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HK Equities · Finance research note

HKEX 0769 - China Rare Earth Holdings Ltd.

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Evidence and analysis

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2. Company Fundamentals

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.) 67.75%
Risk / Std Dev (Ann.) 61.50%

Price Snapshot:

Metric Value
Last Price 0.700 HKD
Day Change 0.000

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in HK$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2024 FY2023
Revenue Reported revenue HK$756.66M HK$686.07M
Net income Reported net income HK$-104.92M HK$-200.54M
Total assets Year-end reported balance HK$2.00B HK$2.15B
Shareholders’ equity Year-end reported balance HK$1.92B HK$2.06B
Net margin Net income ÷ revenue -13.87% -29.23%
Asset turnover Revenue ÷ total assets 0.3778x 0.3186x
Equity multiplier Total assets ÷ shareholders’ equity 1.0445x 1.0433x
ROE Net margin × asset turnover × equity multiplier -5.47% -9.71%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

FCFF DCF exception: Missing verified DCF inputs: capex. This post deliberately does not publish a mechanical enterprise value or implied per-share value on an unsuitable basis.

Available valuation input Value
Last market price HK$0.70
Market capitalisation HK$1.95B
Revenue HK$756.66M
EBIT -HK$106.53M
Reported free cash flow -HK$312.75M
FCF yield -16.01%
Net debt / EBITDA 12.48x

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks not rated — FCFF DCF suitability or data-integrity condition not met
Lynch-inspired balance-and-growth checks not rated — FCFF DCF suitability or data-integrity condition not met

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 16:35:51.550805 UTC; latest reported fiscal period: 2024-12-31 00:00:00. Financial institutions and REITs require sector-specific methods rather than a mechanical FCFF DCF. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set Asia Pacific ex Japan
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-20 to 2026-06-30
Aligned daily observations 210
Minimum observation requirement 120
Currency conversion for HK listings HKD adjusted close divided by daily USD/HKD close before simple daily return calculation

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha -2.92% -2.99%
Adjusted R² -0.00 -0.01
Annualised residual volatility 0.83% 0.83%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) -0.00 (-0.94) -0.00 (-0.51)
Size (SMB) -0.00 (-0.22) 0.00 (0.41)
Value (HML) -0.01 (-1.65) -0.01 (-1.60)
Profitability (RMW) NM 0.00 (0.23)
Investment (CMA) NM 0.01 (0.95)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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