CNRE: Expected net profit in 2025 to increase by 116.67% to 134.60% year-on-year

On January 17, China Northern Rare Earth (Group) High-Tech Co., Ltd. released a performance forecast for 2025, indicating that the net profit of this rare earth leader is expected to double. According to the announcement, Northern Rare Earth expects to achieve a net profit attributable to shareholders of 2.176 billion to 2.356 billion yuan in 2025. Compared to the approximately 1.004 billion yuan in the same period of 2024, this represents an increase of 116.67% to 134.60%. The net profit excluding non-recurring gains and losses, which better reflects the core business's "blood-making" ability, is also impressive, expected to reach 1.960 billion to 2.140 billion yuan, with a year-on-year increase of up to 137.43%. This explosive data is partly due to the relatively low base in the same period last year and partly validates the company's resilience in the face of a complex market environment. It is noteworthy that this profit scale was achieved against the backdrop of price fluctuations and supply-demand games across the industry, suggesting a qualitative change in its internal operational efficiency. Core Expectation Difference: Is Lanthanum and Cerium "Sales Greater than Production," and Has the Inventory Decrease Point Arrived? Among the information in the announcement, the most surprising to the market and the most valuable for interpretation is: For the first time in recent years, annual sales of lanthanum and cerium products have exceeded production, and the inventory digestion effect of lanthanum and cerium products is significant. For a long time, lanthanum and cerium, as "by-product" commodities in light rare earths, have often faced serious supply surplus and inventory backlog issues, occupying a large amount of capital and dragging down overall gross profit. Northern Rare Earth's clear statement of "sales greater than production" means: The downstream demand structure may have changed, or the company has found new avenues in its marketing strategy for low-end products; Cash flow conditions will improve, and the chronic problem of inventory backlog is being cured. Cost Reduction Logic: Cost Pressure Behind the "Five Unifications" In addition to revenue growth, extreme cost compression on the cost side is another major contributor to profit. The "Five Unifications" (unified development planning, unified technology sharing, unified production planning, unified raw material supply, unified collaborative maintenance) mentioned repeatedly in the announcement represents a scientific production organization model, which is essentially a deep internal management reform. Through this highly centralized management, Northern Rare Earth has successfully achieved "further reduction in processing full costs year-on-year." Capital Expenditure and Industry Chain Extension: Not Just Selling "Earth" Northern Rare Earth is attempting to shed the label of merely "selling resources" and accelerate its entry into high value-added downstream sectors. In 2025, a series of capital expenditure projects by the company will begin to bear fruit: New generation rare earth green smelting upgrade and transformation project: Phase one production line is fully connected, and phase two has commenced. This directly relates to the capacity utilization limit under environmental compliance. Downstream deep processing: Subsidiary Northern Magnetic Materials' 50,000-ton magnetic material alloy phase one project and Northern Zhaobao's 3,000-ton magnet project have been completed and put into operation. This means that Northern Rare Earth is transforming its upstream resource advantages into downstream manufacturing advantages. The growth in production and sales across the entire industry chain, from smelting separation, rare earth metals to rare earth functional materials and permanent magnet motors, proves the effectiveness of this vertical integration strategy