港股概念追踪 | 国常会加大高端稀土新材料攻关 机构:稀土产业价值中枢有望抬升(附概念股)

Hong Kong stock concept tracking | The National Standing Committee will increase high-end rare earth new materials research institutions: the value center of the rare earth industry is expected to rise (with concept stocks)

Zhitong Finance ·  11/06/2023 07:45

Ping An Securities said that during the peak terminal season, demand recovery at an accelerated pace, centralized supply management, and limited growth, the value center of the rare earth industry is expected to rise. It is recommended to focus on leading companies with quotas for rare earth raw materials.

The Zhitong Finance app learned that on November 3, the National Standing Committee stated that rare earths are strategic mineral resources. It is necessary to coordinate exploration, development, utilization and standardized management of rare earth resources, coordinate industry, education, research and use, etc., actively promote research and development and application of next-generation green and efficient mining and metallurgy technology, increase research and industrialization of new high-end rare earth materials, severely crack down on illegal mining, ecological damage, etc., and focus on promoting the high-end, intelligent and green development of the rare earth industry. Ping An Securities said that during the peak terminal season, demand recovery at an accelerated pace, centralized supply management, and limited growth, the value center of the rare earth industry is expected to rise. It is recommended to focus on leading companies with quotas for rare earth raw materials. Related concept stocks: Minmetals Resources (01208), China Aluminum (02600), China Rare Earth (00769), Jinli Permanent Magnet (06680).

The China Nonferrous Metals Industry Association held the 2023 (6th) China Rare Earth Forum from November 2 to 3 in Ganzhou, Jiangxi Province. The forum will focus on hot topics such as the macro-policy of the rare earth industry, the green development and utilization of rare earth, rare earth magnetic materials and new materials and applications, the technological development frontiers of the rare earth industry chain, and the rare earth market situation and prospects.

Previously, the Ministry of Industry and Information Technology and the Ministry of Natural Resources issued the second batch of total control targets for rare earth mining, smelting and separation in 2023. The total control indicators for the second batch of rare earth mining, smelting and separation in 2023 were 120,000 tons and 115,000 tons, respectively. The total control indicators for the first two batches of rare earth mining, smelting and separation in the first two batches in 2023 were 240,000 tons and 230,000 tons, respectively. There are reserved indicators for 2023, and the number of indicators for the whole year will be finalized taking into account changes in market demand and the implementation of indicators for each rare earth group.

Shengang Securities believes that the second batch of rare earth mining, smelting, and separation indicators maintained the level of medium and heavy rare earth supply throughout the year. The growth rate of light rare earth supply is expected to provide support for rare earth prices. At the same time, more flexible supply adjustments are expected to maintain price stability, which is beneficial to downstream processing and utilization. Under expectations of demand recovery, processing enterprises in the field of downstream rare earth materials and other fields are expected to usher in a performance recovery period.

According to our understanding, rare earths are important strategic resources that are not renewable. They are an indispensable key element for transforming traditional industries, developing emerging industries, and the national defense technology industry. They are known as “universal soil.”

In the past ten years, most of the increase in the output value of the national rare earth industry has benefited from the growth of rare earth permanent magnet materials, and with the implementation of the country's “double carbon” strategy, rare earth permanent magnet materials will continue to experience explosive growth in the future.

In terms of prices, according to the China Rare Earth Industry Association, the overall rare earth price index showed a slow downward trend in October. The monthly average price index for the month was 227.3 points. The highest price index was 231.8 points on October 9, and the lowest was 222.4 points on October 31. The difference between the high and low points was 9.4 points, and the fluctuation margin was 4.1%.

In terms of exports, on October 13, according to data released by the General Administration of Customs, China's rare earth exports in September fell 17.6% compared to the previous month. Yang Jiawen, an analyst at Shanghai Metals Market (SMM), believes that the month-on-month decline in rare earth exports in September was not surprising. On the one hand, domestic demand for rare earths improved in August, driven by a wave of rare earth inventory replenishment. On the other hand, it was driven by purchases before the week-long holiday in October and concerns about reduced supply to Myanmar.

Looking at imports, with regard to the 19% year-on-year increase in rare earth imports in August, Yang Jiawen said that because continuously tightening mine environmental regulations limited the increase in domestic supply, China's rare earth mining quota this year increased by a small percentage compared to the previous year, which also limited supply growth. The volume of rare earth imports from January to September increased by 49.2% year-on-year to 134,334 tons.

CICC believes that in the long run, the era of “all electric drives” has arrived, and the rare earth permanent magnet industry has ushered in a new wave of development. The field of high efficiency and energy efficiency, led by new energy vehicles and industrial motors, is developing rapidly, and the demand CAGR for high-end magnetic materials will reach 28% from 2023 to 2025. Global oxidation errors are expected to gradually shift from excess supply and demand to scarcity, driving the performance of rare earth and magnetic materials companies to achieve steady growth.

The Guojin Securities Research Report points out that rare earth prices have stabilized, and performance has improved month-on-month. The revenue of the Q3 rare earth sector was +4% month-on-month, net profit was +57% month-on-month; the magnetic materials sector's revenue -6% month-on-month was -11% month-on-month. The growth rate of downstream demand for new energy vehicles, consumer electronics, etc. of magnetic materials slowed. In the first half of the year, rare earth prices continued to fall. Q3 basically stopped falling and stabilized, and Q3 rare earth magnetic materials companies' shipments increased month-on-month, and performance improved month-on-month, but competition among magnetic materials companies continued to intensify, and gross margin declined. The second batch of rare earth indicators has been released. As demand improves, it is expected that subsequent rare earth prices will be dominated by fluctuations. The development of emerging fields such as downstream industrial motors and humanoid robots is expected to drive continued growth in demand for NdFeB.

Related concept stocks:

Minmetals Resources (01208): The company is a core basic metal mining enterprise under China Minmetals Group. It specializes in copper-zinc ore mining and owns two world-class mining assets, the Las Bambas copper mine and the Dugald River zinc mine.

China Aluminum (02600): The company is a leading enterprise in China's aluminum industry. It is also a large-scale aluminum production and management enterprise integrating exploration and mining of bauxite, coal and other resources, production, sales, technology research and development of alumina, raw aluminum, aluminum alloy and carbon products, thermal power and new energy power generation. The company previously stated at the performance conference that as of the end of June 2023, the company held 23.94% of the shares in China Rare Earths Co., Ltd. (“China Rare Earths”).

China Rare Earths (00769): The company is a Hong Kong investment holding company mainly engaged in the manufacture and sale of rare earth and refractory products. Rare earth products include metal oxides and fluorescent products. The company's rare earth products are used in various industrial products such as modern high-tech and traditional products, such as electronic equipment, computers, motor drives, liquid crystal displays, digital video discs, permanent magnet materials, magnetic memory, optical fiber communication, superconductors, mobile phone batteries, precision optical instruments, and environmentally friendly and energy-saving products.

Jinli Permanent Magnet (06680): The company is a high-tech enterprise integrating R&D, production and sales of high-performance NdFeB permanent magnet materials. It is a leading supplier of high-performance rare earth permanent magnet materials in the fields of new energy, energy saving and environmental protection. According to Haitong International, the global market share of products in the field of rare earth materials for new energy vehicles in 2022 is about 28%, and the global market share of Jinli permanent magnet in the field of new energy vehicles is expected to increase further in 2023.

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