Shenghe Resources Holding Co., Ltd. (600392)

Stock Analysis Report　|　Industry: Rare Earths and Zirconium-Titanium Products　|　Report Date: 2026-10-02　|　Market data as of the close on 2026-09-30

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

Core conclusion: Rising rare earth prices are accelerating profit growth, but earnings remain constrained by cyclicality and cash flow

Market data as of the close on 2026-09-30

1. Key Investment Points

• Interim profit growth significantly outpaced revenue growth: In the first half of 2026, revenue was RMB 8.759 billion, up 41.76% year over year; net profit attributable to shareholders of the parent company was RMB 887 million, up 135.24%; and net profit excluding non-recurring items grew 141.23% year over year.
• Rare earth prices are the main growth driver at present: Rare earth products accounted for 94.5% of main business revenue in 2025. Revenue grew 32.94% year over year in 2025, while gross margin was 11.12%, up 6.57 percentage points year over year. Growth remains affected by product prices and the pass-through of raw material costs.
• Valuation is low, while PB is near its historical median: The closing price on September 30 was RMB 20.17, with PE-TTM of 26.21x and PB-MRQ of 2.71x, at the 25th and 47th percentiles, respectively, over the past 5.2 years. The consensus forecast for 2026 net profit growth is 86.29%.

Market Expectations and Evidence

• What the market is pricing in: The market implies average annual EPS growth of approximately 14.2%, below institutions’ expectations for net profit growth in 2026–2028 of 86.29%, 27.00%, and 24.89%, respectively. The long-term growth requirement implied by the valuation is relatively modest.
• What the evidence shows: First-half net profit grew 135.24%, in line with expectations for strong near-term growth. However, growth was mainly driven by rising rare earth prices; net operating cash flow/net profit was -0.70, and inventory turnover days increased to 126.5 days. The sustainability of earnings and cash collection remain to be verified.

Evidence leans: Bullish; Confidence: Medium

Profit growth is accelerating and PE is at a low historical percentile. However, growth depends on rare earth prices, while cash flow and inventory turnover remain weak.

2. Business and Competitiveness

2.1 Business Mix

The company produces, sells, and trades rare earth products, and also operates in zirconium-titanium beneficiation products; revenue mainly comes from rare earth products.

2.2 Competitive Advantages

Strength of competitive advantages: Weak

• Diversified raw material channels: Long-term supply arrangements, equity stakes, and offtake arrangements, but not yet proven to provide low-cost self-supplied resources
• Supply chain coverage: Presence in rare earth beneficiation, smelting and separation, and metal processing, covering both light and heavy rare earths
• Process expertise: The company reports accumulated expertise in beneficiation, separation, and processing technologies, with more than 410 patents as of 2024

Key threats: Falling rare earth and zirconium-titanium prices, as well as delays in passing through raw material costs, could squeeze profits; overseas projects and new capacity carry execution and integration risks.

2.3 Supply Chain Position and Earnings Trend

• Rare earth feedstock includes rare earth concentrate, southern ion-adsorption rare earth ore, monazite chloride flakes, and NdFeB scrap; the zirconium-titanium business purchases heavy mineral sands such as overseas zirconium-titanium raw ore and concentrates.
• Long-term supply arrangements, equity stakes, and offtake arrangements have expanded sourcing channels, but the annual report does not show that the company can materially control purchase prices. In 2025, industrial direct materials were RMB 10.194 billion, accounting for 76.48% of total costs.
• The company sells rare earth and zirconium-titanium products, mainly raw materials or intermediate products. Customer identities have not been disclosed, so customers’ bargaining power cannot be quantified.
• Pricing is affected by raw material prices, supply and demand, and the pass-through of market prices for products. Improved market conditions in 2025 drove higher product prices and sales volumes, but do not indicate stable, one-way pricing power.
• In 2025, the top five customers accounted for 36.39% of sales, and the top five suppliers accounted for 31.75% of purchases. Only 2025 annual report data are available; the source is singular and has not been cross-verified, and customer identities have not been disclosed.
• At year-end 2025, accounts receivable were RMB 1.301 billion, equivalent to approximately 8.7% of revenue and 1.55x net profit attributable to shareholders of the parent company; prepayments were RMB 350 million, down 42.92% year over year.

The company is positioned in the midstream of the rare earth supply chain, with some presence at the resource end. Earnings remain driven by product prices and raw material costs. Key to improvement will be converting raw material security into low-cost supply, increasing the contribution from self-produced and value-added products, and limiting the drag from low-margin trading.

2.4 Industry and Peer Comparison

A recovery in rare earth prices can quickly improve the company’s earnings, but weakening profits in 2023–2024 and a rebound in 2025 show that earnings remain significantly exposed to product price cycles.

