Recently, the northern rare earths released the 2020 results report. In 2020, the company achieved a combined operating income of 21.246 billion yuan, an increase of 17.43% over the same period last year, a record high, and a net profit of 833 million yuan belonging to shareholders of listed companies, an increase of 35.10% over the same period last year.
I. description of the main business, business model and business situation of the company during the reporting period
According to the industry classification of national economy and the industry classification of China Securities Regulatory Commission, the company belongs to the major category of non-ferrous metal smelting and Calendering processing industry under the manufacturing category, and belongs to the subcategory of rare earth metal smelting and Calendering processing industry. During the reporting period, there was no significant change in the company's main business and business model.
(1) main business The company is the largest supplier of light rare earth products in China and the world, and is one of the six largest rare earth groups in China's rare earth industry. The company mainly produces and manages rare earth raw material products, rare earth functional material products and some rare earth terminal application products. Among them, rare earth raw material products include rare earth salts, rare earth oxides and rare earth metals, which are the main raw materials for downstream rare earth functional materials and new material production and processing enterprises. The products of rare earth functional materials include rare earth magnetic materials, polishing materials, hydrogen storage materials, luminescent materials and catalytic materials, which are mainly used in the production of application products in their industrial fields. such as magnets, polishing powder (liquid), Ni-MH battery, phosphor, catalyst, etc.; rare earth terminal application products include Ni-MH power battery, rare earth permanent magnet magnetic resonance instrument, rare earth permanent magnet motor.
(2) Business model Relying on the advantage of Bayan Obo rare earth resources controlled by the controlling shareholder Baogang (Group) Company, the company purchases the rare earth concentrate produced by its holding subsidiary Baotou Iron and Steel Co., under the guidance of the national total quantity control plan for rare earth production, entrusts the company to hold and participate in the company to process the rare earth concentrate into mixed rare earth carbonate. Then the company directly under, holding and participating companies will separate the mixed rare earth carbonate into single or mixed rare earth salts, rare earth oxides and rare earth metal products. The company uniformly acquires and sells the above rare earth smelting separation products, and at the same time gives full play to the role of its subordinate international trade company to increase income and create efficiency in diversified trade business dominated by rare earth trade and supplemented by non-rare earth trade.
In order to increase the added value of rare earth products, promote the balanced utilization of rare earth elements, and promote the development of the rare earth industry to the downstream high-end and high value-added fields, the company gives full play to the advantages of rare earth resources and uses capital as a link to develop the rare earth functional materials industry through sole proprietorship, joint venture, merger and reorganization, and constantly improve the industrial scale, development quality and value creation ability. Five rare earth functional materials industry plates have been formed: magnetic materials, polishing materials, hydrogen storage materials, luminescent materials and catalytic materials. According to the company's strategic plan, enterprises in various sectors develop, produce and sell rare earth functional materials products in their respective industrial fields by purchasing and processing rare earth raw materials. At the same time, combined with the characteristics of resources and industrial layout, the company has selectively developed rare earth terminal application products, and has formed the rare earth terminal application layout of hydrogen storage material-Ni-MH power battery, magnetic material-rare earth permanent magnet magnetic resonance instrument and rare earth permanent magnet motor.
The company takes the subordinate rare earth research institute as the core, gives full play to the talent, technology and innovation advantages of various scientific research platforms, provides technical support for industrial operation and development, and constantly improves the technical level and R & D capability of the industrial chain. promote the integrated development of production, learning, research and use. By persisting in overall planning, reform and innovation, coordinated operation and comprehensive policies in the aspects of raw material guarantee, production convergence, cost control, marketing operation, scientific research support, management coordination, benchmarking and upgrading, capital operation, cultural integration, and institutional mechanism innovation, the company will enhance the coordination and value-added efficiency of the integrated development of the upstream and downstream of the industry, and the development of industrial integration will lead to the optimization of production lines, process innovation and quality improvement. Promote the high-quality development of the company.
