Rising Nonferrous Metals Share Co.Ltd(600259) (600259)
The company is the only legal rare earth mining entity in Guangdong Province. As the only listed company of Guangdong rare earth group, the company fully excavates and explores existing mines and accelerates the acquisition of other mineral resources inside and outside the province. At present, the company owns Pingyuan renju rare earth mine (Pingyuan huangshe rare earth mine has been merged) and Dapu Wufeng rare earth mine have their own rare earth mines with annual output of 75.5 tons and 55 tons respectively; in addition, Hongling tungsten mine and Shirenzhang tungsten mine have two tungsten concentrates with annual output of 128 tons and 12.8 tons respectively. In the first three quarters of 2021, the company seized the market opportunity, strengthened the organization of production and operation, and the performance increased rapidly. In the first three quarters, the company achieved total operating revenue RMB 11.15 billion was received, with a year-on-year increase of 70.93%; The net profit attributable to the parent company was 126 million yuan, a significant year-on-year increase of 3.06 times.
Under the escort of national policies, the supply of rare earth is standardized and orderly. The introduction of a series of national policies escorted the high-quality development of the rare earth industry. Black rare earth completely withdrew from the historical stage, and the supply side was highly concentrated in the six groups, further reflecting the national strategic position of the rare earth industry. As the upstream leader of medium heavy rare earth, one of the six major groups, the company mainly mines and smelts ion type medium heavy rare earth ore, and medium heavy rare earth is more scarce than light rare earth. The company’s allocation of ion type rare earth (heavy) mining index in 2021 is 2700 tons. In the future, the price of medium heavy rare earth is expected to further improve or promote the company’s performance.
Focus on the R & D of rare earth products and improve the layout of downstream industrial chain. In recent years, the demand for rare earth in new energy vehicles, wind turbines, industry Siasun Robot&Automation Co.Ltd(300024) and other fields has increased sharply, especially the demand for Nd-Fe-B magnetic materials. Seizing the market opportunity, the company actively developed Nd-Fe-B magnetic materials and established a wholly-owned subsidiary Guangdong Shengyuan magnetic materials Co., Ltd. on April 13, 2021, focusing on the R & D and production of high-end magnetic materials. The 8000t / a high-performance NdFeB permanent magnet material project proposed by the company has been approved by China Securities Regulatory Commission. At present, it has officially entered the bidding stage of phase I project, and is expected to become a new profit growth point of the company in the future.
Investment advice On the supply side, the national rare earth mining and smelting control is strict, while on the demand side, driven by the boom tracks such as downstream new energy, the supply and demand of rare earth may continue to be tight, and the price of rare earth products is expected to remain high. The company plans to raise additional funds to invest in the high-performance NdFeB permanent magnet material project, which is expected to contribute to the performance from 2023 to 2024, cover it for the first time, and give the company a cautious recommendation rating.
Risk statement Risk of restricted development of rare earth downstream industry; Rare earth price fluctuation risk; The company’s mine certificate is not handled in time, the approval procedures, environmental protection and safety and other factors may affect the company’s project process; Risk of unsuccessful project bidding; Natural and man-made disasters and other force majeure events.
