China Northern Rare Earth's net profit for the first three quarters is expected to increase by 272.54% to 287.34% YoY, with production and sales of major products also rising YoY.

According to the preliminary estimate by the company's finance department as disclosed in China Northern Rare Earth's pre-announcement of estimated earnings growth for the first three quarters of 2025 released on the evening of October 10, the net profit attributable to owners of the parent company for the first three quarters of 2025 is expected to be between 1.51 billion yuan and 1.57 billion yuan, an increase of 1.105 billion yuan to 1.165 billion yuan compared with the same period last year (statutory disclosure data), up 272.54% to 287.34% YoY. The net profit attributable to owners of the parent company after deducting non-recurring gains and losses for the first three quarters of 2025 is expected to be between 1.33 billion yuan and 1.39 billion yuan, an increase of 1.064 billion yuan to 1.124 billion yuan compared with the same period last year (statutory disclosure data), up 399.90% to 422.46% YoY.

Regarding the main reasons for the estimated earnings growth in this period, China Northern Rare Earth stated:

From January to September 2025, facing a complex and evolving environment, the company effectively grasped the rhythm of market changes, adhered to its strategic plan, anchored its annual production and operation targets, strengthened comprehensive budget management, deepened cost reduction, quality improvement, and efficiency enhancement, scientifically coordinated production organization and scheduling, enhanced market analysis and forecasting, intensified marketing operations to seize market opportunities, accelerated key project construction, promoted scientific research and management innovation, strengthened performance-based incentives and constraints, and fully leveraged the stable domestic demand structure and advantages. By implementing coordinated measures across all aspects of production and operation management, focusing on "strengthening core competencies" to consolidate competitive advantages, addressing "weaknesses" to fill development gaps, "improving quality" to solidify the development foundation, and "promoting development" to activate growth momentum, the company laid a solid foundation and provided strong support for achieving a substantial year-on-year increase in operating performance.In terms of production and marketing,the company adhered to the green development concept and the quality philosophy of "users first, brand foremost," coordinated and advanced the scientific production organization model of the "Five Unifications" (unified development planning, unified technology sharing, unified production planning, unified raw material supply, unified coordinated maintenance), strengthened production system management, promoted product structure adjustment and process technology upgrades, continuously optimized the product mix, and advanced to meet market demand for high value-added products such as specialized, customized, and unique products. It conducted multi-dimensional benchmarking management horizontally and vertically, strengthened full cost benchmarking upgrades for processing, leading to a year-on-year reduction in the full cost of rare earth processing. The company made every effort to ensure the supply of raw materials and products, guided by market demand, deepened marketing model innovation, intensified marketing operations, and took multiple measures to actively digest inventories.The production and sales of major products, including smelting and separation, rare earth metals, rare earth functional materials, and permanent magnet motors, achieved varying degrees of growth year-on-year.providing energy-saving and carbon-reducing rare earth material options for the development of new energy. Key Project Construction, comprehensively consolidated scale advantages, accelerated the advancement of key projects, with Phase I of the new-generation rare earth green mining, beneficiation, and smelting upgrade project entering the final stage of production line linkage debugging, and Phase II commencing construction and progressing rapidly; industry chain M&A reorganization, joint ventures, cooperation, and other capital operation projects for extending, supplementing, and strengthening the chain were efficiently advanced. R&D and Innovation, continuously honed scientific research strengths, achieved abundant scientific and technological innovation results, organized applications for 20 national-level projects and 25 autonomous region-level projects. Undertook and participated in 5 national-level projects and 35 autonomous region-level projects, formulated and revised 49 various standards, applied for 145 patents, and continuously enhanced the level of service to major national and regional scientific and technological strategies. Strengthened technological R&D, promoted iterative upgrades in the company's process technology and equipment manufacturing capabilities.