(3) Industry situation
During the reporting period, under the influence of COVID-19 's epidemic situation, the rare earth market fluctuated greatly at the beginning of the year, the downstream demand was depressed, the prices of all kinds of products fluctuated, the trend of light and heavy rare earths was obviously divided, and the production and operation pressure of upstream and downstream enterprises in the In the face of the severe test brought about by the epidemic and the complex and ever-changing environment at home and abroad, the state has comprehensively and thoroughly investigated the impact of the epidemic, formulated supporting policies to reduce production costs, increase assistance, ensure the supply of raw materials, and solve financing needs, and do everything possible to help upstream and downstream enterprises in the industry return to work and return to production to alleviate the difficult situation. With the effective control of the domestic epidemic since the second quarter, enterprises in various links of the rare earth industry have overcome difficulties, strengthened self-discipline in production and management, and regarded winning the war of prevention and control of the epidemic as a major political task. implement the policies and measures to promote the resumption of work and production in the upstream and downstream enterprises of the industry during the epidemic, adhere to the general tone of seeking progress in the midst of stability, adhere to the new concept of development, and adhere to the structural reform on the supply side. Adhere to the Synchronize promotion of epidemic prevention, control and industrial development, pay close attention to the requirements of high-quality development, grasp "six stability" and promote "six guarantees", strive to overcome the adverse impact of the epidemic on industrial development, and strive to minimize the losses caused by the impact of the epidemic. The production, operation and profitability of enterprises have gradually returned to the level of the same period, and the overall operation of the industry has made hard-won development achievements, demonstrating the responsibility and responsibility of the rare earth industry.
Over the past year, the rare earth industry has comprehensively promoted epidemic prevention and control and high-quality development, thoroughly implemented the spirit of General Secretary Xi Jinping's important instructions on the development of the rare earth industry, actively promoted the accumulation of innovative resources in the industry, and established the Ganjiang Innovation Institute of the Chinese Academy of Sciences. We will set up a national innovation center for rare earth functional materials, build a new platform for scientific research and innovation, and speed up the R & D and achievement transformation of new rare earth materials and high-end application products. We will constantly enhance the ability of industrial innovation to support the construction of a manufacturing power. The total amount control index of rare earth mining will be increased in an orderly manner to meet the needs of enterprises and the market. We will improve the construction of the standard system of the rare earth industry and promote the safe, green and high-quality development of the industry. The new resource tax law has been formally implemented to rationally adjust the resource tax rate and promote industrial development. Under the national policy support and orderly governance, the operation quality of industry enterprises has improved steadily, structural adjustment and transformation and upgrading have been promoted steadily, and a good development trend has been maintained. Other information about the rare earth industry can be found in other chapters of this report.
Core competence during the reporting period
(1) Resource advantages Baogang (Group), the controlling shareholder of the company, has the exclusive mining right of Bayan Obo Mine, the largest rare earth mine in the world, and the exclusive right of rare earth products in Inner Mongolia. The controlling shareholders take the company as the platform to develop the rare earth industry, develop and utilize rare earth resources, and turn their resource advantages into the industrial development advantages of listed companies, which lays the foundation for the development of the company. Baotou Steel, a subsidiary of the controlling shareholder, exclusively supplies rare earth concentrate to the company, which provides raw material guarantee for the company's production and operation. In recent years, in the index distribution of the national rare earth mining and production total control plan, the index distribution of mineral products and smelting separated products obtained by the company respectively accounts for about 50% of the total annual indexes. the sustained and stable index acquisition strengthens the company's resource advantage and industrial competitiveness, highlighting the company's industry status and development potential.
(2) the whole industry chain and the advantage of scale The company is the first state-controlled rare earth enterprise to be established and developed in China. After years of development, the company has taken the lead in developing into a group listed company integrating rare earth smelting separation, functional materials, applied products, scientific research and trade, forming an industrial structure based on rare earth resources, smelting separation as the core, new materials construction as the focus and terminal application as the expansion direction, and relying on innovation-driven development strategy to continuously promote industrial structure adjustment and transformation and upgrading. Realize the integrated development of the upstream, middle and lower reaches of rare earths, and build a leading competitive advantage of the whole industry chain.
By the end of the reporting period, the company had 48 direct subordinate, holding and shareholding enterprises with clear division of labor, advantages and characteristics, and its asset scale and industrial territory were gradually optimized and stable, becoming the world's largest rare earth enterprise group and rare earth industrial base. It is one of the six major rare earth groups in China, and has an important influence in China's rare earth industry.
