Thursday, October 21, 2010

Baotou Steel Rare Earth enthusiasm continues, the rare earth may continue to hold shares

 Sang Yong Liang, Cai Dingyao

countries more and more strict control of rare earth production, which decreased supply of heavy rare earth is very big. Heavy rare earth reserves the

scattered, indiscriminate digging of private source control is more difficult than the actual production plan production.

but we think that countries with heavy rare earth more and more attention, and the southern advance of the integration process heavy rare earth elements and heavy rare earth

decline in output is very big.

decline of large rare earth export quota, but within two years of foreign rare earth ore difficult to quickly return to production or production

. Tightening of export quotas in the context of rare earth industry, foreign companies fear the resumption of production or supply of new production capacity will lead to a substantial

emission. But the statistical data we see (Table 2), 2012, will not have substantial overseas production capacity of production. Abroad by the

in environmental protection, mining rates, etc., of different content of rare earth mining requires special separation of targeted mining smelting technology, because

this development cycle longer.

new energy, military and other high-tech products is rapidly growing demand for rare earth. Financial crisis of 2009 prompted new strategies

machine industry in China and the global center of economic development in the next few years, which would make the demand for rare earth

growth rate remain high. Increase in the demand environment, we determine the price of rare earth in 2011 will continue to maintain the upward trend

.

our secondary market investments in stocks of rare earth point is: Despite the current valuation levels have been high, but the rising trend will remain

. Reasons.

(1) supply and demand side will drive the price of rare earth products continue to rise in 2011.

(2) investors in the rare-earth investment ideas in this subject has reached a consensus, and the fourth quarter will also have policies or

introduced (Table 3), we expected that the investment enthusiasm before also not easy to subside.

our investment advice is: to hold stocks of rare earth to the emerging energy industry after the introduction of development planning, policies,

we recommend the order of Xiamen Tungsten, Baotou Steel Rare Earth, the color shares.

【2010-08-16】

KGI Securities Co., Ltd. Baotou Steel Rare Earth: the formation of oligopolistic industry, a substantial reduction of export quotas, prices continued to rise

Wang Zhilin

we visited last week, Baotou Steel Rare Earth (600111.SS) Company, company's main business is production and sales of rare earth products

, now has from the rare-earth mineral processing, smelting, separation,UGG boots, scientific research, deep processing of the application a complete industrial chain, is

rare earth industry leading enterprises, more than 40% of the global supply of rare earth oxides and rare earth metal.

Baotou Baotou Steel Rare Earth Bayan Obo rare earth does not own the mining rights and mineral resources, the company's rare earth ores from

iron ore beneficiation tailings Baotou Steel Group, Baotou Steel Group is currently supply company in the magnetic mine magnetic mine tailings, the agreement price

20 yuan / ton, 12 yuan / ton, including rare earth grade of 10%, 7%. In 2009, the Group's total purchases of rare earth tailings gold

amount of 4,000 million in 2009 accounted for only 4% of the parent company income statement for operating costs, operating costs 2% of the consolidated income statement, rare earth raw

Mine cost is very low.

company of rare earth oxides (REO) production capacity of 10 million tons in 2009, the company of rare earth oxides (REO) yield 5

.76 tons, 6,Discount UGG boots,328 tons of rare earth metal. 12, 2008, the company initiated the establishment of the Baotou Rare Earth International Trade Company materials and rare earth metal oxide

unified purchase and sales, Baotou Steel Rare Earth 90% of the control of the local rare earth metal oxides and, on the

rare earth market has absolute dominance in the north, the domestic rare earth prices bottom out in the first half of 2009 continued to rebound after which

of neodymium oxide prices have more than 220,000 yuan / ton, close to 24 million 08 / t high.