China Northern Rare Earth announced on the evening of October 10: According to the rare earth concentrate pricing method and the Q3 2025 rare earth oxide prices, after calculation and approval at the company's 15th General Manager Office Meeting of 2025, the Q4 2025 rare earth concentrate transaction price is adjusted to tax-excluded 26,205 yuan/mt (dry basis, REO=50%), with the tax-excluded price increasing or decreasing by 524.1 yuan/mt for every 1% increase or decrease in REO. The price of 26,205 yuan/mt represents an increase of 7,096 yuan/mt compared to the Q3 2025 rare earth concentrate transaction price of 19,109 yuan/mt, up 37.13% QoQ.The rare earth concentrate prices for Baotou Steel and China Northern Rare Earth increased significantly QoQ in Q4, continuing the upward trend from the first three quarters of this year, meaning the transaction prices have been climbing steadily throughout the year! In Q1, the prices rose 4.7% QoQ, in Q2 they rose 1.11% QoQ, in Q3 they rose 1.5% QoQ, and in Q4 they rose 37.13% QoQ.Reviewing the changes in the rare earth concentrate transaction prices for Baotou Steel and China Northern Rare Earth in 2024 shows a slight increase QoQ in Q1 2024, a noticeable decrease QoQ in Q2 2024, a slight decrease QoQ in Q3 2024, nearly flat, and an increase QoQ in Q4 2024.

China Northern Rare Earth's Investor Relations Activity Record (September 2025) announced on October 9 shows:

Q: How does the company view the future price and market outlook for rare earths?

China Northern Rare Earth responded: In response to the national goals of "carbon peak by 2030 and carbon neutrality by 2060," driven by the new demands of building a new-type power system dominated by new energy and energy conservation and emission reduction, related technologies represented by permanent magnet synchronous technology will, in certain fields, drive the demand of the rare earth industry to become mainstream.

In recent years, against the backdrop of green and low-carbon development and the "electrification of everything," the demand for magnetic materials has increased by about 10%, and this trend is expected to continue through 2025. The rapid development of emerging fields such as wind power, NEVs, humanoid robots, and the low-altitude economy provides strong support for downstream demand growth. Additionally, mobile phone covers, semiconductors, and chips will drive the development of the downstream polishing powder industry; hydrogen storage will see new increments under the development of ESS; and permanent magnet motors will experience significant growth driven by the program of large-scale equipment upgrades and consumer goods trade-ins and the implementation of major national strategies and build up security capacity in key areas. Therefore, the company holds an optimistic attitude towards the future growth of downstream demand in the rare earth industry.

Product prices are mainly influenced by the supply-demand relationship. Since the beginning of this year, prices of major products such as Pr-Nd have remained stable. Although market orders and product prices were impacted by factors such as international trade during this period, stable domestic demand has provided strong support for the rare earth market, with overall market activity being better than the same period last year. Recently, affected by expectations and with the continuous recovery of producer orders, prices of mainstream rare earth products have continued to rise with minor fluctuations.

Q: Does the company have any plans for refinancing and mergers and acquisitions?

China Northern Rare Earth responded: The company's 2024 annual general meeting of shareholders reviewed and passed the "Proposal on Applying for Registration and Issuance of Non-Financial Enterprise Debt Financing Instruments in the Interbank Bond Market." To meet the company's operational development funding needs, optimize its debt structure, reduce financial expenses, and provide low-cost funding support for the company's high-quality development, the company plans to apply to the National Association of Financial Market Institutional Investors for the registration and issuance of non-financial enterprise debt financing instruments in the interbank bond market, with a total amount not exceeding 2.5 billion yuan. The issuance varieties include medium-term notes, short-term financing bills, and super short-term commercial papers. Various tasks for this debt financing project are progressing in an orderly manner.

