Core Viewpoint - The company reported a revenue of 32.966 billion yuan in 2024, a year-on-year decrease of 1.58%, with a net profit attributable to shareholders of 1.004 billion yuan, down 57.64% year-on-year. However, the market is showing signs of recovery in Q1 2025, leading to a maintained "buy" rating [1][2]. Financial Performance - In 2024, the company's revenue was 32.966 billion yuan, with a net profit of 1.004 billion yuan and a non-recurring net profit of 0.901 billion yuan, reflecting significant declines of 57.64% and 61.12% year-on-year respectively [1]. - Q4 2024 saw a revenue of 11.407 billion yuan, up 33.04% year-on-year and 33.10% quarter-on-quarter, with a net profit of 0.599 billion yuan, down 39.52% year-on-year but up 66.41% quarter-on-quarter [1]. - In Q1 2025, the company achieved a revenue of 9.287 billion yuan, a year-on-year increase of 61.19% but a quarter-on-quarter decrease of 18.58%, with a net profit of 0.431 billion yuan, reflecting a year-on-year increase of 727.30% [1][2]. Production and Margins - The production of rare earth oxides, salts, metals, and magnetic materials in 2024 showed a year-on-year decline of 7.26%, 1.6%, but increases of 19.84% and 17.72% respectively [2]. - The overall gross margin decreased due to falling rare earth prices, with gross margins for rare earth raw materials and functional materials at 8.63% and 17.56%, down 9.5 percentage points and 5.45 percentage points year-on-year respectively [2]. - In 2024, the company recognized an asset impairment of 357 million yuan, impacting performance, while no impairment was recognized in Q1 2025 [2]. Market Outlook - The supply-demand situation is expected to improve, with the rare earth price nearing the cost line for some high-cost mines, indicating a potential industry bottom [3]. - Domestic supply constraints are evident, with mining and smelting indicators increasing by 5.88% and 4.16% year-on-year, but the growth rates have declined significantly [3]. - The global supply of rare earths is expected to contract due to reduced domestic quotas and disruptions in overseas supply, while emerging fields like humanoid robots are anticipated to drive future demand growth [3]. Profit Forecast and Valuation - The company has adjusted its price assumptions for praseodymium and neodymium oxides, forecasting EPS of 0.52, 0.85, and 1.13 yuan for 2025-2027, reflecting year-on-year decreases of 28.8% and 24.8% for 2025 and 2026 respectively [4]. - The target price for the company is set at 26.59 yuan, based on a PE ratio of 51.13 for 2025, maintaining a "buy" rating [4].

Investment Rating - The investment rating for the company is maintained as "Accumulate" with a target price of RMB 26.59 [7][8]. Core Views - The company achieved a revenue of RMB 32.966 billion in 2024, a year-on-year decrease of 1.58%, and a net profit attributable to shareholders of RMB 1.004 billion, down 57.64% year-on-year. However, Q4 2024 showed a revenue increase of 33.04% year-on-year [1][2]. - In Q1 2025, the company reported a revenue of RMB 9.287 billion, representing a year-on-year increase of 61.19%, and a net profit of RMB 431 million, up 727.30% year-on-year, indicating a market recovery in the rare earth industry [1][2]. - The report suggests that the rare earth industry may be at an inflection point, with supply constraints and improving downstream demand expected to enhance the supply-demand balance in 2025 [3][4]. Summary by Sections Financial Performance - In 2024, the company's production of rare earth oxides, salts, metals, and magnetic materials decreased by 7.26%, 1.6%, increased by 19.84%, and 17.72% respectively. The overall gross margin declined due to falling rare earth prices [2]. - The company recorded an asset impairment of RMB 357 million in 2024, impacting performance, but did not incur such impairments in Q1 2025 [2]. Supply and Demand Outlook - The report indicates that rare earth prices approached the cost line for some high-cost mines by Q3 2024, establishing a bottom for the industry. Supply constraints are evident due to reduced domestic quotas and disruptions in overseas supply [3]. - The report anticipates a potential improvement in the supply-demand relationship in 2025, with a projected balance of -5.8% for global praseodymium-neodymium oxide supply and demand [3]. Profit Forecast and Valuation - The company’s EPS is projected to be RMB 0.52, 0.85, and 1.13 for 2025, 2026, and 2027 respectively, reflecting a downward adjustment in price assumptions for praseodymium-neodymium oxide [4]. - The target price of RMB 26.59 is based on a PE ratio of 51.13 for 2025, aligning with the average PE of comparable companies [4][12].