\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 111 China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) )
Event: the company released its 2021 annual report. In 2021, the operating revenue was 30.408 billion yuan, a year-on-year increase of 38.83%, of which 2021q4 operating revenue was 6.317 billion yuan, a year-on-year increase of 5.05% and a month on month increase of - 32.58%. In 2021, the net profit attributable to the parent company was RMB 5.130 billion, with a year-on-year increase of 462.32%, of which the net profit attributable to the parent company in 2021q4 was RMB 1.981 billion, with a year-on-year increase of 417.14% and a month on month increase of 77.95%. In 2021, the net profit not attributable to the parent company was deducted by 4.967 billion yuan, a year-on-year increase of 444.50%, of which the net profit not attributable to the parent company was deducted by 2.008 billion yuan in 2021q4, a year-on-year increase of 372.11% and a month on month increase of 94.62%.
Rare earth functional materials and rare earth raw materials contribute mainly to gross profit. In terms of gross profit composition, the gross profit of rare earth functional materials and rare earth raw materials was 4.317 billion yuan and 3.060 billion yuan respectively, with a year-on-year increase of + 190% and + 290.2%, accounting for 51% and 36.3% of the total gross profit respectively. (1) The gross profit margin of rare earth raw materials sector increased significantly, and rare earth metals contributed 3.371 billion yuan, accounting for 78.1% of the rare earth raw materials sector. (2) The gross profit of rare earth functional materials increased significantly to 3.069 billion yuan, accounting for 36.3% of the total gross profit, of which the gross profit of magnetic materials was 2.887 billion yuan, accounting for the largest proportion of rare earth functional materials.
The light rare earth quota of the company continues to increase, and the cost advantage of Baotou Iron and steel concentrate is obvious. (1) Among the first batch of total amount control indicators in 2022, the company's total quota of light rare earths was 60210 tons, with a year-on-year increase of 16080 tons, and the proportion of light rare earths increased by 6.56 PCT to 67.42% year-on-year. (2) In 2022, the price of rare earth concentrate purchased by the company increased, which was lower than the price increase of rare earth oxide and other products. The cost advantage remained, and the profit of the company continued to increase. According to the company's announcement, the total amount of this daily related party transaction in 2022 is expected to not exceed RMB 7 billion (including tax). From the perspective of concentrate transaction volume, the year-on-year increase may be about 30.7%. (3) In 2021, the company increased its capital to acquire Huaxing rare earth and held 50.5% of its equity. The company continued to improve the production capacity of rare earth oxides and metals to provide raw material guarantee for the industrial chain.
The company's listing price continued to rise and stabilized at a high level. The listing price of light rare earth products in April 2022 was the same as that in March, including 816000 yuan / ton of praseodymium and neodymium oxide and 994500 yuan / ton of metal praseodymium and neodymium. So far, the listing price has remained unchanged for three consecutive months. Recently, due to the influence of the industrial chain game discussed in the supply guarantee agreement of the Ministry of industry and information technology, the price of rare earth oxide has been corrected due to the impact of the epidemic in early April. According to SMM, the mainstream transaction price of praseodymium neodymium oxide Market is weakly stable at RMB 8 China High-Speed Railway Technology Co.Ltd(000008) 15000 / ton, and the mainstream quotation of praseodymium neodymium metal market is stable at RMB 11030000 / ton. Due to the large proportion of light rare earth smelting and separation products of the company, the listing price may form a certain support for the market price. Due to the orderly overall supply of rare earth, After the impact of the epidemic weakened, with the increase of the operating rate and procurement of downstream magnetic material enterprises, the price of rare earth is expected to remain high.
The company has orderly implemented joint venture cooperation and key project construction, and strengthened and expanded rare earth functional materials.
In 2021, the company and the listed company Advanced Technology & Materials Co.Ltd(000969) jointly built a high-end magnet project to enrich the magnet product structure and seize the high-end market; Complete the capital and share increase of three companies, namely, magnetic materials company, Anhui permanent magnet and Xibao Fangyuan, to help the subsidiaries expand their business scale and enhance their competitiveness. At the same time, combined with the market channels of Huaxing rare earth lanthanum cerium products held during the reporting period, the company can supplement the types of small batch and customized lanthanum cerium products, build the application platform of the company's rare earth lanthanum cerium products, consolidate and improve the market share of the company's rare earth products, and then improve the profitability of the company.
Investment suggestion: we expect the company to achieve operating revenue of 41.015 billion yuan, 47.085 billion yuan and 54.255 billion yuan respectively from 2022 to 2024, and net profit of 8.902 billion yuan, 10.645 billion yuan and 12.545 billion yuan respectively, with corresponding EPS of 2.45 yuan, 2.93 yuan and 3.45 yuan / share respectively. At present, the corresponding share price of PE is 14.2, 11.8 and 10.1 times. For the first time, it is rated as "overweight-a", and the six-month target price is 45 yuan / share.
Risk tip: the demand is less than expected, the rare earth price fluctuates sharply, and the project progress is less than expected