(3) advantages of scientific research and technology Through the development and utilization of Bayan Obo rare earth resources, the company has established a scientific research system with distinct layers, outstanding expertise and meeting the development needs of the company, and thus accumulates and reserves the company's abundant rare earth scientific research, technology, talents and other software and hardware resources. The rare Earth Research Institute under the company is the largest rare earth professional scientific research institute in the world, and its scientific research platforms, such as various national and autonomous district-level key technology centers, key laboratories, pilot test bases, academician workstations, etc., have leading advantages and collaborative scientific research competitiveness in the frontier fields of rare earth foundation, new product development, popularization and application of new technologies, detection and analysis, information collection and application at home and abroad. The technology (R & D) center established by the company's sub-enterprises serves the needs of the company's grass-roots production and market, and is the basic carrier of the company's scientific and technological research and development and technological innovation. The collaborative scientific research system with the rare earth research institute as the core and the subsidiary R & D platform as the supplement consolidates and strengthens the company's scientific research and technological advantages.
(IV) Policy and location advantages
The state has always attached great importance to the development, utilization and protection of rare earth resources. As a leading enterprise in the rare earth industry, the company has received much attention and support from the state in implementing the national total quantity control plan, promoting supply-side structural reform, transforming and eliminating backward production capacity, enhancing the ability of independent innovation, strengthening environmental governance and green low-carbon development, extending the industrial chain, optimizing the industrial structure and promoting transformation and upgrading. Inner Mongolia Autonomous region and Baotou City have issued policies and overall planning to support the development of strategic emerging industries such as new rare earth materials in all directions, and actively promote the integration, reorganization, transformation and upgrading of rare earth enterprises in the region. guide the rare earth industry to develop into high-end and high value-added areas, and at the same time vigorously improve the business environment and create a good business environment for the development of enterprises. A good policy environment gives the company policy advantages. Relying on the rich mineral resources of Bayan Obo, Baotou City, where the company resides, has formed a number of rare earth functional materials and rare earth application products enterprises involving a wide range of fields and certain competitiveness after years of construction and development. it has made a series of major breakthroughs in rare earth mineral processing, smelting, separation, new materials and applications, and has become an important base for rare earth research and development, production, processing and application in China. With the continuous improvement of the business environment in Baotou City, the increasing efforts to attract investment and investment, the continuous improvement of the agglomeration and scale of the rare earth industry, the leading enterprises in the industry and well-known rare earth enterprises at home and abroad have invested in and set up factories one after another, and the cluster effect has gradually appeared. The company is not only close to Bayan Obo rare earth mineral resources, but also located in China's only national high-tech industrial development zone named after "rare earth" and Baotou National rare Earth High-tech Industrial Development Zone, China's rare earth industry "Silicon Valley". The enterprises of the rare earth industry chain in the region are clustered around the industrial layout, and new materials, new energy and other high-tech enterprises are developing vigorously, especially with the introduction of policies such as the development plan of the rare earth industry in the state, autonomous region and Baotou City one after another. the number of rare earth new materials and downstream application enterprises has increased significantly, the output value scale is increasing day by day, and the industrial supporting facilities are becoming closer and closer. For the company to create a good regional environment and external development conditions, obvious location advantages.
Discussion and analysis of business situation
I. discussion and analysis of business situation
In 2020, the sudden COVID-19 epidemic broke out and spread all over the world. Under the impact of the epidemic, the world economy is in deep recession and continues to develop and evolve, and China has become the only major economy in the world to achieve positive economic growth. The state continues to standardize the production and operation order of the rare earth industry, vigorously improve the business environment, strengthen environmental protection verification and rare earth special verification, deepen supply-side structural reform, promote the transformation and upgrading of the industry, and promote the extension and development of the industry to downstream high-value utilization fields. we will take various measures to stabilize the production and operation of the industry, and promote the profitability of enterprises. Affected by market supply and demand and the epidemic situation, the prices of light and medium-heavy rare earths continued the trend of structural differentiation during the year, among which the prices of lanthanum and cerium products continued to decline, while the prices of praseodymium and neodymium products rose steadily; the prices of medium and heavy rare earth products fluctuated upward.
