Diversified raw material guarantee channels and the layout of the whole industry chain: Shenghe Resources was established in 2001, mainly engaged in rare earth ore mining, smelting separation, metal processing and zirconium-titanium mineral processing business. The company's main products include rare earth concentrate, rare earth oxide, rare earth salt, rare earth metal, monazite, zircon sand, titanium concentrate, rutile and so on. At present, the company's rare earth business has formed a relatively complete industrial chain from mining, smelting separation to deep processing, realizing the dual layout at home and abroad. Through the trusteeship of domestic and overseas rare earth mines and equity participation in a number of enterprises, the company has built a diversified supply channel of rare earth concentrate, which effectively ensures the company's rare earth supply. At the same time, the company has a complete industrial chain layout from rare earth mining to metal smelting separation and processing, with continuous improvement in technology to provide support for the company to create a solid corporate moat.
Rare earth waste recycling plate: technological transformation in-depth promotion, production capacity continues to improve. The company vigorously expands the business of rare earth waste recycling, implements the technical transformation and upgrading of rare earth waste recycling projects, speeds up the construction of new projects, strives to expand the supply channels of rare earth waste, increases the comprehensive recovery and utilization of rare earth resources, and develops circular economy. The industrial chain of circular economy will achieve a comprehensive recovery and utilization capacity of 10000 tons / year in the future.
Profit forecast and rating: we expect the company's EPS from 2023 to 2025 to be 0.80,1.02,1.08 yuan respectively. Based on the 2023 EPS of Shenghe Resources, with reference to the comparable company valuation level, the 2023 PE is valued at 22 times, with a target price of 17.6 yuan, with a "better than the city" rating for the first time.
Risk Tip: the company's capacity release is not as expected and downstream demand is not as expected.