Sichuan Hongda Co Ltd Surges Amidst Broader Metals and Phosphates Rally

Sichuan Hongda Co Ltd (SHL) has jolted the Shanghai Stock Exchange with a record‑setting price‑to‑earnings ratio that remains negative, yet the company’s shares have broken out on a bullish trend that echoes the broader movement in the metals and phosphates sector. The latest trading data show the stock closing at 10.92 CNY on 2025‑10‑28, a significant increase from the 52‑week low of 5.64 CNY, and approaching the 52‑week high of 11.83 CNY.

Catalyst: Sector‑Wide Momentum

The rally in SHL’s share price is not an isolated phenomenon. On 2025‑10‑29, the phosphates‑focused segment experienced a “震荡反弹” (oscillatory rebound) that pushed several names to the limit‑up. According to a report by Jiemian published through the Eastmoney platform, Chuan Heng (川恒股份) hit the daily ceiling, and other related companies—Yun Tian Hua (云天化), Yun Tu Holdings (云图控股), Jin Cheng Xin (金诚信), Hong Da (宏达股份), Xing Fa Group (兴发集团), Si Er Te (司尔特)—all followed suit. The same day, Eastmoney highlighted that the non‑ferrous metals segment was also gaining traction: Zhongxin Metal (中信金属) and Da Zhong Mining (大中矿业) reached the daily limit, while Hong Da (宏达股份) was among the stocks that surged.

These sector‑wide movements underscore a renewed investor appetite for companies involved in zinc production and phosphorus‑based fertilizers—two core pillars of SHL’s product mix. The company’s specialization in zinc ingots and zinc oxide complements its robust chemical portfolio, which includes phosphamidon, ordinary super phosphates, calcium phosphates, potash fertilizers, and compound fertilizers. Investors are clearly rewarding the synergy between the metal and chemical segments.

Fundamental Context

Sichuan Hongda’s market cap stands at 27.58 billion CNY, with a market valuation that reflects its substantial production footprint in Chengdu. Although its P/E ratio is a striking –226.51, indicating that the company is currently trading at a negative earnings level, this figure should be interpreted against the backdrop of a highly cyclical industry that often experiences earnings volatility. The negative P/E also suggests that the market may be betting on a turnaround driven by the sector’s upward trajectory and potential upside in zinc and phosphate prices.

The company’s IPO, launched on December 6 2001, has positioned it as a longstanding player in the Chinese metals and mining arena. Its website (www.sichuanhongda.com ) offers detailed insights into its production capacities and product lines, underscoring a diversified business model that spans from primary zinc extraction to the manufacturing of finished chemical products.

Market Dynamics

The Non‑Ferrous Metals ETF (159652) rose 1.98%, trading a volume of 33.855 million CNY, while the Rare Metals ETF (159608) climbed 1.76%, with a turnover of 29.1663 million CNY. These ETF movements hint at a broader inflow of capital into the metals space, a sentiment that is directly reflected in individual stocks like SHL.

The trading environment on 2025‑10‑29 was further bolstered by 暗盘资金—off‑market capital—pouring into these names. This invisible hand underscores the confidence of institutional investors, who are likely anticipating continued price appreciation as supply constraints tighten and demand from downstream industries—such as battery manufacturing and construction—remains robust.

Strategic Implications

  • Supply Chain Resilience: SHL’s dual focus on zinc and phosphorus products positions it to capture demand from multiple end‑users, ranging from electronics manufacturers to agricultural producers.
  • Price Transmission: The company’s integrated operations can potentially translate upstream commodity price gains into higher margins downstream, especially if zinc and phosphate spot prices rise.
  • Investment Thesis: Despite a negative P/E, the sustained sector momentum, coupled with an expanding product portfolio, suggests a bullish case for SHL, particularly as global demand for battery materials and high‑quality fertilizers continues to climb.

In conclusion, Sichuan Hongda Co Ltd’s recent breakout is emblematic of a broader, sector‑driven rally that capitalizes on the intersection of metals and chemical manufacturing. The company’s strategic positioning, coupled with a favorable macro‑economic backdrop, may well serve as a bellwether for the future trajectory of China’s materials industry.