公司23 Q1-3 单季度归母净利润分别为9.22/1.34/3.24 亿元，同比下降40.83%/91.46%/78.43%；以业绩预告中值计算，公司23 Q4 预计实现归母净利润8.7 亿元，同比下降35.7%。2023 年以镨钕产品为代表的主要稀土产品价格持续震荡下行，全年均价同比降低致公司业绩承压。根据中国稀土行业协会，2023 年氧化镨钕年度均价53.06 万元/吨，同比下降35.74%。Incidents:
The company released its 2023 performance forecast. In 2023, it is expected to achieve net profit of 2.17 billion yuan to 2.33 billion yuan, a year-on-year decrease of 61.00%-63.67%; net profit without deduction of 2.04 billion yuan to 2.20 billion yuan, a year-on-year decrease of 64.50%-67.10%.
The decline in rare earth prices in 23 years has put pressure on the company's performance in the short term
The company's net profit for the single quarter of 23 Q1-3 was 922/134/324 million yuan, down 40.83%/91.46%/78.43% year on year; based on the median performance forecast, the company expected to achieve net profit of 870 million yuan for 23 Q4, a year-on-year decrease of 35.7%. Prices of major rare earth products represented by praseodymium products continued to fluctuate and decline in 2023, and the year-on-year decline in average prices throughout the year put pressure on the company's performance. According to the China Rare Earth Industry Association, the average annual price of praseodymium oxide in 2023 was 530,600 yuan/ton, a year-on-year decrease of 35.74%.
The construction of key projects such as green smelting upgrades has been accelerated, and the scale of production capacity is expected to be further expanded. The company's rare earth mining/smelting and separation indicators in 2023 were 16.67/152,200 tons, respectively, accounting for 69.44%/66.19% of the total national target; the company increased its capacity utilization rate, and the output of major products reached a new high.
According to the company's announcement, the first phase of the company's green smelting upgrade project is scheduled to be put into operation in 2024 Q4; the Jinmeng rare earth rare earth concentrate smelting and separation line automation upgrade project with an annual output of 3,000 tons is expected to be put into operation in 2024 Q2; the company's production capacity is expected to expand further.
With the optimization of the industry's supply and demand pattern in 24, rare earth prices are expected to bottom out and rise. Recently, the Ministry of Industry and Information Technology issued the first batch of rare earth mining and smelting and separation total control indicators for 2024, which were 135/127,000 tons, respectively, up 12.5%/10.4% year on year. The year-on-year growth rate of the first batch of rare earth mining indicators in 22-23 was 20%/19%, respectively, and the year-on-year growth rate of the first batch of smelting and separation indicators was 20%/18%, respectively; the growth rate of the first batch of rare earth mining and smelting indicators in '24 was lower than in previous years. Against the backdrop of slow growth on the supply side of rare earths in '24 and maintaining relatively rapid growth on the demand side, the rare earth industry's supply and demand pattern is expected to be optimized, driving rare earth prices to bottom up.
Profit forecasting and investment advice
The company has outstanding resource advantages on the rare earth raw material side, and the procurement of rare earth concentrates at an agreed price is expected to bring performance flexibility to the company. We expect the company's 2023-2025 net profit to be 22.02/28.50/3.406 billion yuan, and EPS of 0.61/0.79/0.94 yuan, respectively. Referring to comparable company estimates, we gave Northern Rare Earths 30 times PE in 2024, with a target price of 23.65 yuan; maintaining a “buy” rating.
Risk warning: risk of large fluctuations in rare earth prices; risk of industrial policy changes; risk of safety and environmental protection; risk of supply chain.
