SHOUGANG RES rose over 7% as Tianfeng Securities initiated coverage with a "Buy" rating

Tianfeng Securities published a report, initiating coverage on Shougang Resources (00639.HK) with a "Buy" rating and a target price of HKD 3.77. The firm forecasts that Shougang Resources' net profit attributable to shareholders will be HKD 1.067 billion, HKD 1.328 billion, and HKD 1.474 billion for the years 2025 to 2027, with earnings per share of HKD 0.21, HKD 0.26, and HKD 0.29, respectively.

Tianfeng Securities pointed out that based on the company's expense ratio and debt-to-equity ratio, the company's operations are relatively conservative and stable. The two main factors leading to the company's low ROE are the low asset turnover and equity multiplier, with the low asset turnover primarily due to the company accumulating a large amount of cash during the high coal price period in recent years, and the low equity multiplier mainly because the company's debt-to-equity ratio ranks lower compared to its peers, most of which are above 50%, while Shougang Resources' debt-to-equity ratio is only around 20%. In fact, from the perspective of gross margin and net margin, the company's profitability is quite strong.

Shougang Resources opened flat today, reaching a high of HKD 3.26. It is currently reported at HKD 3.24, up 7.64%, with a trading volume of 14.3812 million shares, involving HKD 45.373 million