Kafpars Under the Lens: A 1,519% Revaluation-Based Capital Increase and the Fundamental Root of a Decade of Shareholder Frustration at Pars Refractories (July 13, 2026)

A Sahmino reader wrote: "Please explain Kafpars; I have held it for nearly ten years, and it has been nothing but losses." That feeling is common among the retail holders of Pars Refractories Products. In this report, neutrally and with no buy or sell recommendation, drawing on official exchange data and financial statements, we examine why this stock has felt "stagnant" to so many of its long-term holders, and what fundamental reality sits behind that picture.

The stock at a glance (as of July 13, 2026)

Item	Value
Ticker	Kafpars (TSE, first-market secondary board)
Full name	Pars Refractories Products Company
ISIN	IRO1NSPS0004
Industry	Other non-metallic mineral products (refractories)
Last price	3,700 rials (2.9% below the prior day)
Shares outstanding	2.5 billion shares
Market cap	About 925 billion tomans
Estimated EPS	351 rials
Stock P/E	About 10.5
Group P/E	About 9.7
52-week range (unadjusted)	1,978 to 4,150 rials
Fiscal year	Ending 30 Azar (late December)

The price figures are "unadjusted," meaning the effect of capital increases and dividends is not stripped out. As we will see, that single point is decisive for judging the "ten years of losses" claim.

What kind of company is Kafpars?

Pars Refractories Products was founded in 1986 (1365 in the Jalali calendar), began operating its first unit in 1993, and was listed on the Tehran Stock Exchange in 1999. Its main plant is in Yazd and its head office in Tehran.

The company's core product is refractory materials: refractory bricks (notably magnesite and magnesite-chrome brick), alumina brick, and various refractory masses and mortars. These are consumed mainly in the furnaces of the steel, cement, and non-ferrous metals industries. In plain terms, Kafpars is an industrial-input supplier, and the fate of its sales is tied to the country's steel and cement production cycle.

One important structural point: part of its raw materials and furnace spare parts are imported, while part of its revenue comes from exports. As a result, the exchange rate affects the company's margin from both sides, both in cost of goods sold and in revenue.

The root of the "nothing but losses" feeling: three layers of reality

Layer one: fragile profitability over many years

Kafpars has wrestled for years with a thin, and at times negative, profit margin. For example, in the fiscal year ending Azar 1397 (late 2018) earnings per share were reported at only about 3 rials, a figure that effectively means an absence of real profitability, and that year came with a sharp jump in financial expenses. The recurring pressures on profitability have been:

• Energy and furnace-maintenance costs: furnace repair and overhaul, spare parts, and packaging swallow a large share of cost of goods sold.
• Two-sided currency exposure: a rising exchange rate lifts the cost of importing parts, though it helps the export side.
• Financial expense: in some periods, a heavy rise in loan interest cost has neutralized operating profit.

Layer two: a large capital increase from asset revaluation

In 2019 (1398) the company obtained approval for a capital increase of roughly 1,519%, funded entirely from the surplus of asset revaluation (machinery, land, and buildings). The stated goal was to repair the financial structure within the bounds of the law.

This type of capital increase carries one key point for shareholders: no fresh money enters the company; only the book value of assets and the registered capital are updated. The price per share is then theoretically scaled down by the same proportion, and the shareholder receives "bonus shares" in return. In other words, the shareholder's holding stays constant at that instant, but the share count grows and the price per share shrinks. This is exactly what makes the "unadjusted" price chart misleading. It is the same mechanism we explained earlier in our coverage of large capital increases at Iranian issuers such as Telecommunication Company of Iran and Bank Mellat.

An analytical note: from a fundamental standpoint, revaluation is the weakest form of capital increase, because it does not change the company's intrinsic value or earning power and is mostly "balance-sheet cosmetics." Moreover, recording assets at current values raises depreciation expense in later years and can add further pressure on profit.

Layer three: a recurring cycle

The common pattern among companies that resort to revaluation is this: accumulated losses build up, the company uses revaluation to step back from the risk of Article 141 of the Commercial Code, but because the operational problem is unsolved, loss pressure returns after a few periods. For a long-term holder, the result of this cycle feels like "standing still": the stock is repeatedly halted and reopened, bonus shares arrive, but no real, sustained price growth takes shape.

So why does the chart show "ten years of losses," and how accurate is that?

Here two things must be separated:

• Unadjusted price: if you look only at the raw price number, the large capital increases may make you think the price has stayed "lower" or "stagnant." That view ignores the effect of bonus shares and dividends.
• Real shareholder return (adjusted): the correct return is the sum of the adjusted price change plus dividends received. Kafpars has held its annual general meetings in recent periods and has paid dividends (for example, a dividend payment in 2024 and an approved payment schedule for the fiscal year ending Azar 1404).

It is exactly this gap between the raw chart and the adjusted return that repeatedly creates an "illusion of decline"; we examined a fresh example of it in our analysis of the Karbon stock and the "price-adjustment illusion."

The neutral conclusion: whether a ten-year holder has truly experienced "nothing but losses" depends on two things: first, their entry point (whether they bought at a peak of enthusiasm or before loss-making periods), and second, whether they measure return on an adjusted basis including dividends or look only at the raw price number. But beyond the individual calculation, there is a structural reality too: over these years Kafpars has been a company with fragile profitability, and compared with stocks whose profit engines were strong, it has naturally lagged inflation and the broad market's rise. That relative lag is the main root of the frustration.

Where does it stand now?

• The current price is about 3,700 rials and market cap about 925 billion tomans.
• The stock's P/E (about 10.5) is slightly above the group average (about 9.7); the market still prices in an expectation beyond the industry mean, though the gap is not dramatic.
• The company publishes monthly sales reports regularly and has shown rial sales growth in recent months, part of which naturally comes from inflation and rising selling prices rather than necessarily a jump in production volume.
• The factors that will decide the future are the same as always: the exchange rate, steel and cement demand, energy costs, the furnace-overhaul schedule, and the allocated hard currency for importing raw materials.

You can follow the latest stock-market and other asset prices in Sahmino Prices.

A neutral summary (neither buy nor sell advice)

The Kafpars story is that of a real producer with an old weakness: fragile profitability against heavy costs and currency exposure. Part of the "ten years of losses" feeling comes from misreading the unadjusted chart and the non-cash capital increases; but the more important part reflects a fundamental reality that cannot be denied.

What to watch

For any decision, these questions are more useful than simply looking at the color of the chart:

1. Is operating profitability (setting aside revaluation) improving on a sustained basis?
2. What is the trend of the gross margin in the latest quarterly reports?
3. What is the company's plan to cut cost of goods sold and manage currency exposure?
4. Is sales growth "volume-based" or merely driven by price inflation?

The answers should be tracked in the latest financial statements and monthly activity reports on the Codal system. If concepts such as capital increase, revaluation, and the price-to-earnings ratio are new to you, the Sahmino Learn section is a good place to start.

Important note: this material is educational and informational only and is not a buy or sell recommendation. Responsibility for any investment decision rests with the investor. Figures are as of July 13, 2026 and are subject to change.