[SMM special topic] rare earth plate strong multi-shares rose one after another in the first half of the enterprise performance "jubilant"!

In recent days, the rare earth industry continues to be hot, rare earth prices have risen for several days in a row, the rare earth permanent magnet plate has gone higher, and many stocks have risen by the daily limit one after another. By the close of midday today, Jiaozuo Wanfang and Dayang electromechanical rose by the daily limit, Shenghe Resources rose by more than 9%, Minmetals rare earths, Jinli permanent magnets and so on rose one after another.

Recently, a number of enterprises have issued semi-annual performance forecasts, rare earth permanent magnet related enterprises have performed very well. The net profit attributable to shareholders of listed companies in the first half of 2021 was 100 million yuan to 120 million yuan, an increase of 297.88% to 377.46% over the same period last year. In the first half of 2021, due to the effective control of the epidemic situation of novel coronavirus, the production and operation of the company returned to normal, and the normal growth of operating income led to a larger increase in net profit belonging to shareholders of listed companies in the first half of 2021 compared with the same period last year.

Net profit for the first half of the year is expected to be 516 million to 584 million yuan, up 50 to 70 per cent from a year earlier, according to the announcement. It is understood that in terms of magnetic materials business, Hengdian East Magnetic is currently in the condition of taking orders at full load. based on the increase in customer demand, the company is also increasing capital expenditure, and there are projects in this department and Jinchuan Electronics that are expected to maintain double-digit growth throughout the year.

Jinli permanent magnet issued a semi-annual performance forecast, the net profit of shareholders in the first half of the year is expected to be 210.0498 million yuan to 237.8997 million yuan, an increase of 130% to 160% over the same period last year. In addition, Jin Li permanent Magnet pointed out that in the first half of 2021, the company had sufficient orders on hand, made full use of production capacity, and the production and sales of products infiltrated by grain boundaries increased rapidly. among them, the company's revenue in the field of new energy vehicles and auto parts increased by about 150% compared with the same period last year, and its revenue in the field of energy-saving frequency conversion air conditioners increased by about 120%. In addition, the company's revenue in the wind power sector increased by more than 30% compared with the same period last year, increased large-scale mass production in 3C, and maintained stable revenue in areas such as robotics and intelligent manufacturing, and energy-efficient elevators.

Baotou Iron and Steel Co., Ltd. issued a notice that the net profit attributed to shareholders of listed companies in the first half of 2021 is expected to be 2 billion yuan to 2.8 billion yuan, an increase of 1.916 billion yuan to 2.716 billion yuan compared with the same period last year, an increase of 2,281% to 3,233% over the same period last year. In the first half of 2021, the prices of steel market and rare earth market rose significantly, the company overcame the high operating pressure of bulk raw fuel prices, increased efforts to reduce costs and efficiency, vigorously adjusted the product structure, and continuously improved the level of production, operation and management and high-quality development. Profitability was significantly enhanced, and business performance increased significantly in the first half of the year compared with the same period last year.

Antai Technology issued a pre-increase announcement for the first half of the year, which is expected to achieve a net profit of 115 million yuan to 122 million yuan, with a year-on-year increase of 129.09% to 143.03%. Antai Technology also said that the company's two core businesses "refractory tungsten and molybdenum deeply processed products" and "rare earth permanent magnet materials and devices" sales revenue and profits have increased significantly.

The price of rare earths has fluctuated since the first half of the year, continued to rise since the beginning of the year, fell after reaching a small high in early March, and then rose again. But rare earth prices have fallen since April and continued to decline, reaching a low in early June. Since then, rare earth prices have bottomed out and rebounded, and rare earth prices have continued to rise since July. On July 16, the spot price of SMM praseodymium and neodymium oxide averaged 56500 yuan per ton, up nearly 100000 from a month ago.

"Click to view the spot price of metal.

In addition to rising prices, strong downstream demand is also one of the reasons why the rare earth industry continues to improve. The electrification of cars exceeded expectations, and wind power and frequency conversion air conditioners increased steadily. According to figures released by the China Association of Automobile Manufacturers on July 9, China produced 248000 new energy vehicles (256000 sales) in June 2021, an increase of 14.2 percent from the previous month, an increase of 1.43 percent over the same period last year. From January to June, the cumulative production of new energy vehicles was 1.214 million, an increase of 2.3 percent over the same period last year.

In terms of wind power, driven by carbon neutralization and carbon peak, the wind power industry has developed rapidly since the beginning of this year. According to data from the National Energy Administration, 5.26 million kilowatts of wind power will be installed in the first quarter of 2021, including 4.03 million kilowatts of onshore wind power and 1.23 million kilowatts of offshore wind power. Since the beginning of this year, offshore wind power projects have developed more rapidly. In May 2019, the National Development and Reform Commission issued a notice on improving the policy on the feed-in price of wind power, requiring that onshore and offshore wind power projects must be connected to the grid by the end of 2020 and 2021 respectively in order to receive subsidies. As the subsidies will end at the end of this year, many enterprises have stepped up efforts to speed up the layout of offshore wind power projects. According to RystadEnergy, an international energy consultancy, global offshore wind power installations will increase by a further 11.8 GW in 2021, with an estimated annual growth rate of 37%. Among them, China will lead the new installation, which will contribute 63% of the global new offshore wind power installations.

In addition, on January 15 this year, the Ministry of Industry and Information Technology issued the regulations on the Administration of rare Earths (draft for soliciting opinions), clearly pointing out that no unit or individual may invest in the construction of rare earth mining and rare earth smelting separation projects without approval, and set a general tone for the follow-up domestic rare earth mining and separation, that is, to continue to implement total quantity target control. Policies such as the rare Earth regulations may be gradually introduced in the second half of the year, which will play a role in promoting the long-term development of rare earths.

Northeast Securities believes that carbon-neutral wind power installation or continuous expansion, new energy efficiency standards promote high-end air-conditioning industry, traditional car EPS permeability increase, 5G replacement trend boost 3C demand, etc., will also contribute to the increase in demand. Supply and demand tightening + low inventory, short-term optimistic about the catalysis of Q3-Q4 price increase. In the second half of the year, new energy vehicles, air conditioners and other downstream traditional peak season will come, while domestic environmental inspectors + Myanmar rainy season will lead to marginal supply contraction, stacked inventory is very low, Q3-Q4 rare earth prices are expected to continue to rise.