Regarding mergers and acquisitions, in recent years, the company established Antai North through a joint venture with Advanced Technology & Materials Co., Ltd., completing a 5,000 mt/year rare earth permanent magnets industrialisation project; the acquisition and restructuring of Baotou Zhongxin Antai provided a beneficial supplement for the company's production of single lanthanum and single cerium metals; the establishment of Northern Zhaobao with Ningbo Zhaobao Magnet Industry Co., Ltd., Suzhou Tongrun Drive Co., Ltd., and Ningbo Xici Technology Co., Ltd. implements a 3,000 mt/year high-performance NdFeB magnetic material project, further meeting the magnetic material demands of high-end permanent magnet motors, robots, intelligent equipment, and other fields; and the establishment of Northern Jinlong with the company's associate company, Jinlong Rare Earth, involves the construction of a 5,000 mt rare earth oxide separation production line project, which has passed the anti-monopoly review for the concentration of operators by the State Administration for Market Regulation, completed industrial and commercial registration, obtained a business license, and is advancing the project construction. Going forward, the company will leverage merger and acquisition policies, and respond accordingly based on industry trends, market changes, customer needs, and industrial planning. It will extend, supplement, and strengthen the industry chain through capital operations such as mergers, acquisitions, and joint ventures, enhancing the value creation and high-quality development level of the industry chain, thereby creating greater value for the company and its shareholders.

Q: What is the company's outlook for Q3 and Q4 2025?

China Northern Rare Earth responded: Since the beginning of this year, prices of major rare earth products have risen steadily. Seizing the favorable market opportunity, the company actively adjusted its strategies and strengthened cost reduction, quality improvement, and efficiency enhancement to boost operating performance. In July and August, production and sales of key products were strong, and production costs further decreased. For Q3 and Q4 performance, please refer to the company’s subsequent periodic reports.

Q: Have there been any changes to the export policies for medium-heavy rare earths? What is the company’s export situation, and has it been affected?

China Northern Rare Earth responded: The export control policies for rare earth products introduced by the state aim to regulate rare earth exports in compliance with regulations and fulfill national security obligations. The company firmly supports and implements all state policies and measures. Since late April, some rare earth enterprises have successively applied for export licenses. The export controls mainly focus on licensing the export of dual-use items with medium-heavy rare earth attributes, covering seven medium-heavy rare earth elements including dysprosium and terbium. These require applying for dual-use item export licenses, with clear end-users and end-uses. Currently, lanthanum and cerium product exports proceed normally, while exports of the seven medium-heavy rare earth elements, including dysprosium and terbium, are carried out in accordance with control measures. The company primarily exports light rare earth products, which currently account for a relatively small proportion of total sales and overall revenue, so the impact of export controls is relatively limited.

Q: How is the development of the company’s magnetic materials?

China Northern Rare Earth responded: Looking ahead to the "16th Five-Year Plan" period, the company will base its efforts on expanding, optimizing, and strengthening the rapid-solidification alloy industry, and diversify and develop multiple varieties of rare earth permanent magnet materials.

In magnetic material alloys, the company will further increase the production scale of rapid-solidification alloys, synergizing process optimization, equipment upgrades, and process control to continuously improve product quality and production efficiency, optimize cost management, and solidify its leading position in the NdFeB rapid-solidification alloy sector. The company currently has an annual capacity of 100,000 mt for magnetic material alloys. To further enhance industrial competitiveness, its subsidiary Northern Magnetic Materials has begun construction on a 50,000 mt high-performance NdFeB rapid-solidification alloy project. Upon completion, the project will add an annual production capacity of 50,000 mt of magnetic material alloy and 10,000 mt of hydrogen-decrepitated powder, establishing the largest single-unit capacity, optimal comprehensive cost efficiency, and most market-competitive rare earth magnetic material alloy (powder) production plant, as well as a quality-leading new energy supporting magnetic material facility.

On the magnet side, the company is pursuing a differentiated and diversified layout in the downstream sectors of magnetic materials, building multi-product advantages across the entire industry chain, and enhancing the overall competitiveness of the rare earth magnetic materials segment. The company is accelerating capacity construction and technological upgrades. Through its joint venture Antai North, established with subsidiaries Northern Magnetic Material and Antai Technology, a 5,000 mt/year rare earth permanent magnet industrialisation project has been completed. In partnership with Ningbo Zhaobao Magnetic Industry, Suzhou Tongrun Drive, and Ningbo Xici Technology, the company co-established Northern Zhaobao to implement a 3,000 mt/year high-performance NdFeB magnetic material project, further meeting the magnetic material demands of high-end permanent magnet motors, robotics, intelligent equipment, and other fields.

Q: What is the pricing mechanism for rare earth concentrate transactions between the company and Baogang United Steel?