In the face of the severe test and complex external situation brought about by the epidemic, the company follows the 13th five-year Plan, adheres to the general tone of the work of striving for progress in the midst of stability, adheres to the new concept of development, adheres to the supply-side structural reform, persists in the overall planning of epidemic prevention and control and the promotion of Synchronize production and operation, closely adheres to the requirements of high-quality development, around the task goal of production and operation for the whole year, deepens the "four declines and two proposals", and does a good job in the work of "six stability" and "six Efforts have been made to overcome the adverse effects of the epidemic on raw material supply, logistics and transportation, and marketing, and have achieved hard-won business results by stabilizing production, strengthening management, grasping reform, seeking innovation, promoting transformation and improving quality. The company achieved business income of 21.246 billion yuan in the reporting period, an increase of 17.43% over the same period last year. The net profit attributed to the shareholders of listed companies was 833 million yuan, an increase of 35.10% over the same period last year, and the performance remained at the forefront of the industry.
Reviewing the main work and achievements of the company in the past year, it is mainly reflected in:
(1) to promote epidemic prevention and control and production and operation as a whole, and to achieve both production and marketing growth with a good operational situation.
The company fully implements the deployment of epidemic prevention and control, establishes an efficient prevention and control system, formulates prevention and control plans, takes multiple measures, scientific prevention and control, and precise policies. The company's enterprises have "zero infection" and effectively protect the life, health and safety of the staff and workers.
According to the total rare earth quantity control plan, the resources of production factors are planned as a whole, the linkage production organization is strengthened, and the production capacity is released throughout the line. The output of rare earth smelting and separation products, rare earth functional materials and applied products is growing against the same trend as the same period last year, and the output of some products has reached an all-time high. We will further promote the "four declines and two mention" project, optimize and improve indicators such as financial expenses, manufacturing costs, logistics costs, and labor costs, clean up and activate inefficient and inefficient assets, and reduce the level of enterprises. Strengthen market research and judgment, take more measures and do a good job in main business marketing at the same time. Strive to reduce the inventory of lanthanum and cerium products, subdivide the downstream application market, achieve sales breakthroughs in metal processing, soft magnetic and other industries, and strive to achieve a balance between production and marketing; increase external procurement of praseodymium-neodymium products, enhance praseodymium-neodymium resource control and market say, market share continues to increase; sales and income of functional materials products grow better than the same period last year. Close to the copper, aluminum, zinc industry chain upstream and downstream entity enterprises, continue to expand non-ferrous metals trade, non-rare earth trade to increase income, adhere to marketing and trade-driven income growth. Strengthen safety management, strengthen safety supervision and inspection, no serious injury or above safety accidents occurred throughout the year. Adhere to the bottom line of the red line of environmental protection, promote green production, actively carry out the comprehensive utilization of the "three wastes" resources, strictly implement the sewage discharge permit system, implement environmental protection treatment projects in an orderly manner, vigorously implement the technical transformation project for the comprehensive treatment of the "three wastes", and rapidly promote key projects such as VOCs treatment and ammonium sulfate wastewater treatment.
(2) deepen reform and promote development, stimulate the company's high-quality development, new vitality and new momentum
The company has thoroughly implemented the arrangements for the reform of state-owned enterprises, deepened reform to promote development, and further enhanced the vitality and competitiveness of enterprises. The reform of the "three systems" has been continuously deepened, and the model of market-oriented selection and recruitment of management teams in pilot units has achieved remarkable results. We will promote the transformation of the business model of the product division system to the market-oriented direction. Market-oriented "talent" to strengthen marketing, stimulate management potential, flexible and efficient response to the market. Excelsior to do a good job in product quality, technical service and marketing. Continuously strengthen quality management, enhance quality awareness, promote the application of "National quality Award", strengthen product quality assessment, and continuously improve product quality. In-depth promotion of benchmarking and upgrading, optimization of internal control, and promotion of professional management. By persisting in deepening reform in all aspects of the whole industrial chain, the company's production, sales and operating performance have generally achieved good growth, the ability to reduce costs and increase efficiency has been further enhanced, and high-quality development, new vitality and new momentum have sprung up.
