relatively pronounced price volatility and execution slippage.

A verifiable volume-confirmation signal would be the following: if daily turnover remains above RMB 150 million during the coming week and the share price closes above the RMB 58.0–59.2 range, this could indicate a clear improvement in short-term fund participation. If volume rises but the stock closes back below RMB 54, this should instead be understood as increased fund divergence or realization pressure, rather than simply a bullish signal.

④ Points to Monitor (Observation Framework Only, Not Trading Instructions)

• Observe whether the RMB 54.1–55.0 support zone can hold decisively; if it fails, monitor the RMB 50.3–52.0 strong-support zone. This is an observation framework, not a trading instruction.
• Observe whether the RMB 57.7–59.2 resistance zone is decisively broken with accompanying turnover. This is an observation framework, not a trading instruction.
• Observe whether turnover can remain above RMB 150 million, rather than merely showing a one-day volume spike. This is an observation framework, not a trading instruction.
• Observe whether main-fund flows shift from the net-outflow status of September 9–11 to consecutive net inflows. This is an observation framework, not a trading instruction.

The above scenario analysis is based on the September 11, 2026 closing data and historical prices and technical indicators. Short-term share prices may also be affected by news, fund flows, broader market conditions, and other factors. Technical indicators themselves have limitations and are lagging. This analysis does not guarantee future price performance or constitute a buy or sell recommendation. Investors should independently assess the situation based on the latest market information and bear their own investment risks.

6. Industry Structure and Competitor Analysis

6.1 Industry Overview

The global crop-protection industry is mature and characterized by relatively inelastic demand. Demand is related to food-crop acreage, pest and disease incidence, agricultural-product prices, and the adoption of genetically modified crops. Industry materials cited in the research notes estimate that the traditional crop-protection market will maintain annual growth of approximately 2% through 2030, meaning the overall industry is not a high-growth market.

6.2 Competitive Landscape

• Global demand is relatively stable but growing slowly; non-patented pesticide market share continues to expand.
• Pesticide technical capacity is temporarily excessive, and price competition is intense; large-volume technicals are prone to homogeneous competition.
• Environmental, energy-consumption, and safety regulations have raised entry barriers. Pesticide registrations, registration data, and experience with local regulations constitute important barriers.
• Overseas local channels, brands, and end-market service capabilities are increasingly important. Differentiated small-volume products, advanced processes, and premium formulations are more likely to achieve higher margins.
• According to 2024 statistics from the China Crop Protection Industry Association, there were 115 pesticide companies with sales above RMB 500 million, with combined sales of RMB 284.887 billion. Four companies had sales exceeding RMB 10 billion, indicating increased industry concentration.
• In the 2024 sales rankings, ADAMA, Rainbow, Sino-Agri Leading Biosciences, and Yangnong Chemical ranked among the leaders. Industry rankings use different statistical methodologies. Some sources show Rainbow sales of RMB 13.296 billion, while another top-100 sales ranking shows RMB 11.485 billion; these figures should not be mixed directly.

6.3 Major Competitors

Rainbow is a large company in China’s second tier of pesticide companies, outside the industry’s first tier. It has revenue above RMB 10 billion, an extremely high proportion of overseas revenue, integrated technical and formulation capabilities, and a sizeable global registration and overseas sales network. Compared with ADAMA, it remains smaller in global brands and scale. Compared with Yangnong Chemical and Xin’an Chemical, its advantages are more concentrated in overseas registrations, channels, and end-market operations rather than basic-chemical integration. Compared with Sino-Agri Leading, Rainbow is more focused on global manufacturing and overseas brand services; the two are expanded comparable companies with some areas of overlap.

7. Risk Factors

• Foreign-exchange risk is significant: Overseas revenue accounted for 99.18% in 2025, and RMB appreciation and foreign-exchange fluctuations reduced profit by approximately RMB 234 million in the first half of 2026. Further adverse exchange-rate movements could put additional pressure on net profit attributable to shareholders.
• Overseas operations and collection risks are high: Accounts receivable were RMB 5.196 billion at the end of 2025, approximately 35.37% of 2025 operating revenue and 4.97x that year’s net profit attributable to shareholders. The company also faces risks from overseas channel inventory, distributors’ financial conditions, regional credit conditions, and changes in local agricultural conditions.
• Volatility in raw-material and technical prices may compress profit: Materials accounted for 92.09% of operating costs in 2025. The technicals required for formulation production, aside from a portion produced in-house, are mainly purchased domestically, while large-volume, commoditized technicals are closer to price-taker products.
• Product and business mix remains exposed to herbicide concentration: Herbicide revenue was RMB 10.013 billion in 2025, accounting for 68.17% of operating revenue. A downturn in herbicide prices, supply and demand, or the industry inventory cycle could materially affect overall revenue and gross margin.
• Excess industry capacity and project-return risks require monitoring: Because of excess capacity, falling product prices, and changes in demand, the company has terminated certain glyphosate and herbicide projects and redirected remaining raised funds to global-registration projects. Uncertainty remains over future capacity additions, registration investment, and commercialization progress.
• Cash-flow and working-capital risks require monitoring: Net cash flow from operating activities fell 86.00% year on year to RMB 125 million in the first half of 2026. As the company continues global expansion and localization, further increases in accounts receivable, inventory, or overseas channel funding commitments could increase financial pressure.
• Valuation and earnings-delivery risks coexist: As of September 11, 2026, the company’s dynamic or trailing P/E was approximately 20–21x, while institutional forecasts for 2026 net profit attributable to shareholders ranged from RMB 1.082 billion to RMB 1.445 billion. If exchange rates, overseas demand, product prices, or gross margins fall short of expectations, valuation absorption and earnings delivery could be affected.
• Equity-pledge and trading-liquidity risks have not been fully eliminated: Even after the controlling shareholder’s September pledge release, approximately 24.88% of its holdings remained pledged. The ten largest shareholders held approximately 79.75% of total shares, while the actual controller and controlled entities held approximately 67%. Recent turnover rates were generally low, and marginal fund-flow changes could amplify share-price volatility.