With the integration of the domestic rare earth industry, completely changed the situation before the disorderly competition in the industry, the basic formation of oligopolies

pattern of production through the control of rare earth rare-earth prices. 2008, global consumption of 124,000 tons of rare earth, China

consumption of 74,000 tons, 50,000 tons of international consumption. But the global supply 95-97% of rare earth in China in 2010, the domestic rare earth export quota of 30,000 tons

over the previous year by 40% quota of 50,000 tons, China will reduce the international market of rare earth export quota of rare earth < br>
a significant impact on prices, the second half of the international and domestic prices are still more rare earth upside.

domestic rare earth industry into an oligopoly industry structure in 2010, a substantial reduction of the rare earth export quota of rare earth on international

market prices have a significant impact, international and domestic rare earth prices will continue to rise. The company is the largest and the world

supplier of rare earth, rare earth supply 40% of global consumption, the company will be the biggest beneficiaries of rising prices of rare earth, rare-earth view of

current prices continue to rise, large third-quarter profit the company is still room for improvement, the proposed focus. Hong Yuan Securities Co., Ltd.

【2010-08-12】

Baotou Steel Rare Earth: RE prices are still 30-50% upside. Prospects for future demand based on judgments and analysis, we believe that 3-5 years is not

to earth to maintain 15-30% of demand growth, in order to tighten the supply and the sharp decline in export quotas

context, prices are expected to impact 2007 high point, the future is still 30-50% upside.

rare earth resources in Inner Mongolia Inner Mongolia recently issued a franchise. The introduction and implementation of the program of the company constitute

major positive, conducive to rectify and standardize the order of rare earth mineral resources development, construction supervision of rare earth resources development order

effective mechanism for long-expected move Rare Earth is bound to accelerate the pace of price increases.

involved in the strategic layout of the significance of Jiangxi. Recently the company to cash in Ganzhou, Jiangxi Province, the three separation of rare earth smelting enterprises

the equity investment, this strategy is intended to promote the consolidation and reorganization of China rare earth industry, and promote North-South joint venture to accelerate rare earth

and raise the market share of our products; the same time with the formation of Baotou rare earth region complementary

and mixed use, meaning its ambitious strategic layout.

10 years the company expects to achieve earnings per share of 0.96, to maintain In view of the future will show

rare earth industry, the sustained growth, we increased the company earnings per share in 2010 -2011

were 0.96 yuan and 1.17 yuan, the corresponding dynamic PE were 48.1 times and 39.5 times. Maintained an

Guoxin Securities Co., Ltd. 【2010-08-10】

Baotou Steel Rare Earth: Inner Mongolia and another heavy rare earth industry regulation, industry leading benefits

Peng Bo
Inner Mongolia Autonomous Region Government has re-regulation
heavy rare earth industry is significant

2005 years, according to the unified arrangements of the State Council, Inner Mongolia Autonomous Region focused on the development of rare earth and other minerals were

order to rectify and standardize , banned, closure and cancellation of a number of illegal mining, environmental pollution, waste of resources, mining, and

rare earth, tungsten, antimony total control of mineral mining practice. Bayan Obo mine formed the unity of the external rare earth resources prospecting

, unified planning and protection, unified development and utilization of a good situation, and rare earth mineral resources development order was

better. However, driven by profit, there are still some areas in the extensive operation, ultra-planned mining, heavy use of light protection,

even the exploration and exploitation of undocumented, illegal mining and other acts of stealing digging, difficult to implement macro-control measures.

earth to address the current mining of minerals such as outstanding problems, and further strengthen the development and management, on the

mid-July, the Ministry decided in this year's June to November organizations an exploration and mining of special rectification order action,

of rare earth minerals such conduct illegal and unauthorized mining concentrate on cracking down on the key areas of concentration and control, completely

to reverse the chaos in some areas situation, the development order and building long-term supervision mechanism. We believe that the Inner Mongolia Autonomous Region Government

strike out the re-regulation of rare earth industry, but also to respond positively to the call of Land and Natural Resources. It is reported that the special rule the entire

three phases: 6 months to July as the clean-up phase of the investigation notice; August to October for the punishment of the supervision of the rectification stage; November to

check Summary acceptance stage.