Shenghe Resources’ rare earth product revenue is lower than China Northern Rare Earth’s but higher than China Rare Earth’s. Its 2025 gross margin for rare earth products was close to Xiamen Tungsten’s and below those of China Northern Rare Earth and China Rare Earth. Differences in product mix, the proportions of self-produced and traded products, and raw material sources mean gross margins cannot be directly equated with long-term competitiveness.

3. Financial Quality

3.1 Operating Performance

As of October 2, 2026; figures are based on the disclosures in the 2026 interim report and the 2025 and 2024 annual reports.

Higher rare earth product prices drove performance, with profit growth significantly outpacing revenue growth; quarterly growth accelerated further in the interim report. Operating cash flow turned negative, which the company attributed to increased procurement, inventory, and prepayments. Inventory turnover and cash collection should be monitored going forward.

3.2 Financial Health Check

4. Valuation and Market Expectations

4.1 Valuation

Valuation multiples were calculated programmatically using closing data as of 2026-09-30 (trailing twelve-month basis); peer multiples were calculated on the same basis using closing data as of 2026-09-30.

Market-implied expectations: At the current PE of 26.21x, if investors require an annualized return of 8% and assume a PE of 15x in 10 years, EPS would need to grow at an average annual rate of approximately 14.2% (excluding dividends and using a conservative assumption). This can be compared with the institutional growth forecasts below.

PE-TTM of 26.21x is at the 25th percentile over the past 5.2 years, below the company’s median of 44.52x; PB-MRQ of 2.71x is at the 47th percentile, close to the median of 2.76x; and PS-TTM of 2.01x is at the 52nd percentile, slightly above the median of 1.94x. The market implies average annual EPS growth of approximately 14.2%, below institutional forecasts for the next three years, but delivery of those forecasts still depends on rare earth prices and cash conversion of profits.

4.2 Consensus Estimates

Average estimates from 2 institutions covering the company over the past six months, as of October 2, 2026; the consensus data do not provide a range of forecast dispersion.

4.3 Institutional Views

No institutional target prices available for citation

5. Catalysts and Recent Events

5.1 Key Upcoming Milestones

5.2 Recent Important Events

• 2026-07-11 First-half earnings preannouncement confirmed by interim report (positive): The company forecast first-half net profit attributable to shareholders of the parent company of RMB 800–930 million; the actual interim report result fell within the range. The company said growth was mainly driven by higher rare earth product prices.
• 2026-09-16 First share repurchase executed (positive): The company repurchased 1.5673 million shares for RMB 33.357 million. The total planned repurchase amount is RMB 200–400 million; the scale of subsequent implementation remains to be seen.
• 2026-09-16 Interim dividend proposal approved by shareholders’ meeting (positive): The shareholders’ meeting approved an interim dividend of RMB 0.50 per 10 shares (tax inclusive). As of the analysis date, the record date, ex-dividend date, and payment date had not been determined.
• 2026-09-21 Company denies rumors of a transfer of controlling rights (neutral): The company stated that its controlling shareholder had no plans to transfer control of the company to an external party. Market rumors do not constitute an acquisition or change of control that has already occurred.

6. Bull-Bear Debate and Risks

6.1 Bull Case

• Gross margin for rare earth products rose to 11.12%, up 6.57 percentage points year over year, showing that improved prices and sales volumes have translated into an earnings recovery.
• Institutions expect net profit to grow 27.00% and 24.89% in 2027 and 2028, respectively. If product prices remain stable, growth will not depend solely on a low base in a single year.

6.2 Bear Case

• Earnings remain significantly cyclical: overall gross margin fell from 18.72% in 2021 to 4.35% in 2023 and recovered to 10.66% in 2025, still below the previous level.
• Cash conversion has yet to catch up with profits: net operating cash flow/net profit was -0.70 in the 2026 interim report, and inventory turnover days increased from year-end 2025.

6.3 Other Risks

• The top five customers account for 36.39% of sales, and their identities have not been disclosed. If major customers demand lower prices or reduce purchases, sales volumes and profitability may be affected.
• The top five suppliers account for 31.75% of purchases, while raw material costs account for 76.48% of total costs. If changes in supply or purchase prices cannot be passed through to downstream customers in a timely manner, gross margin may come under pressure.
• The Leshan polishing powder project and Hainan warehouse project remain at the planned commissioning, acceptance, and trial-operation stages. Delays or a slow ramp-up would postpone the contribution from new capacity and the realization of valuation expectations.

7. Monitoring Checklist

8. Share Price and Short-Term Outlook (Next Week, Scenario Analysis for Reference Only)

⚠️ Risk warning: The following subjective scenario analysis is based on current technical and capital-flow conditions. The weightings are for relative reference only, not statistical probabilities; short-term volatility risk is high.

