CNRE(600111) 光大证券·2025-04-23 08:46Investment Rating - The report maintains a "Buy" rating for the company, indicating a projected investment return exceeding the market benchmark by more than 15% over the next 6-12 months [5]. Core Views - The company reported a decline in revenue and net profit for 2024, primarily due to falling prices of rare earth products, despite an increase in sales volume [1][2]. - The company aims to enhance its production capabilities through a green smelting upgrade project, with a target revenue of over 37.22 billion yuan and a profit of over 2.82 billion yuan for 2025, representing a year-on-year increase of 12.9% and 53.5% respectively [2]. - The rare earth prices are currently at a low point, with expectations for a rebound due to supply constraints and increasing demand from new applications such as robotics and flying cars [3]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 32.966 billion yuan, a decrease of 1.58% year-on-year, and a net profit of 1.004 billion yuan, down 57.64% year-on-year [1]. - The average prices for key rare earth products in 2024 saw significant declines, with prices for praseodymium-neodymium oxide down by 25.99% [1]. - Despite price drops, the company reported increases in sales volumes for its main products, with rare earth oxides, salts, and metals rising by 6.07%, 19.26%, and 13.77% respectively [1]. Production and Strategic Initiatives - The company is investing up to 7.8 billion yuan in a green smelting upgrade project, expected to enhance its processing capacity significantly [2]. - The first phase of the project is set to be operational by October 15, 2024, which will improve cost control and raw material processing [2]. Market Outlook - The report anticipates a recovery in rare earth prices due to export controls and supply disruptions, with projected earnings per share (EPS) for 2025 and 2026 at 0.58 yuan and 0.89 yuan respectively, reflecting an upward revision of 7.8% and 8.0% [3]. - The global demand for praseodymium-neodymium oxide is expected to grow by 9.7% and 8.4% in 2025 and 2026, respectively, indicating a tightening supply-demand balance in the industry [3].