Summary of JL Mag Rare-Earth Co. Ltd Conference Call Company Overview - **Company**: JL Mag Rare-Earth Co. Ltd - **Ticker**: 6680.HK - **Industry**: Greater China Materials - **Market Cap**: Rmb49,560 million - **Current Stock Price**: HK$26.08 - **Price Target**: HK$28.60, indicating a 10% upside potential Key Financial Highlights - **3Q25 Preliminary Net Profit**: Rmb200-245 million, exceeding estimates of ~Rmb200 million, compared to Rmb77 million in 3Q24 and Rmb144 million in 2Q25 [3][2] - **9M25 Net Profit Expectation**: Rmb505-550 million, representing a year-over-year increase of 157-179% [3][2] - **Recurring Net Profit**: Rmb415-460 million for 9M25, with Rmb181-226 million in 3Q25, up from Rmb128 million in 2Q25 [3][2] - **Non-Recurring Gains**: Approximately Rmb90 million in 9M25, primarily from government subsidies, compared to Rmb108 million in the same period last year [3][2] Growth Drivers - **Earnings Growth Attribution**: - Normalization of exports, typically more profitable - Potential gross profit per ton improvement due to rising rare earth prices - Active inventory management by the company [11][4] Strategic Developments - **New Division**: Establishment of an embodied robot rotor division, with small-batch deliveries of magnets and rotors for embodied robots and products for eVTOL (electric vertical takeoff and landing) in 9M25 [10][2] - **Order Book**: Management indicated ample orders for 4Q25, suggesting strong demand [10][2] Market Conditions and Risks - **Export Controls**: Anticipated tightening of rare earth export controls may benefit JL Mag through market share gains with export permits [10][2] - **Risks to Upside**: - Faster-than-expected commencement of new capacities - Stronger downstream demand than anticipated - Rising rare earth prices [15][16] - **Risks to Downside**: - Weaker-than-expected downstream demand - Reduced dependence on rare earth magnets from China by the US and EU [15][16] Valuation and Financial Metrics - **Earnings Per Share (EPS) Estimates**: - FY 2025: Rmb0.59 - FY 2026: Rmb0.88 - FY 2027: Rmb1.18 [7][2] - **Revenue Projections**: - FY 2025: Rmb9,091 million - FY 2026: Rmb11,884 million - FY 2027: Rmb13,618 million [7][2] - **Price-to-Earnings (P/E) Ratios**: - FY 2025: 40.2 - FY 2026: 27.2 - FY 2027: 20.3 [7][2] Conclusion JL Mag Rare-Earth Co. Ltd is positioned for significant growth in the coming quarters, driven by strong earnings performance, strategic developments in new product lines, and favorable market conditions. However, potential risks related to market demand and regulatory changes should be monitored closely.