The average annual price of major rare earth products, represented by Pr-Nd, decreased YoY. China Northern Rare Earth's net profit decreased by 57.64% YoY last year.

Affected by the continuous downward trend in rare earth product prices, China Northern Rare Earth (600111.SH) saw further declines in revenue and net profit in 2024, with the annual profit target achieving less than half. In 2023, the company's performance dropped by over 60% YoY.

China Northern Rare Earth announced this evening that last year, the company achieved operating revenue of 32.966 billion yuan, down 1.58% YoY; net profit attributable to shareholders of the publicly listed firm was 1.004 billion yuan, down 57.64% YoY. Net cash flow from operating activities was 1.026 billion yuan, down 57.76% YoY.

Regarding the reasons for the performance changes, China Northern Rare Earth stated that in 2024, despite the increase in annual sales of its main products, the prices of major rare earth products, represented by Pr-Nd products, continued to fluctuate downward since the beginning of the year, with the annual average price lower YoY. Meanwhile, the company and its subsidiaries collectively made asset impairment provisions of 440 million yuan last year, including inventory impairment provisions of 291 million yuan.

According to China Northern Rare Earth's 2023 annual report, the company set its main production and operation targets for 2024 as achieving operating revenue of over 43 billion yuan and total profit of over 4.3 billion yuan. The annual report shows that China Northern Rare Earth's total profit in 2024 was 1.837 billion yuan. Based on this calculation, the company's operating revenue and total profit achieved 76.67% and 4.272 billion yuan, respectively, last year.

Cailian Press reporters noted that in Q4 2024, China Northern Rare Earth's performance ranked first among all quarters, with operating revenue of 11.406 billion yuan, accounting for 34.6% of the company's total annual revenue, with YoY and QoQ increases of 33.03% and 33.09%, respectively; net profit attributable to the parent company was 599 million yuan, accounting for 59.66% of the annual net profit, with YoY and QoQ changes of -39.49% and 66.39%, respectively.

The financial report shows that last year, China Northern Rare Earth had a trading financial asset that impacted the current period's profit by approximately 105 million yuan, boosting the company's net profit in 2024.

China Northern Rare Earth's main products include rare earth raw materials, rare earth functional materials, and rare earth end-use application products. Among them, rare earth raw materials include rare earth salts, rare earth oxides, and rare earth metals, while rare earth functional materials include rare earth magnetic materials, polishing materials, hydrogen storage materials, and catalytic materials. In 2024, the company's rare earth raw material products generated revenue of 15.891 billion yuan, accounting for 48.2% of total revenue; rare earth functional materials generated revenue of 7.926 billion yuan, accounting for 24.04% of total revenue.

In terms of production and sales, last year, the company's sales of rare earth oxides, rare earth salts, and rare earth metals increased by 6.07%, 19.26%, and 13.77% YoY, respectively; rare earth metal production increased by 19.84% YoY, while rare earth oxide and rare earth salt production decreased by 7.26% and 1.6% YoY, respectively; rare earth oxide inventory decreased by 39.61% YoY, while rare earth salt and rare earth metal inventory increased by 18.3% and 78.12% YoY, respectively.

Notably, China Northern Rare Earth plans to achieve operating revenue of over 37.217 billion yuan and total profit of over 2.82 billion yuan in 2025, representing increases of no less than 12.9% and 53.51%, respectively, compared to 2024's performance.

Compared to the 2024 target of "achieving operating revenue of over 43 billion yuan and total profit of over 4.3 billion yuan," China Northern Rare Earth's 2025 business targets have clearly shifted to a more conservative approach. In 2023, the company's business targets were to achieve annual operating revenue of 42.66 billion yuan and total profit of 6.4 billion yuan.