SHHZ's six-month operating cash covered 2.6% of profit versus 89.5% on a restated trailing year; Sahmino's invalidation is 3,080 rials (November 1, 2026)

SHHZ, a packaged sauce and tomato-paste producer on Iran's Farabourse, earned 4,629 billion rials in standalone net profit in the unaudited six months ended September 22, 2026, against 1,535 billion rials a year earlier. Yet its operating cash flow was only 121 billion rials, or 2.6% of profit. On Sunday, November 1, its shares faced a buy queue at 3,210 rials, with a closing price of 3,190 rials while the Farabourse main index fell 1.4%. Does the cash gap challenge Sahmino's buy target? The trailing 12-month calculation helps answer that, but it depends on which version of the previous fiscal year is used.

Background

SHHZ's standalone interim statement, Codal tracing number 1610767, was published October 15. Six-month operating revenue was 15,187 billion rials versus 6,892 billion rials a year earlier. Gross profit was 4,699 versus 1,879 billion rials and operating profit 4,201 versus 1,580 billion rials, so gross margin rose from 27.3% to 30.9%. Earnings per share were 414 rials against 137. Other net non-operating income was 528 billion rials against 16 billion, about 11% of pre-tax profit; the summary statement does not explain its composition.

The August 27, 2026 general meeting approved a dividend of 30 rials per share for fiscal 1404, about 10.3% of that year's earnings and under 1% of the November 1 price (Codal letter 1593334). The case here is profit growth and whether it turns into cash, not last year's dividend.

Figures in focus

• Standalone net profit, six months ended September 22, 2026: 4,629 billion rials versus 1,535 billion a year earlier, up 202% (letter 1610767).
• Operating cash flow in those periods: 121 billion versus 2,722 billion rials. In the filing's scale, 121,286 divided by 4,628,950 million rials is 2.62%, our calculation from the same statement.
• Balance sheet, September 22, 2026 versus March 20, 2026, billion rials: trade and other receivables 12,159 versus 6,476; inventory 2,766 versus 1,252; cash 241 versus 493; trade and other payables 4,850 versus 2,595.
• Current ratio 2.72; short-term debt 359 billion rials, about 1.8% of equity of 19,779 billion rials.
• Exchange-based P/E 5.59 on trailing EPS of 571 rials, against a sector average of 6.74, on the 3,190-rial close read at 17:34 on November 1 (it may be revised until about 22:00). SHHZ's multiple is about 17% below the sector figure, measured against the sector.
• The original audited fiscal 1404 statement (tracing number 1581744) printed operating cash of 6,231 billion rials and net profit of 3,261 billion. The restated comparatives in the new interim filing show 8,316 and 3,290 billion rials. The two versions are not interchanged here.
• Price: close 3,190 rials, 2.2% above 3,120 rials on October 31; last trade 3,210 rials at the band ceiling (a last trade, not the close). The 52-week traded high is 3,335 rials on October 27, putting the close 4.4% below it; the 52-week traded low is 1,348 rials on February 24, 2026.

Drivers

Price has outrun units. The corrected September activity filing, tracing number 1611754, shows 3,525 units of packaged sauce sold in the six months versus 4,083 a year earlier, down 13.7%, while sauce sales value rose to 12,014 billion from 3,562 billion rials. The reported selling rate per unit was about 3.9 times its prior-year level. Packaged paste units fell from 4,489 to 2,105 and its sales value from 3,286 to 3,047 billion rials. Total domestic units fell from 9,289 to 6,612 while domestic sales value more than doubled. Gross domestic sales of 15,305 billion rials, less 117 billion rials of returns, reconcile with revenue of 15,187 billion rials. These are reported relationships; the filings do not state the cause of the rate change. September sales were 2,760 billion rials, 11% above the prior five-month average of 2,485 billion rials.

The cash gap is its own test. Receivables rose 5,683 billion rials from March 20 to September 22, 2026, or 1.23 times six-month net profit; payables rose 2,255 billion rials. Capital spending was 228 billion rials against 2,528 billion rials a year earlier, so low operating cash is not simply investment. Rising receivables are one plausible accounting explanation, but the statement does not say which customers paid late or when collection will occur. A 2.72 current ratio and 359 billion rials of short-term debt also mean a weak cash half is not, by itself, evidence of inability to pay.