China Northern Rare Earth responded: The pricing mechanism for rare earth concentrate transactions between the company and Baogang United Steel is implemented in accordance with the "Proposal on the Pricing Mechanism for Daily Related-Party Transactions of Rare Earth Concentrate and Its Execution in 2022 and Estimates for 2023," passed at the company's first interim shareholders' meeting in 2023. Specifically, starting from April 1, 2023, with the rare earth concentrate pricing formula remaining unchanged, the company calculates and adjusts the rare earth concentrate price in the first ten days of each quarter's first month, then re-signs the rare earth concentrate supply contract or supplementary agreement and issues an announcement. Currently, this pricing mechanism is operating stably.

Q: What are the downstream applications of rare earth lanthanum and cerium?

China Northern Rare Earth responded: Due to their unique electron shell structures and favorable physical and chemical properties, lanthanum and cerium elements are widely used in polishing materials, hydrogen storage materials, cerium-iron-boron (Ce-Fe-B) permanent magnet materials, optical functional materials, catalytic materials, and other fields. In recent years, China Northern Rare Earth has intensified research on the expansion of lanthanum and cerium applications, achieving breakthroughs in areas such as polymer material additives, functional coatings, antibacterial materials, functional ceramic materials, functional textile materials, refractory materials, and functional glass. The company has developed a series of new materials and products, effectively promoting the balanced utilization of lanthanum and cerium rare earth resources.

A Huaan Securities research report on China Northern Rare Earth dated September 3 pointed out: The production and sales of the company's various products increased significantly YoY. In Q2 2025, the company's material production and sales showed notable growth. Leveraging its resource advantages, the company is actively developing rare earth functional materials. Capitalizing on its rare earth resource strengths and using capital as a link, the company is expanding its rare earth functional materials industry—including magnetic materials, polishing materials, and hydrogen storage materials—through mergers and acquisitions, wholly-owned establishments, and joint ventures. The company develops, produces, and sells rare earth functional material products within their respective industrial fields by procuring and processing rare earth raw material products. Leveraging its resource characteristics and industrial layout, the company has established an end-use application structure centered on magnetic materials and rare earth permanent magnet motors. Risk warnings: The company's new capacity construction may fall short of expectations; raw material price fluctuations may exceed expectations; industry competition may intensify.

A Guosen Securities research report commenting on China Northern Rare Earth's semi-annual report on September 1 stated that profitability rebounded significantly, while the period expense ratio remained stable with a slight decrease. Production of multiple product categories reached record highs, and procurement volume of rare earth concentrate from Baotou Steel remained basically flat YoY. In H1 2025, the company's rare earth oxide production was 15,200 mt, up 111.20% YoY; rare earth salt production was 71,100 mt, down 1.32% YoY; rare earth metal production was 24,100 mt, up 28.10% YoY; rare earth functional material production increased 16.65% YoY, with magnetic material performance being particularly notable—production reached 34,600 mt (up 24.13% YoY) and sales reached 34,700 mt (up 25.39% YoY). The rare earth concentrate required for the company's production is primarily procured from related party Bao Gang United Steel. In H1 2025, the transaction value for rare earth concentrate procured from Bao Gang United Steel was 4.335 billion yuan, with an agreed price of 18,716 yuan/mt. The transaction volume converted to REO was 115,800 mt, basically flat YoY compared to 116,400 mt in the same period last year, but down 4% MoM. The company accelerated key project construction, with multiple metal and magnetic material projects progressing orderly. The company's Huaxing Rare Earth 8,000 mt metal project and Gansu Rare Earth 12,000 mt metal project have been gradually put into operation; the Northern Magnetic Materials 50,000 mt magnetic material alloy project has commenced construction; the Northern Zhaobao 3,000 mt magnet project has started construction; efforts are underway to complete Phase I of the Tianjiao Qingmei 9,000 mt polishing powder expansion project and proceed with Phase II commissioning and acceptance. Risk warnings: Growth in magnetic material demand may fall short of expectations; rare earth prices may fluctuate significantly; concentrate prices may rise substantially; the growth rate of the company's mining quotas may fall short of expectations.