China Northern Rare Earth: Q1 net profit is expected to increase by 716.49%-735.7%. Last year, net profit decreased by 57.64% YoY.

SMM, April 8: The rare earth permanent magnets index strengthened in the afternoon of April 8, with China Northern Rare Earth's share price also showing a significant increase. By the close of trading on April 8, China Northern Rare Earth's shares had risen 5.14% to RMB 23.94 per share. In terms of news, China Northern Rare Earth announced on April 8 that its net profit for the first quarter of 2025 is expected to increase significantly by 716.49%-735.70%. Additionally, the company's 2024 annual performance report showed that it achieved operating income of approximately RMB 32.966 billion, a decrease of 1.58% year-on-year, and net profit attributable to shareholders of the listed company of approximately RMB 1.004 billion, a decrease of 57.64% year-on-year. The performance report of China Northern Rare Earth revealed that in 2024, due to factors such as weak global economic growth and lower-than-expected growth in downstream demand, the prices of major rare earth products, represented by Pr-Nd oxide, generally showed a fluctuating downward trend. The average price declined year-on-year, and the overall performance of the rare earth market was weak. Faced with the unfavorable market situation of declining rare earth product prices, the company focused on its annual production and operation targets, thoroughly implemented new development concepts, built a new development paradigm, and took on the important task of being the main force in the construction of the "two rare earth bases." The company made overall plans and implemented comprehensive measures at all levels of production and operation, anchored its goals, overcame difficulties, and strived to reduce the impact of unfavorable factors on the company. Its high-quality development achieved new results, with production and sales volumes of major products reaching new highs. Although revenue and profits declined year-on-year, its operating performance remained at the forefront of the rare earth industry. Capacity utilisation rate and market share further increased, with the processing cost per ton of rare earth decreasing by 5.1% year-on-year and the comprehensive financing cost of interest-bearing liabilities further reducing. Key construction projects and industry chain mergers and acquisitions were promoted in an orderly manner, and the company's invested green mining, beneficiation, and smelting upgrading project for a new generation of rare earths has been completed and put into operation in its first phase. The company accelerated its transformation and upgrading towards high-end, digital intelligence, and green development, deepened reform and innovation, promoted ESG and other management improvements, increased R&D investment, optimized scientific research systems and mechanisms, strengthened performance appraisal and risk prevention and control, and accelerated the construction of the "two rare earth bases." Through overall planning and comprehensive measures, the company continuously improved the quality and efficiency of its high-quality development, laying a solid foundation for being the main force in the construction of the "two rare earth bases," completing the "14th Five-Year Plan," and becoming a world-class leader in the rare earth industry. This contributed to the stable and high-quality development of China's rare earth industry. China Northern Rare Earth's first-quarter performance forecast, disclosed on the same day, showed that after initial calculations by the financial department, the company expects to achieve a net profit attributable to shareholders of the parent company of RMB 425 million to RMB 435 million in the first quarter of 2025. This represents an increase of RMB 375 million to RMB 385 million compared to the same period last year, or an increase of 716.49% to 735.70% year-on-year. The company also expects to achieve a non-recurring profit and loss net profit attributable to shareholders of the parent company of RMB 429 million to RMB 439 million, representing an increase of RMB 425.3 million to RMB 435.3 million compared to the same period last year, or an increase of 11468.78% to 11738.45% year-on-year. Regarding the main reasons for the expected increase in first-quarter performance, China Northern Rare Earth stated that in the first quarter of 2025, due to factors such as tightened upstream raw material supply and downstream consumption stimulus policies, the overall activity of the rare earth market was better than the same period last year. The prices of major rare earth products, represented by Pr-Nd oxide, showed an upward trend with good transaction volumes. The company seized the favorable opportunity of market stabilization and improvement, focused on its annual production and operation targets, thoroughly implemented new development concepts, built a new development paradigm, and took on the important task of being the main force in the construction of the "two rare earth bases." The company comprehensively improved production line efficiency, continuously optimized raw material and product structures, deepened marketing model innovation with market demand as the guidance, strengthened marketing operations, and achieved year-on-year growth in production and sales volumes of major products. The company achieved significant results in cost reduction and efficiency improvement, with quality and efficiency improvements in rare earth products. Joint ventures, cooperation, and infrastructure technological transformation projects were promoted in an orderly manner, with continuous enhancement of scientific and technological innovation contributions. Management innovation drove the consolidation and enhancement of high-quality development quality and efficiency, with orderly advancement of ESG, compliance, and market value management. The coordinated advancement and efficient implementation of various work in the company's production and operation management laid a solid foundation for the significant year-on-year growth in the company's first-quarter performance. From China Northern Rare Earth's performance in the past year and the first quarter of this year, it is evident that fluctuations in the prices of rare earth products such as Pr-Nd are closely related to the production and operation of rare earth companies. Click here to view SMM rare earth spot prices. Subscribe to view SMM metal spot price historical trends. Reviewing the historical price trend of SMM Pr-Nd oxide in 2024, it can be seen that the average price on December 31, 2024 was RMB 398,000/mt, which was a decrease of RMB 44,500/mt or 10.06% compared to the average price of RMB 442,500/mt on December 29, 2023. The annual average daily price of Pr-Nd oxide in 2024 was RMB 391,871.9/mt, which was a decrease of RMB 137,402.89/mt or 25.96% compared to the annual average daily price of RMB 529,274.79/mt in 2023. From these data, it can be seen that the annual average daily price of Pr-Nd oxide decreased more significantly year-on-year, putting pressure on the company's production and operation in 2024. Entering 2025, compared to the end of 2024, the overall price of Pr-Nd oxide has shown an increase. Reviewing the price trend of SMM Pr-Nd oxide in the first quarter, it can be seen that the average price of Pr-Nd oxide on March 31 this year was RMB 444,500/mt, which was an increase of RMB 46,500/mt or 11.68% compared to the average price of RMB 398,000/mt on December 31, 2024. Comparing the average daily price of Pr-Nd oxide in the first quarter of 2025, which was RMB 429,605.26/mt, with the average daily price of RMB 381,646.55/mt in the first quarter of 2024, it can be seen that the average daily price in the first quarter of this year increased by 12.57% year-on-year. The year-on-year increase in the average price of Pr-Nd oxide in the first quarter is expected to significantly boost the profits of rare earth companies in the first quarter. The significant expected increase in China Northern Rare Earth's first-quarter net profit is mainly due to the rise in rare earth prices.