8. Conclusion and Outlook

Rainbow’s core growth thesis lies in extending from traditional technical supply and Model A/B businesses toward Model C, global formulations, registrations, brands, and local channel services, while increasing product value through expansion in North American and EU markets and through insecticide, fungicide, and new active-ingredient registrations. The rising share of Model C, improved gross margin in the first half of 2026, and quarter-on-quarter recovery in second-quarter revenue and net profit indicate that business-mix optimization is beginning to provide operating support.

Whether earnings can continue to improve will depend on overseas demand and product prices, Model C expansion, a higher proportion of differentiated products and formulations, technical cost control, and RMB exchange-rate movements. Revenue grew but net profit declined in the first half of 2026, while operating cash flow fell substantially, indicating that profit recovery has not yet fully translated into improved cash flow. Institutional forecasts for 2026 net profit attributable to shareholders range from RMB 1.082 billion to RMB 1.445 billion, a relatively wide spread, and actual delivery requires further observation.

The company’s valuation is no longer at the level of a low-valued traditional chemical stock, and future valuation changes will be closely linked to the delivery of earnings growth. Technically, approximately RMB 54.1–55.0 is a short-term support reference, while RMB 57.7–59.2 is a resistance reference. However, these indicators are lagging, and the share price will also be affected by exchange rates, overseas markets, fund flows, and pesticide-product prices.

Data Sources

• https://static.cninfo.com.cn/finalpage/2025-04-25/1223265948.PDF
• https://static.cninfo.com.cn/finalpage/2026-04-27/1225191685.PDF
• Company Announcements_Rainbow: 2025 Annual Report_Sina Finance_Sina.com
• Rainbow (301035) Historical P/E, Historical P/B, Historical Dividend Yield, News, Financial Reports, Research Reports, and Data - Financial Dash
• China’s Pesticide Industry Sales Ranking of Companies with Revenue Above RMB 500 Million Released: ADAMA, Rainbow, and Sino-Agri Leading Rank Among the Top Three - China Pesticide Network
• Analysis of China’s Pesticide Industry Development Trends and Investment Prospects (2026–2033) - GuanYan Report
• Rainbow (301035)_Company Announcements_Rainbow: 2026 Interim Report Summary_Sina Finance_Sina.com
• Rainbow (301035)_Company Announcements_Rainbow: 2026 Interim Report_Sina Finance_Sina.com
• Rainbow (301035) 2026 Interim Report Review: Business-Mix Optimization and Continued Gross-Margin Improvement; Foreign-Exchange Losses Weigh on Current-Period Results_Sina Finance_Sina.com
• Rainbow 2026 Interim Report Full Text
• Rainbow (301035)_Company Announcements_Rainbow: 2025 Annual Report Summary_Sina Finance_Sina.com
• Rainbow (301035) Earnings Forecasts_F10_East Money Financial Services
• Institutional Ratings | Two Institutions Updated Rainbow’s Rating
• Rainbow (301035) Historical Stock Data: Historical Prices, Charts, and Trends_Investing.com
• Rainbow (301035) P/E | Valuation | Fundamentals - Lixinger
• Rainbow (301035) Latest Developments_F10_East Money Financial Services
• Rainbow (301035)_Company Announcements_Rainbow: 2026 Interim Report Summary_Sina Finance_Sina.com
• Rainbow (301035)_Company Announcements_Rainbow: Announcement on Partial Release of Pledges by the Controlling Shareholder_Sina Finance_Sina.com
• Rainbow (301035)_Company Announcements_Rainbow: Announcement on Pledge of Partial Shares by the Controlling Shareholder_Sina Finance_Sina.com
• Rainbow (301035)_Company Announcements_Rainbow: Announcement on Completion of the Share-Increase Plan by the Actual Controller and Chairman and the Results of the Increase_Sina Finance_Sina.com
• https://disc.static.szse.cn/download/disc/disk03/finalpage/2026-08-22/d7c87d7c-f52e-4fc4-802c-d7e6897f6f7a.PDF
• Rainbow (301035)_Company Announcements_Rainbow: Announcement on Implementation of the 2026 Interim Equity Distribution_Sina Finance_Sina.com
• Rainbow (301035)_Company Announcements_Rainbow: August 24, 2026 Investor-Relations Activity Record_Sina Finance_Sina.com
• List of ChiNext-Listed Companies on the Shenzhen Stock Exchange
• Rainbow (301035)_Stock Quotes, Quotes Homepage_China Financial Online
• Rainbow (301035.SZ) Stock Quotes_Historical Data_Main Fund Flows_Dawave Data
• Shandong Weifang Rainbow Chemical Co Ltd (301035) Historical Prices - Investing.com
• Rainbow (301035) Historical Stock Data: Historical Prices, Charts, and Trends_Investing.com
• Single-Stock Research
• Rainbow (301035) - Historical Trading Data | Dabanke
• Rainbow (301035) Shareholder Research_F10_East Money Financial Services

This report was automatically retrieved, compiled, and generated by AI based on publicly available information. Information is current through the market close on September 11, 2026; complete technical indicators are primarily as of September 8, 2026, and shareholder-structure data as of June 30, 2026. Different data sources use different methodologies for the closing price, low price, and 52-week highs and lows, and may involve timing differences. Specific data should be based on the company’s formal announcements and authoritative data terminals. This report is for information organization and research reference only and does not constitute investment advice. Investors should make independent judgments and bear their own investment risks.