The contradiction between supply and demand continued to be prominent, and China’s rare earth price index hit a new high since its release. According to the data of China Rare Earth Industry Association, on February 15, China’s rare earth price index was 426.8, a record high, up 24.78% from the beginning of this year. In addition, according to the data of Shanghai Nonferrous Metals network, on February 15, the quotation per ton of praseodymium and neodymium oxide in light rare earths exceeded the million mark, reaching 1.1 million yuan / ton, an increase of more than 10% compared with the price of 99000 yuan / ton before the Spring Festival, and only 13.7% less than the historical high of 1275000 yuan / ton in 2011.
It can be seen that the rising price of rare earth products has prompted the performance of listed companies to be generally good. According to Hithink Royalflush Information Network Co.Ltd(300033) data, up to now, 29 listed companies in the rare earth permanent magnet industry have disclosed the annual performance forecast of 2021, and 23 companies are expected to have good performance, accounting for nearly 80%. Among them, 14 companies including Inner Mongolia Baotou Steel Union Co.Ltd(600010) , Aluminum Corporation Of China Limited(601600) , China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) , Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) are expected to double the annual net profit in 2021.
In this regard, Chen Li, chief economist of Chuancai securities and director of the Research Institute, said in an interview with Securities Daily, “The recent rise of rare earth permanent magnet sector is good, which is mainly due to the changes in the supply and demand level of rare earth industry. With the recent release of the first batch of total control indicators for rare earth mining, smelting and separation in 2022 by the Ministry of industry and information technology , China’s rare earth supply elasticity is decreasing, and the supply pattern is gradually becoming orderly and highly centralized, as well as the global supply is gradually stabilizing. In terms of demand, under the background of global low-carbon and electrification, new energy vehicles, energy efficiency improvement of industrial motors, wind power, Siasun Robot&Automation Co.Ltd(300024) have replaced the past consumer electronics and become the main driving factor of the demand for rare earth permanent magnets, and the magnitude of demand has increased greatly. At present, restricted by resource conditions, the increase of rare earth supply mainly comes from light rare earth, China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) will continue to fully benefit from the simultaneous rise of volume and price in the industry. In the context of the accelerated expansion of the demand for rare earth magnetic materials, the leaders of high-performance magnetic materials enterprises are relying on high-tech barriers to enhance the bargaining power of the downstream, and the moat is gradually deepening. “
Zhao Yuanyuan, investment director of Jianhong times, told reporters about the rise in rare earth prices, “The prices of various rare earth varieties have increased by 13% – 32% in the past month, among which praseodymium neodymium oxide is as high as 20%. On the one hand, in terms of demand, new energy vehicles still maintain a high growth rate, wind power has developed rapidly under the planning of phase I and phase II large bases, and has become a bright spot in the growth of rare earth demand. Industrial motors have also gradually recovered under the background of improving manufacturing profits and starting to expand production; on the other hand On the one hand, the supply of rare earths is seriously restricted. The production index issued before the Spring Festival increased by only 20%, resulting in tight supply and demand. Rare earth has the dual attributes of cycle and growth, and is expected to obtain a valuation premium under the environment of fiscal and monetary double loose. “
\u3000\u3000 “Benefiting from the steady growth in the sales of new energy vehicles and electronics, the supply and demand of rare earth permanent magnet has been in a tight balance, driving the continuous rise of the price of rare earth permanent magnet. In the future, driven by the continuous promotion of the policy of” carbon neutralization and carbon peak “, the willingness to rush to install wind power is strong, the sales proportion of new energy vehicles is increasing year by year, and the efficiency of industrial motors urgently needs to be improved. Therefore, rare earth permanent magnet will continue to benefit Driven by the rapid development of new energy vehicles, wind power generation and industrial motor industry, the demand is expected to usher in explosive growth. “
Boosted by multiple positive factors, the rare earth permanent magnet sector performed prominently on February 16, with an overall rise of 2.69%, outperforming the Shanghai Composite Index (0.57%), ranking at the top of the increase list of Hithink Royalflush Information Network Co.Ltd(300033) sector. Among them, Shanxi Huayang New Materialco.Ltd(600281) rose by the limit, Innuovo Technology Co.Ltd(000795) also rose by 8.38%, and four concept stocks such as Earth-Panda Advanced Magnetic Material Co.Ltd(688077) , Yantai Zhenghai Magnetic Material Co.Ltd(300224) , Tdg Holding Co.Ltd(600330) , China Minmetals Rare Earth Co.Ltd(000831) also rose by more than 5%.
Good stock price performance is inseparable from the support of market funds. On February 16, the overall net capital inflow of rare earth permanent magnet sector was 971 million yuan, of which four concept stocks such as China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) , Inner Mongolia Baotou Steel Union Co.Ltd(600010) , Innuovo Technology Co.Ltd(000795) , China Minmetals Rare Earth Co.Ltd(000831) were sought after by large single funds of more than 100 million yuan on that day. The net capital inflow of large single funds were 432 million yuan, 227 million yuan, 156 million yuan, 154 million yuan, Jl Mag Rare-Earth Co.Ltd(300748) , Ningbo Yunsheng Co.Ltd(600366) , Tdg Holding Co.Ltd(600330) , Hongda Xingye Co.Ltd(002002) Shanxi Huayang New Materialco.Ltd(600281) are also subject to the distribution of large single funds of more than 20 million yuan, and these nine concept stocks have attracted a total of 1.166 billion yuan.
For the investment opportunities in this sector, Chen Li said, “At present, there is an obvious dual trend of rare earth resources in China, China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) Focus on light rare earths and China rare earth group focus on medium and heavy rare earths. In view of the increasing supply of overseas resources, China’s supply has become the main guarantee for new global demand. With the formation of more centralized and orderly supply management in the future, the price of rare earth is expected to continue to rise, and the growth attribute of rare earth sector exceeds the cyclical attribute. “
Huabao Securities said that after the Spring Festival, there was strong demand in terminal areas such as wind turbines and new energy vehicles, and orders increased. The rare earth sector is expected to continue to strengthen, and it is suggested to focus on industry leading companies.
Table: rare earth permanent magnet concept stocks sought after by large single funds of more than 10 million yuan on February 16
prepared by Ren Shibi
