Shougang Fushan Resources Group Limited (0639) AI Stock Analysis

• Market Cap: HK$16.80B
• Dividend Yield: 9.28%
• Average Volume (3M): 11.15M
• Price to Earnings (P/E): 15.5
• Beta (1Y): 0.41
• Revenue Growth: -5.78%
• EPS Growth: -29.52%
• Country: HK
• Employees: 4,105
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Coal
• EPS (TTM): 0.08
• Shares Outstanding: 5,091,066,000
• 10 Day Avg. Volume: 7,136,523
• 30 Day Avg. Volume: 11,150,861
• PEG Ratio: -0.40
• Price to Book (P/B): 0.76
• Price to Sales (P/S): 2.46
• P/FCF Ratio: 6.48
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$3.52
• Price Target Upside: 12.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 1.4
• Revenue Forecast (FY): HK$29.71B

• Rating: 79 Outperform
• Price Target: HK$3.50 ▲(11.46% Upside)

The stock's overall score is driven by strong technical indicators and a robust balance sheet, despite challenges in revenue and cash flow generation. The attractive dividend yield further supports the valuation, making it appealing for income-focused investors.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage provides financial stability, allowing the company to withstand market fluctuations and invest in growth opportunities.

Operational Efficiency

Maintaining healthy EBIT and EBITDA margins indicates effective cost management and operational efficiency, which supports long-term profitability.

High Dividend Yield

A high dividend yield offers a steady income stream for investors, enhancing shareholder value and potentially attracting income-focused investors.

Negative Factors

Declining Revenue

Decreasing revenue suggests challenges in market demand or competitive positioning, which can impact long-term growth prospects.

Cash Flow Concerns

Zero operating cash flow raises concerns about the company's ability to fund operations and invest in future growth, potentially limiting strategic flexibility.

Declining Profitability

A declining net profit margin indicates reduced profitability, which could affect the company's ability to reinvest in its business and maintain competitive advantages.

Shougang Fushan Resources Group Limited Business Overview & Revenue Model

Company Description

Shougang Fushan Resources Group Limited (0639) is a Hong Kong-based investment holding company primarily engaged in the resources sector. The company focuses on the extraction, processing, and sale of iron ore and other mining and mineral resources. Its core operations include the mining of iron ore, production of iron ore concentrates, and trading activities, which cater to both domestic and international markets, primarily targeting the steel manufacturing industry.

How the Company Makes Money

Shougang Fushan Resources Group Limited generates revenue primarily through the sale of iron ore and iron ore concentrates. The company operates its mining projects in China, which allows it to leverage the high demand for iron ore driven by the steel industry. Key revenue streams include direct sales of mined minerals to steel manufacturers and traders. Additionally, the company may benefit from strategic partnerships and long-term contracts with steel producers that secure stable demand for its products. Market fluctuations in iron ore prices, operational efficiency, and the ability to maintain cost-effective mining operations also play crucial roles in the company’s earnings.

Shougang Fushan Resources Group Limited Financial Statement Overview

Summary

The company demonstrates solid financial stability with a strong balance sheet, characterized by low debt and high equity. However, recent declines in revenue and cash flow generation suggest challenges in sustaining growth and operational cash flows.

Income Statement

The company's income statement shows mixed results. While the gross profit margin is strong due to effective cost management, the net profit margin has declined over the last year, reflecting reduced profitability. Revenue has decreased in recent years, indicating a contraction in sales. However, EBIT and EBITDA margins remain healthy, suggesting strong operational efficiency.

Balance Sheet

The balance sheet is robust, with a very low debt-to-equity ratio indicating minimal leverage and financial risk. The company's equity ratio is high, reflecting a stable financial foundation. Return on equity is solid but has seen a slight decrease, suggesting a need to improve profitability or efficiency in utilizing shareholder equity.

Cash Flow

Cash flow metrics show some concerns. Operating cash flow has dropped to zero in the latest year, raising questions about the company's ability to generate cash from operations. Free cash flow has also diminished, impacting the company's ability to reinvest in growth. Despite these challenges, the company has a history of positive free cash flow relative to net income, indicating previous capability to generate cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.66B	5.06B	5.89B	8.21B	7.08B	4.00B
Gross Profit	1.82B	2.59B	3.47B	5.22B	4.32B	1.79B
EBITDA	2.22B	2.95B	3.92B	5.41B	4.73B	2.18B
Net Income	1.06B	1.49B	1.89B	2.72B	2.54B	1.08B
Balance Sheet
Total Assets	22.89B	22.95B	22.49B	23.46B	24.78B	21.43B
Cash, Cash Equivalents and Short-Term Investments	9.45B	9.18B	7.99B	7.20B	6.54B	4.06B
Total Debt	48.38M	43.68M	43.84M	32.12M	26.03M	25.04M
Total Liabilities	4.53B	4.05B	4.02B	4.79B	5.63B	4.14B
Stockholders Equity	15.86B	16.48B	16.28B	16.77B	17.30B	15.84B
Cash Flow
Free Cash Flow	1.04B	1.92B	4.04B	3.60B	3.44B	527.00M
Operating Cash Flow	1.59B	2.37B	4.54B	3.99B	3.94B	996.07M
Investing Cash Flow	-646.20M	-182.37M	759.31M	-857.17M	-1.97B	226.33M
Financing Cash Flow	-968.43M	-971.72M	-2.34B	-2.82B	-913.72M	-1.49B

Shougang Fushan Resources Group Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.14
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0639, the sentiment is Positive. The current price of 3.14 is above the 20-day moving average (MA) of 2.98, above the 50-day MA of 3.04, and above the 200-day MA of 2.70, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 76.47 is Negative, neither overbought nor oversold. The STOCH value of 88.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0639.

Shougang Fushan Resources Group Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1277	81 Outperform	HK$12.98B	7.61	19.63%	9.92%	-2.79%	-39.45%
0639	79 Outperform	HK$16.80B	15.51	6.64%	9.28%	-5.78%	-29.52%
1733	73 Outperform	HK$2.51B	9.13	3.21%	20.68%	-23.72%	-86.69%
1171	72 Outperform	HK$139.15B	8.88	―	8.02%	0.80%	-35.81%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
0975	58 Neutral	HK$11.51B	18.20	6.76%	―	-20.50%	-64.45%
0866	46 Neutral	HK$7.71B	21.11	81.71%	1.53%	-20.71%	209.68%

Shougang Fushan Resources Group Limited Corporate Events

Shougang Fushan Renews Connected Financial Services Pact With Shougang Finance

Shougang Fushan Resources Group Limited has entered into a new financial services framework agreement with Shougang Finance, an indirect wholly owned subsidiary of its substantial shareholder Shougang Group, to continue receiving deposit, credit and other financial services for the period from 1 January 2026 to 31 December 2028 after the current 2023 framework expires at the end of 2025. Because Shougang Finance is a connected person, the renewed arrangement constitutes continuing connected transactions and a discloseable transaction under Hong Kong Listing Rules, triggering reporting, annual review, announcement and, for certain deposit caps, independent shareholders’ approval requirements, underscoring the regulatory scrutiny and governance obligations around the group’s intra-group financing structure.

The most recent analyst rating on (HK:0639) stock is a Buy with a HK$3.50 price target. To see the full list of analyst forecasts on Shougang Fushan Resources Group Limited stock, see the HK:0639 Stock Forecast page.