China's largest rare earth producer, China Northern Rare Earth(Group)High-Tech Co.,Ltd., released a first-quarter earnings forecast and an annual performance report for 2025 on the same day. Both documents depict a steep upward profit trajectory, highlighting a dual driving effect from the recovery in the rare earth market and improved internal operational efficiency.
The company anticipates its first-quarter 2026 net profit attributable to shareholders to be between 900 million yuan and 940 million yuan, representing a year-on-year increase of 109% to 118%. This is nearly double the approximately 431 million yuan reported in the same period last year. Net profit after deducting non-recurring gains and losses is forecasted to be between 860 million yuan and 900 million yuan, up 98% to 107% year-on-year.
For the full year of 2025, the company's net profit attributable to shareholders reached approximately 2.25 billion yuan, a surge of over 124% compared to the previous year. Total operating revenue was about 42.56 billion yuan, an increase of approximately 29% year-on-year.
The company attributed the significant first-quarter profit growth primarily to an overall strengthening rare earth market, with prices of key products trending upwards. This was combined with the effective implementation of cost-reduction, quality improvement, and efficiency enhancement measures across all business segments. Steadily increasing sales of magnetic materials, achieving full coverage of leading magnetic material enterprises, and a further increase in the market share of lanthanum-cerium products amplified the positive impact of rising prices on profitability.
**First-Quarter Net Profit Expected to Double**
According to the performance forecast released on April 13, China Northern Rare Earth expects its first-quarter 2026 net profit (attributable to shareholders) to be in the range of 900 million to 940 million yuan. This represents an increase of 470 million to 510 million yuan from the approximately 431 million yuan in the same period last year, translating to growth of 109.14% to 118.43%. This exceeds the 50% threshold that triggers a mandatory preliminary earnings announcement.
After excluding non-recurring items, the first-quarter net profit is projected to be between 860 million and 900 million yuan, a year-on-year increase of 97.76% to 106.97%. The adjusted net profit for the same period last year was approximately 435 million yuan. The highly similar growth rates of both profit metrics indicate that the current period's performance improvement is primarily driven by core operations rather than one-off gains.
The company cited an overall strengthening trend in the rare earth market and fluctuating but rising prices of major rare earth products as key reasons for the significant improvement in first-quarter performance. These factors were supported by scientific production planning, enhanced marketing efforts, and strengthened comprehensive budget management, all working together to reduce costs and improve quality and efficiency.
**Full-Year 2025: Revenue Up Nearly 30%, Profit More Than Doubles**
The annual performance report shows that China Northern Rare Earth achieved total operating revenue of approximately 42.56 billion yuan in 2025, a year-on-year increase of 29.11%. Operating profit was about 3.42 billion yuan, up 85.69% year-on-year. Net profit attributable to shareholders reached around 2.25 billion yuan, a substantial increase of 124.17% compared to the previous year. Net profit after excluding non-recurring items was approximately 2.06 billion yuan, surging 128.10% year-on-year.
Basic earnings per share were 0.6227 yuan, up 124.17% from 0.2778 yuan in the previous year. The weighted average return on equity rose to 9.56%, an increase of approximately 4.99 percentage points year-on-year. As of the end of 2025, the company's total assets stood at about 48.13 billion yuan, an increase of 6.05% from the beginning of the year. Shareholders' equity attributable to the parent company was approximately 24.66 billion yuan, up 9.94% from the start of the year, with net asset value per share at 6.8217 yuan.
The company attributed the substantial full-year performance improvement to the synergistic effects of various operational initiatives, including strengthened comprehensive budget management and promoting cost reduction across all processes, leading to a further reduction in overall processing costs compared to the previous year. Notably, for the first time in recent years, the company's annual sales of lanthanum-cerium products exceeded production, indicating significant success in inventory reduction.
**Multi-Product Line Improvements and Expanding Market Share**
Operationally, China Northern Rare Earth made specific progress across multiple product lines in the first quarter. Sales of magnetic materials grew steadily, with the company achieving full coverage of leading enterprises in the magnetic materials sector. Its supply coverage of magnetic material enterprises in the Baotou region exceeded 95%.
For lanthanum-cerium products, optimized marketing strategies, increased long-term contract ratios, and differentiated customer segmentation helped push product prices back to reasonable levels and further increased market share. The rare earth metals segment, guided by lean production principles and utilizing digital and intelligent means to strengthen on-site process management, achieved new breakthroughs in economic and technical indicators such as quality and material yield.
Sales in the high-end sector of polishing materials saw modest growth. In the rare earth permanent magnet motor systems business, the ability to serve customers continued to improve, with the contract value for a single project exceeding 10 million yuan for the first time, and application scenarios were further expanded.
**Key Projects Commissioned, Capacity Expansion Progressing Orderly**
Regarding project construction, the first phase of the Rare Earth Green Smelting Upgrade and Transformation Project has commenced production, with the production line fully operational. The main structure of the second phase's primary process workshop is complete, and internal construction and equipment procurement are currently underway.
Furthermore, mergers and acquisitions, joint ventures, partnerships, and capacity expansion projects related to the industrial chain, including rare earth metals, magnetic material alloys, magnets, and secondary resource utilization, are all progressing in an orderly manner. The company also stated that some scientific research achievement transformation projects initiated in 2025 have achieved scaled production, further enhancing production efficiency and value creation capabilities within the industrial chain. The company expects the continued advancement of these projects to support future performance growth.
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