The trailing year depends on the prior-year version. The restated fiscal 1404 column in the new filing shows operating cash of 8,316 billion rials for the year and 2,722 billion for its first half, so the second half was 5,594 billion rials. Add the 121 billion rials of the first half of 1405 and the 12 months to September 22, 2026 reach 5,716 billion rials. Profit on the same basis is 3,290 less 1,535 plus 4,629, or 6,384 billion rials: 89.5% cash conversion, matching the 89.53% on Sahmino's overnight screener. Using the original audited 1404 figures, the same arithmetic gives about 57%. The restatement creates the gap; neither version changes the current six months, which remain at 2.6%. The 1403 audit showed 374 billion rials of operating cash against 2,332 billion rials of profit, 16%, so collection has been uneven.

A queue is not a retail reversal. At the November 1, 17:34 reading, SHHZ traded 224.5 million shares, 2.3 times its 20-session average of 98.1 million, and about 21 million shares remained bid at the 3,210-rial ceiling. Retail net-bought only about 1.4 million shares, with buyer strength of 0.94. In the three sessions of October 27, 28 and 31, retail net-sold about 517 billion rials while institutions bought 207 million shares and sold 46 million, a net 161 million or 1.4% of capital. Retail net selling over the 20 sessions to October 31 was about 667 billion rials. The Farabourse main index, SHHZ's own exchange, was at 65,210 at 17:33, down 1.4% from Saturday; the Tehran Stock Exchange main index fell 2.4%, a separate market. The queue stands out against that backdrop but does not prove durable retail buying.

Sahmino's dated reading. For the October 31, 2026 session the desk has a buy stance with a 3,120-rial reference, a 3,396.66-rial target, 3,079.68-rial invalidation and a 15-session horizon, in a "falling, volatile" regime. Eight of 16 calls in the matching sample reached their targets, a small sample. The October 27 flow-turn signal has a 65.55% lower bound for reaching target against 52.28% for a random entry in that regime, and an entry ceiling of 3,343.83 rials; its reward-to-risk from 3,210 rials is 1.43. Of the desk's 2,700 settled stances, 1,244 reached target, 1,270 were invalidated and 186 expired. In September the desk logged four avoid stances on this same share, and all four were invalidated as its price rose. The levels are testable, not guaranteed.

Outlook

There are two horizons. Within the desk's 15 sessions, a close below 3,080 rials invalidates the buy stance, and the path to target passes the 3,335-rial high of October 27. The 3,190-rial close read on November 1 is 6.1% below the target (measured against the target) and 3.6% above invalidation (measured against invalidation). Over the longer term, the nine-month accounts to December 21, 2026 will show whether receivables of 12,159 billion rials turned into operating cash; that is not a settled condition for the short-term target. Monthly reports for Mehr and Aban will also test sales against 2,485 billion rials a month. The six-month figures are unaudited.

Conclusion

SHHZ's six-month profit is large, but only 2.6% of it became operating cash in the same period; the trailing 12-month conversion is 89.5% on the restated prior-year column and about 57% on the original filing. Sahmino's reading from the October 31 desk stance: SHHZ reaches 3,397 rials in 15 sessions. Condition: entry up to 3,344 rials; cash collection remains untested. Horizon: 15 sessions from October 31. Invalidation: a close below 3,080 rials. Levels are the calculated figures rounded to whole rials.

What to follow

• Daily close, volume and retail and institutional flow against 3,080 and 3,344 rials on SHHZ's Sahmino page.
• Receivables and operating cash flow in the nine-month report, compared with September 22.

Run this filter in Sahmino's screener: net profit growth above 100%, P/E below the sector average and trailing operating cash at least 50% of profit. Its November 1 overnight reading found 76 of 2,140 equity instruments meeting all three, including SHHZ; without the cash test, 197 remain. The count covers only instruments for which all three readings exist, and the cash test is trailing, so it does not show the six-month gap.

Related: the interim filing news item and an earlier retail-flow and desk-call comparison.