SES(688480)：STRONG GROWTH IN REAGENTS AND ENCOURAGING RHENIUM MOMENTUM; WE REMAIN BULLISH ON THE COMPANY’S HIGH GROWTH POTENTIAL

机构：中信建投证券
研究员：WANG Jiechao/QIN Jing/SHAO Sancai

Key takeaway
1. In 2025, the company recorded net profit attributable to shareholders of the parent company excluding non-recurring items of RMB104mn, -10% YoY, mainly due to equity incentive expenses and increased bad debt provisions; in 1Q26, net profit attributable to shareholders of the parent company reached RMB32mn, +81% YoY.
2. In 1Q26, the rhenium price increased 113% YoY and 38% QoQ. As an extremely scarce “aerospace metal,” rhenium features rigid supply, strong demand growth, and significant strategic importance. The combined effect of these three factors is expected to keep the price center of rhenium on an upward trend. The company cooperates with Zijin and CMOC to carry out rhenium recycling business. Both volume and price are rising, and the rhenium business is expected to become the company’s largest performance growth driver in 2027.
3. Actively advancing the issuance of convertible bonds to support the rapid development of flotation reagents and copper extractants businesses.
Event
The company releases 1Q26 report
In 1Q26, the company recorded operating revenue of RMB232mn, +36% YoY; net profit attributable to shareholders of the listed company reached RMB32mn, +81% YoY.
The company releases 2025 annual report
In 2025, the company recorded total operating revenue of RMB1.23bn, +33% YoY; net profit attributable to shareholders of the parent company reached RMB106mn, -41% YoY; net profit attributable to shareholders of the parent company excluding non-recurring items reached RMB104mn, -10% YoY. A cash dividend of RMB4.2 (tax included) will be distributed for every 10 shares to all shareholders.
Quick Take
1. Equity incentive expenses and increased bad debt provisions led to a slight decline in net profit attributable to shareholders of the parent company excluding non-recurring items in 2025
In 2025, the company comprehensively advanced market expansion and overseas business expansion, with both operating services and product sales achieving steady growth. Among them, revenue from comprehensive solutions for heavy metal pollution control increased 39.51% YoY; revenue from mining and metallurgical environmental protection – operating services increased 40.65% YoY; revenue from copper extractant products increased 58.04% YoY. However, due to equity incentive expenses and increased bad debt provisions (resulting from overall sales scale expansion, longer payment cycles for overseas business, and some customers changing their payment method from cash to electronic debt certificates), the company recorded net profit attributable to shareholders of the parent company excluding non-recurring items of RMB104mn in 2025, -10% YoY.
In 2025, the company recorded R&D expenses of RMB64.08mn, +13.27% YoY. The company continues to increase R&D investment to accelerate the industrialization of technological achievements, focusing on developing new material products such as new flotation reagents, copper extractants, high-purity sodium sulfide, and ammonium perrhenate to create new business growth drivers. Recently, leveraging its technological advantages and leading market position in “biological agents for heavy metal wastewater treatment,” the company was recognized as a ““Hunan Provincial Manufacturing Single Champion Enterprise.”
2. In 1Q26, rhenium price increased 113% YoY and 38% QoQ. The rhenium business is expected to become the company’s largest earnings growth driver in 2027
In 1Q26, the average price of rhenium (99.99%, domestic) was RMB42,660.5/kg, up 113% YoY and 38% QoQ. As of April 30, the rhenium price was RMB47,320/kg, up 136% from the same period last year.
As an extremely scarce “aerospace metal,” rhenium has very limited supply. Global proven rhenium reserves are less than 3,000 tons. Production is mainly recovered during copper-molybdenum smelting. On one hand, supply is constrained by the gradual depletion of primary mineral resources. On the other hand, geopolitical factors and supply monopolies also create risks. Overall supply shows strong rigidity. On the demand side, the accelerated recovery of the global aviation industry, the booming aerospace sector, and AI-driven growth in gas turbine demand will support steady growth in rhenium demand for superalloys. From a strategic perspective, rhenium is a key material in nickel-based superalloys used in high-temperature aerospace engine blades. It is irreplaceable in the aerospace industry and is also a critical mineral essential for national security and military strategy. Major economies including China, the United States, and the EU have listed it as a critical mineral. Resonance of three attributes: The rhenium price center is expected to continue moving higher .
Based on years of technological accumulation, the company has cooperated with Zijin to develop rhenium recovery business. Currently, Jilin Zijin’s 2- ton ammonium perrhenate capacity has been put into operation. The company will continue to actively cooperate with Zijin (Heilongjiang Zijin, Julong) and leading domestic molybdenum enterprises (CMOC, Jinduicheng Molybdenum, Xiamen Tungsten). This will effectively improve China's self-sufficiency rate for rhenium resources, reduce reliance on imports, enhance national resource security, and protect the aerospace material system. Both volume and price are rising. The rhenium business is expected to become the company’s largest earnings growth driver in 2027.
3. Actively advancing the issuance of convertible bonds to support rapid development of flotation reagents and copper extractant businesses
On April 1, 2026, the company received the Notice on Accepting the Application of Science Environmental Protection Co., Ltd., a STAR Market-listed company, for Securities Issuance from the Shanghai Stock Exchange. In accordance with relevant regulations, the Shanghai Stock Exchange reviewed the prospectus for the securities issuance by the company as a STAR Market listed company and the related application documents submitted by the company, and determined that the application documents are complete and comply with sta tutory requirements. Therefore, the application has been accepted and will be reviewed in accordance with the law. The proceeds from this convertible bond issuance, after deducting issuance expenses, are intended to be used for: (1) reagent beneficiation and smelting expansion project (phase I); (2) construction project for an annual output of 100,000 tons of high-efficiency flotation reagents; and (3) replenishment of working capital; after the projects are completed, the company’s annual production capacity of copper extractants will increase by 5,000 tons, and the annual production capacity of high-efficiency flotation reagents will increase by 100,000 tons. The company’s revenue and profit are expected to grow steadily.
Investment recommendation: Net profit attributable to shareholders of the parent company is expected to reach RMB161mn, RMB353mn, and RMB508mn in 2026–2028, respectively. Based on the current share price, the corresponding PE ratios are 66.9x, 30.5x, and 21.2x. Considering the company’s position in the mining and metallurgical environmental protection industry, its strong growth potential, and the extremely strategic significance of rhenium metal, we assign the company a “Buy” rating.
Risks
1. Risk of policy changes in the heavy metal pollution control industry. The environmental protection industry is a classic policy-driven sector. Every new environmental policy or upgrade in standards creates favorable development conditions. In particular, higher emission standards often render traditional treatment methods obsolete or unstable, or significantly increase costs, which directly opens up substantial market space for new environmental technologies. Conversely, the intensity of regulatory oversight significantly impacts the industry. If there are major shifts in national environmental policies—such as relaxing certain emission indicators or weakening regulatory intensity—or if the company fails to promptly identify and adapt to policy trends, it could adversely affect future production and operations.
2. Risk of project construction progress falling short of expectations.
3. Significant drop in rhenium prices or production falling short of expectations. If the price of rhenium drops by RMB10mn/ton compared to our assumptions, it could cause the company’s 2027 net profit attributable to the parent to fall RMB20mn below our current forecast.
4. Hydrometallurgical copper refining in regions such as the Democratic Republic of the Congo and South America may reduce production due to a shortage of sulfuric acid, which in turn may affect the company ’s sales of copper extractants.