(3) consolidate and enhance the management and control ability of the group and improve the management efficiency of the company in an all-round way
The company innovates the group management and control model, explores the classified authorization model, stimulates the vitality of business subjects, improves the ability to guard against operational risks and investment risks, and implements the whole-process management system of pre-system standardization, in-process follow-up and monitoring, and post-event supervision and accountability. Improve the performance appraisal system, the guiding role is more obvious, and the assessment indicators are more scientific. Strict appointment of senior executives to work goal responsibility system and economic responsibility system assessment, strengthen the sense of responsibility. Standardize the corporate governance system, sort out and improve the decision-making boundaries and lists of decision-making bodies of the company, continuously standardize corporate governance, clarify the division of responsibilities, and ensure effective operation. Strengthen system construction, implement system inventory management for molecular companies, and improve the overall level of management and control. Establish a legal risk management system and promote standardized management of contracts. Strengthen audit supervision, adhere to the problem-oriented, formulate measures, strengthen supervision, and strictly grasp the implementation of rectification and reform. We will improve the system, strengthen the management of investor relations, and maintain and promote the promotion of market capitalization. Strengthen the credit management of the company, maintain the main body and bond rating AAA, to create good conditions for financing. (4) to make overall efforts to promote project construction and joint ventures and cooperation, and adhere to the road of development of high value-added industries
The company implements the spirit of General Secretary Xi Jinping's important instructions on "digging and selling soil", unswervingly takes the new way of high-quality development guided by ecological priority and green development, and fosters new industries, new momentum and new profit growth points. The upgrading project of green smelting and the technological upgrading project of Huamei region will be carried out in an orderly manner. The coke oven gas transformation project has been put into use. Trial production of 500 tons of rare earth cerium-zirconium material production line. The closure of Baiyun Boyu and Heinenbao tailings reservoir has been basically completed. Phased results have been achieved in the resource utilization of ammonia and nitrogen by-products from rare earth smelting, saline-alkali land improvement and large-scale planting experiments. The polishing powder renovation and expansion project and the PVC rare earth heat stabilizer expansion project are carried out in an orderly manner. The construction of rare earth medical industry base was completed in an all-round way. Promote industrial chain joint venture and cooperation, spend more than 8000 million yuan to acquire Baotou Huaxing rare Earth Technology Co., Ltd., and further expand the company's production capacity of rare earth metals and polishing powder. Promote the joint venture and cooperation of permanent magnet motor projects and promote the technology of permanent magnet motor products. Invest 500 million yuan to participate in the Mongolian Commercial Bank, promote the integration of industry and finance, and enhance the profit space.
(5) persisting in innovation driving high-quality development, giving full play to the advantages of scientific research and improving the efficiency of scientific research
The company deepens the reform of scientific research system and mechanism, gives full play to the resource advantages such as scientific research platform, and promotes the transformation of scientific research achievements Independent research and development of 0.5T magnetic resonance imaging system and mobile square module magnetic resonance products have achieved good results; NdFeB radiation magnetic ring for permanent magnet servo motor has been put into mass production; development of rare earth magnesium alloy materials that meet the heat dissipation requirements of Huawei 5G communication base station; development of nanometer rare earth magnesium zirconium grain refiner products to replace import level; development of white light LED lamp decoration powder to achieve technology ownership; The polishing material for 3D touch glass has been developed independently, and the trial effect is good. Give full play to the advantages of talents, based on high-quality scientific research resources, and actively cultivate high-level innovative talents. In the whole year, 71 invention patents and 44 authorized patents were declared, 18 awards at or above the provincial and ministerial level, and 1 first-class rare earth science and technology award and 4 second-class rare earth science and technology awards were awarded. Researchers won the gold medal in the China Innovation method Competition, and "rare Earth" magazine joined the ranks of international authoritative journals. Formulate (revise) 8 national and industry standards, 9 group standards, 9 national and industry standards and 2 international standards, build a testing and evaluation system for 6 types of new materials, and achieve zero breakthrough in rare earth international standards.
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