CNRE(600111) 国信证券·2024-11-03 08:17Investment Rating - The investment rating for the company is "Outperform the Market" [1][3][13]. Core Views - The company reported a year-on-year revenue growth of 1.5% and a net profit growth of 10.9% in Q3 2024. For the first three quarters of 2024, the revenue was CNY 21.56 billion, down 13.5% year-on-year, and the net profit was CNY 405 million, down 70.64% year-on-year [1][5]. - The company has strengthened its cost advantages since Q4 2024, with procurement prices for rare earth concentrates significantly lower than market averages, enhancing profitability [1][11]. - The company has seen a steady increase in product listing prices over three consecutive months, positively influencing market sentiment and indicating a potential recovery in demand for rare earth materials [1][13]. Summary by Relevant Sections Financial Performance - In Q3 2024, the company achieved a revenue of CNY 8.57 billion, a year-on-year increase of 1.54% and a quarter-on-quarter increase of 18.56%. The net profit for the same period was CNY 360 million, up 10.94% year-on-year and up 5507.71% quarter-on-quarter [1][5]. - The company’s gross margin for Q1 2024 was 9.04%, down 3.40 percentage points year-on-year, while the net margin was 3.81%, down 2.45 percentage points year-on-year. In Q3 2024, the gross margin improved to 10.68%, up 0.57 percentage points year-on-year [6][9]. Production and Supply Chain - The company produced 0.42 million tons of rare earth oxides in Q3 2024, a year-on-year increase of 6.19%. The production of rare earth metals was 0.98 million tons, up 32.87% year-on-year, and magnetic materials production was 1.71 million tons, up 26.42% year-on-year [1][11]. - The company has a stable supply of rare earth resources from Baotou Steel, with procurement prices for rare earth concentrates significantly lower than market prices, further enhancing its cost structure [1][11]. Market Outlook - The company is positioned as a leader in the rare earth industry, with continuous growth in quotas and advantageous raw material procurement. The expected revenue for 2024-2026 is CNY 33.37 billion, CNY 36.36 billion, and CNY 40.23 billion, with net profits projected at CNY 957 million, CNY 1.97 billion, and CNY 2.89 billion respectively [1][13][14]. - The long-term outlook for the rare earth industry remains positive, driven by the increasing demand from sectors such as electric vehicles and renewable energy [1][13].