HTSC·2025-04-06 06:16Investment Rating - The industry investment rating is "Overweight" for both Rare Metals and Nonferrous Metals [7][22]. Core Viewpoints - The recent export control on medium and heavy rare earths is expected to enhance the strategic positioning of the sector, emphasizing the importance of asset allocation within this space [5][10]. - The export control primarily targets medium and heavy rare earths and related neodymium-iron-boron materials, suggesting a focus on these specific assets for potential investment opportunities [5][10]. - The actual impact of the export control may be less than theoretical estimates due to the possibility of continued exports upon approval of applications [3][4]. Summary by Sections Export Control Measures - On April 4, the Ministry of Commerce and the General Administration of Customs announced export controls on seven categories of medium and heavy rare earths, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium [2][4]. - The aim of these measures is to better safeguard national security and interests, fulfilling international obligations related to non-proliferation [2]. Market Impact - In 2024, China's neodymium-iron-boron export volume is projected to account for approximately 20% of total production, with exports of rare earth magnetic materials expected to reach 65,057.6 tons, a year-on-year increase of 8.4% [3][4]. - The export control may lead to a divergence in domestic and international pricing, with overseas prices likely to be higher than domestic prices, increasing the probability of price hikes [4]. Strategic Recommendations - The report suggests focusing on medium and heavy rare earth-related stocks due to their strategic importance as alternatives to counter tariff disruptions [5][10]. - Key recommended stocks include Shenghe Resources (600392 CH) with a target price of 15.81 and North Rare Earth (600111 CH) with a target price of 24.28, both rated as "Buy" and "Overweight" respectively [10][11].