CNRE(SH:600111) Orient Securities·2024-07-30 08:01Investment Rating - The report maintains a "Buy" rating for the company with a target price of 18.00 CNY, based on a valuation of 18X PE for 2025 [5][3]. Core Views - The company recently issued a profit forecast, expecting a net profit attributable to the parent company of 37-54 million CNY for the first half of 2024, a decrease of 100.2-101.9 million CNY year-on-year, representing a decline of 94.9%-96.5% [2]. - The decline in profitability is attributed to the year-on-year drop in praseodymium and neodymium prices, with the average price of praseodymium-neodymium oxide at 380,000 CNY, down 33% year-on-year [2]. - The company anticipates an increase in rare earth product output, with expected growth of approximately 18% in rare earth smelting and separation products, 16% in rare earth metal products, and 11% in rare earth functional materials, all reaching historical highs for the same period [2]. - The release of the "Rare Earth Management Regulations" is expected to promote high-quality development in the industry, establishing the strategic resource status of rare earths and implementing measures to curb excessive mining and waste [2]. Financial Summary - The company's revenue for 2024 is projected to be 30,830 million CNY, a decrease of 8.0% from 2023, with a recovery expected in 2025 with a growth of 31.1% [4]. - The net profit attributable to the parent company is forecasted to be 547 million CNY in 2024, down 76.9% from 2023, with a significant recovery anticipated in 2025 [4]. - The earnings per share (EPS) for 2024 is expected to be 0.15 CNY, with a recovery to 1.00 CNY in 2025 and 1.19 CNY in 2026 [4]. - The gross margin is projected to decline to 8.4% in 2024, with a gradual recovery to 16.4% in 2025 and 17.6% in 2026 [4].