Baotou Bayanobo Mine is an associated mine of iron ore and rare earth elements, which contains seven rare earth elements such as cerium, lanthanum, praseodymium, neodymium, europium and niobium. Because it is an associated mine, most of the mining costs are accounted for in iron ore. The prices of high-intensity magnetic middling and high-intensity magnetic tailings sold by the Group to listed companies are relatively low, which are 20 yuan/ton and 65,438+02 yuan/ton respectively, and the rare earth-rich grades are 65,438+00% and 7% respectively. The sales agreement signed once every three years continues to 20 1 1 year, and it is unlikely to renew the price increase. It can be said that the company is essentially a rare earth resource enterprise, and the cost of purchasing the rare earth tailings of the group company is low.
The annual production capacity of the concentrator is 250,000 tons/year, producing 45-50% grade rare earth concentrate, about 10 tons is equivalent to REO tons. The concentrate sold by the company is equivalent to 550,000-60,000 tons of REO, and the rest will enter the concentrate reserve project. The company plans to start a 300,000-ton (concentrate) reserve project, aiming at curbing the enthusiasm for mining at home and abroad and stabilizing the price of rare earths. In addition, the company plans to establish an oxide storage project, which has been approved. The project will use 3 billion yuan to store 80,000 tons of oxides in two years. Reserve products will further control the market supply and circulation, and the reserve quantity is large, which is of far-reaching significance for improving the relationship between supply and demand in the market.
2.ITC's channel control has become stronger, and the integration of rare earths in the north has played a role.
The sales model of the company's products has gone through four stages. Before 2006, the company directly provided rare earth concentrates to local enterprises and private enterprises, and then separated them into oxides and sold them to downstream customers. In 2006, the total amount was controlled, and in 2007, "barter trade" was implemented, that is, 100 tons of rare earth oxides were returned to the separation enterprises, and the remaining products were sold by the production enterprises themselves. In 2008, the company controlled Inner Mongolia Baotou Steel Hefa Rare Earth Co., Ltd., and jointly established an international trading company with its subsidiaries, smelting separation application enterprises and Inner Mongolia Gaoxin Holdings Co., Ltd., and implemented unified purchase and marketing to sell rare earth minerals to members of the international trading company, on the condition that all the separated oxides must be sold to international trading companies, which will uniformly sell them. At present, ITC has a strong channel control in the northern region, with the market share of cerium oxide products reaching 90% and praseodymium neodymium oxide reaching 50-60%. At the beginning of 2009, the establishment of the International Trade Company promptly curbed the decline of oxide products, and the prices of rare earth products began to bottom out. The price of praseodymium neodymium oxide rose from 80,000 yuan at that time to 654.38+0.8 million yuan/ton.
3, deep processing industry chain to broaden the future performance growth potential.
The company has industrial layout in the field of new materials, including Inner Mongolia Xi 'ao Ni-MH battery polar plate Co., Ltd. and Inner Mongolia Xi 'ao Ni-MH power battery Co., Ltd., which is the largest Ni-MH power battery manufacturer in China. Tianjiao Mei Qing, Zhongshan Tianjiao, Beijing Sanjili and Jing Rui are the "deep processing" links in the company's industrial chain, and will focus on developing high-quality and high-value-added industrial chains such as NdFeB, phosphor powder, polishing powder and hydrogen storage alloy powder. We know that the polishing production line will be expanded from 2000 tons/year to 5000 tons/year. Inner Mongolia Xi Aoke Ni-MH Power Battery Company has 700 D-type power batteries or 654.38+0 million C-type power batteries, and is undergoing technical transformation. It is expected to be completed in 2065, 438+00, and converted into electric vehicle batteries. 15000 tons/year NdFeB magnetic material production line can produce 3000 tons, mainly NdFeB alloy materials, which will expand rapidly after the demand market opens. In addition, the nuclear magnetic resonance project will be completed by the end of this year, reaching 300 sets/year in 20 1 1 year. After the sales channels are improved, they can gradually contribute to the company's performance.
In the field of demand segmentation, there will be a trend of stable traditional fields and explosive growth in emerging fields. Besides being widely used in traditional fields such as glass decolorization, petroleum catalytic cracking, ceramic pigments, polishing powder, etc. It has developed rapidly in the fields of nickel-hydrogen batteries, new motors, aerospace and so on, among which NdFeB permanent magnet materials are the most prominent. We elaborated the application fields of NdFeB permanent magnet materials in the "Deep Research Report on Rare Earth Permanent Magnet Materials" released on April 6th, 20 10. Catalysts such as new energy and new technologies will continue to open up the upside of rare earth prices.
4. There is still room for mining rights in the south, and the integration of domestic superior resources is ready.
Through investigation, we know that the integration of rare earths in the north led by Baotou Steel has begun to take shape, and the breakthrough of industry integration in the future will be concentrated in the south, especially in Sichuan, Jiangxi and Guangdong. There has been a breakthrough in the integration of the southern region, including 88 mining rights in Ganzhou, Jiangxi Province, and gradually concentrated in one enterprise. Guangdong Guangsheng Group has obtained three mining licenses, and the integration of resources in Sichuan Province is progressing rapidly. The rare earth resources controlled by Jiangtong Group are gradually being mass-produced. Although the reserves of rare earths in South China only account for 20%, it is of great strategic significance (including dysprosium, terbium and other heavy rare earths) and accounts for a large proportion of output (close to 40%), so the integration of rare earths in South China has a far-reaching impact on the whole country. In addition, the Ministry of Industry and Information Technology, the Ministry of Mineral Resources and the Ministry of Commerce have gradually introduced measures to accelerate industry concentration, including delaying the approval of mining rights of new mines, restricting exports, supporting enterprise integration, improving environmental protection standards of separation plants, and adjusting tariffs. As far as we know, "09- 1 1 Official Draft of Rare Earth Industry Planning" and "Access Conditions for Rare Earth Industry" will be promulgated gradually, and rare earth industry associations are also actively preparing.
5. There is still room for upward adjustment of profit forecast, and the overweight rating will be maintained.
We believe that there is still room for upward adjustment of future income, mainly because: 1. Catalysts for industry integration will continue to be introduced to activate rare earth prices. Including the aforementioned "2009-20 15 Official Draft of Rare Earth Industry Development Plan" and "Rare Earth Industry Access Conditions", the implementation of rare earth resources reserve for enterprises will also stabilize the market price. 2. Low-carbon economy explodes the demand space of new rare earth materials and opens the upward range of medium and long-term prices. 3. As the leader of domestic superior resources, the company has stronger control over resources and stronger motivation to release performance. Based on various analysis assumptions, we maintain the company's profit forecast of 20 10-20 12 at 0.80/0.96/ 1.08 yuan. The company's performance is full of elasticity to the rise of rare earth prices. Under the neutral hypothesis, the dynamic PE of the stock price is 44.6/37.2/33.0 times, while under the optimistic hypothesis (the current price rises by 20%), the earnings per share will increase by 0.33/0.29/0.50 yuan, and the corresponding PE level is 3 1.5/28.5/22.5 times.