SHRC(SH:600392) 2 1 Shi Ji Jing Ji Bao Dao·2025-10-15 23:04Core Viewpoint - The significant increase in profits for Shenghe Resources in Q3 is attributed to the rise in rare earth prices, with net profit expected to reach between 740 million to 820 million yuan, marking an increase of 696.82% to 782.96% year-on-year [1] Group 1: Profit Forecast and Performance - Shenghe Resources anticipates a net profit of 740 million to 820 million yuan for the first three quarters, exceeding most institutional expectations [1][5] - The company's Q3 net profit is projected to be around 400 million yuan, a 100% increase from the previous quarter [4] - The overall profit trend is closely linked to the fluctuations in rare earth prices, which have shown a significant upward trend since July [4] Group 2: Rare Earth Price Dynamics - The rare earth price index, tracked by the China Rare Earth Industry Association, rose sharply from 160-180 points in the first half of the year to a peak of 233 points in mid-August [3] - The increase in demand and prices for rare earth products is driven by changes in market supply and demand dynamics [1] Group 3: Business Structure and Revenue Contribution - Shenghe Resources operates a complete industrial chain in rare earths, covering mining, smelting, separation, and deep processing, with rare earth metals and oxides accounting for approximately 83% of total revenue [4] - The company has a diversified product range, including rare earth concentrates, oxides, and salts, which contributes to its profitability [4] Group 4: Future Outlook and Valuation - Despite a recent decline in the rare earth price index, it remains at a relatively high level, suggesting potential for upward adjustments in profit forecasts for 2025 [6] - The company's stock price as of October 15 is 26.26 yuan per share, with a projected annualized valuation of around 65 times earnings based on a 700 million yuan profit forecast for 2025 [7] - The acquisition of Peak Rare Earths Limited is expected to provide a strong performance boost in the coming years, with significant resources in the Ngualla rare earth project [7][8] Group 5: Acquisition Details - The acquisition of Peak Rare Earths Limited was completed with a revised purchase price of approximately 920 million yuan, reflecting the rising market prices for rare earth products [7] - The Ngualla rare earth project is noted for its high quality and low cost, with expected production starting in Q1 2027 [8] - The project is projected to generate a total net profit of approximately 390 million yuan, with potential for further improvements in production and cost efficiency [8]