SHOUGANG RES (00639) surged more than 4% in afternoon trading, last up 3.74% at HKD 2.775, with a turnover of HKD 36.8495 million.

The company earlier issued a profit alert, forecasting first-half net profit between HKD 550 million and HKD 600 million, representing a 36% to 49% year-on-year increase. Guoyuan International noted the midpoint estimate of HKD 575 million implies a 42.3% growth. Calculated at the midpoint, the first-half earnings already account for 91% of the full-year 2025 net profit attributable to shareholders of HKD 632 million, showing a significant release of earnings elasticity.

The broker pointed out that with stricter safety supervision in Shanxi, persistently tight supply of high-quality primary coking coal, and imported coal being unable to fully replace domestic supply, the coking coal price center is likely to remain supported in the second half of the year. As a platform for scarce coking coal resources, the company combines low leverage with high dividend characteristics. If earnings continue to recover and the high payout policy is sustained, the company's dividend yield for 2026E-2027E could reach 7% or above, making it an attractive long-term high-yield proposition.