8.1 Technical Overview

The share price is below MA5 through MA60, down 9.1% over the past 5 days and 11.34% over the past 20 days. The negative MACD histogram is widening, indicating near-term weakness; the close is near the lower Bollinger Band, while RSI6 is at a low level. A rebound would require the price to stabilize at the lows and trading volume to increase to confirm the signal.

8.2 Key Price Levels

8.3 One-Week Range Estimated from Historical Volatility

Using the 2026-09-30 price of RMB 20.17 as the base, the closing price range for the next 5 trading days is estimated from the return distribution over the past 300 trading days (scaled to a current index-weighted daily volatility of approximately 2.8%, while retaining this stock’s own frequency of sharp rises and falls):

This range reflects only the stock’s recent volatility and does not indicate price direction. Actual performance may exceed the range in the event of a major announcement or a sharp market decline.

8.4 Scenarios for the Next Week (Subjective Weightings, Not Statistical Probabilities)

• Consolidation (higher weighting, approximately one-half): RMB 19.80–21.50; support at RMB 20.01–20.14 holds, trading volume does not increase materially, and the share price consolidates around the lows. Based on historical volatility, the probability of the closing price one week from now falling within this range is approximately 50%.
• Further weakness (medium weighting, approximately three-tenths): RMB 19.00–20.01; a high-volume break below RMB 20.01 without a recovery could lead to a test of the area around the 52-week low. Based on historical volatility, the probability of the closing price one week from now falling within this range is approximately 30%.
• Rebound (lower weighting, approximately two-tenths): RMB 21.28–22.85; a recovery toward MA60 and the upper Bollinger Band range would be possible only if trading volume increases and the share price moves above RMB 21.28. Based on historical volatility, the probability of the closing price one week from now falling within this range is approximately 15%.

The weightings in parentheses are subjective; the probabilities at the end of each sentence are inferred from the volatility ranges above and reflect volatility only, not direction.

8.5 Capital Flows and Liquidity

Over the past 10 trading days (2026-09-16~09-30), daily trading value was approximately RMB 363 million–1.045 billion, with a turnover rate of approximately 1.02%–2.7%. As of 2026-06-30, the top 10 holders of tradable shares collectively owned 38.27%; these included individuals, shareholders related to geology and mineral resources, as well as ETFs and QFIIs. Shareholder disclosures are lagged, so the ownership structure may have changed. Recent trading activity has fluctuated, and changes in liquidity should be monitored when trading.

If trading value exceeds RMB 1.045 billion for two consecutive days and the closing price moves above RMB 21.28, this can be treated as a testable signal of a high-volume strengthening trend.

The above scenario analysis is based on closing data as of 2026-09-30 and calculations using historical prices and technical indicators. In the short term, share prices may also be affected by news, capital flows, the broader market, and other factors. Technical indicators themselves have lag and limitations; this analysis does not guarantee actual future performance and does not constitute a buy or sell recommendation. Please make independent judgments based on the latest market information and assume your own investment risks.

Sources

• 盛和资源(600392)_公司公告_盛和资源：2022年年度报告新浪财经_新浪网
• 盛和资源控股股份有限公司2025年年度报告
• 盛和资源(600392)_公司公告_盛和资源：2024年年度报告(更正版)新浪财经_新浪网
• 盛和资源(600392)_公司公告_盛和资源：2025年年度报告新浪财经_新浪网
• 盛和资源(600392)_公司公告_盛和资源：盛和资源2021年年度报告新浪财经_新浪网
• 盛和资源(600392)_公司公告_盛和资源：2023年年度报告新浪财经_新浪网
• 北方稀土: 北方稀土2025年度报告全文_公司公告_每日必读_股票_证券之星
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• 东方财富 F10 财务分析
• 东方财富 F10 盈利预测
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• static.cninfo.com.cn（公告PDF）
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• 盛和资源(600392)_公司公告_盛和资源：关于以集中竞价交易方式首次回购股份的公告新浪财经_新浪网
• 盛和资源(600392)_公司公告_盛和资源：2026年中期分红预案的公告新浪财经_新浪网
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• 中国证券报 - 盛和资源控股股份有限公司<BR/>关于媒体报道的澄清公告
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• 证券代码：600392　　证券简称：盛和资源　　公告编号：2026-029
• 东方财富 个股资金流向
• 东方财富 股东研究

This report was automatically researched, compiled, and generated by AI using publicly available information. Information is current as of the close on 2026-09-30 and may be subject to timing differences. Please refer to the company’s formal announcements and authoritative data terminals for specific figures. This report is for information compilation and research reference only and does not constitute investment advice. Investors should make independent judgments and assume their own investment risks.