special work focused on investigating and resolutely ban rare earth mineral exploration and exploitation of undocumented illegal behavior; focus on the whole rare earth

governance more arbitrary order of mineral exploration and development, extensive development and utilization of mining beyond the plan The key areas and mining; Yan Su

investigated violations of laws, and maintain normal development order; a comprehensive inspection of rare earth and other mineral resources development and management of the system

degree of implementation, the practical implementation of mining indicators of overall control and supervision responsibilities and improve management of mineral resources development

water level; build long-term mechanism to optimize the development layout, to improve the rational development and utilization of mineral resources, earth and health in the north

healthy development of great significance.

br> Inner Mongolia Autonomous Region within the scope of the strategic resources of rare earth by the Baotou Iron and Steel (Group) Co., Ltd. franchise. We also

this article can be read as: From the rare earth separation capacity, the current inter Baotou Steel Rare Earth (including its subsidiaries)

outside the Bayan Obo rare earth oxide ore as raw materials to produce the rare earth separation capacity of 1 million metric tons, according to

The Inner Mongolia region

other illegal smelting capacity Baotou Steel Group is ultimately a one-time co-ordinating the management or pending against the NDRC and Baotou Steel Rare-level consultations into

then be further discussed. The resources from the rare-earth mine, in addition to the Bayan Obo rare earth and other outside resources will be included in

to Baotou Steel Group. We believe that Baotou Steel Group, Baotou Steel Rare Earth as the only platform for the development of rare earth industry, the future will be worthy representatives of the Group

the exercise of management responsibilities in the rare earth industry, do not rule out future refinancing side by Baotou Steel Rare Earth

type into the control of the group separation of rare earth mine production capacity and resources to further expand the Baotou Rare earth oxide in dilute

ability to control the market, consolidating the company in the industry's We believe that no matter what eventually adopted forms

remediation, industry leading Baotou Steel Rare Earth will undoubtedly be the biggest beneficiary of the future,

investment advice

Ganzhou signed an agreement to invest three rare earth smelting enterprises, in order to achieve a culvert within the

double-and epitaxial growth; in the rare-earth prices and expanding production capacity of external circumstances, the performance of the company is expected to hold

Continued-than-expected forecast the company in 2010 and 2012 earnings per share were: 1.04 yuan, 1.43 yuan and 1.65 yuan, with the certainty of

good growth trends. We maintain Baotou Steel Rare Earth's

Guoyuan Securities Co., Ltd. 【2010-08-10】

Baotou Steel Rare Earth: Rare Earth billions of leading, integrating the country, leading the world in

Su Lifeng
< br> North has been set, the company will continue to benefit Southern Rare Earth integration started. The company has fully implemented top-down area north to

RE monopoly, the next to look forward to integration, including Gansu Rare Earth, such as the use of lanthanocene

Baotou Rare Earth mine the integration of enterprise , has entered a substantive stage, and mineral resources with the South Jiangxi, Guangxi and other rare earth enterprises

accelerating joint reorganization efforts, and with the cooperation agreement signed by some enterprises in Jiangxi. Southern Rare Earth integration to accelerate, the company has

climate, geography, and the advantages of integration will continue to be the biggest beneficiary of Southern Rare Earth. (See August 5 The series of rare earth line

Report - trends and patterns) to reproduce the iron ore of rare earth industry oligopoly structure, the company shall

layout with pieces of the world.

ARAFURARESOURCES company in 2008 and Australia signed a memorandum of cooperation on the North Province in Australia

Nolan RE projects and experiments for rare earth separation plant technical support, and information into the world rare earth industry

line exchanges. As the earth gathered international attention, the company with the front edge and successful model line is expected to become the world's rare earth industry leader

.

volume and price go, restore profitability, achievement of billions of rare-earth leader. 2010, the company strategic objectives are: to achieve 100 billion yuan

sales; permanent magnetic materials, hydrogen storage materials, luminescent materials, polishing materials, such as the four rare-earth functional materials

fight the production of scale, variety, quality, market share in the nation. Economic achievements of billions of rare earth industry leader.

from industry trends, patterns and consider the company's core strengths, the company should enjoy the current high valuations, expected 2011EPS1

.15 yuan, the company corresponding to the current stock price approaching a reasonable level of dynamic PE Central the following . PE of 46 times the computing, the company head

price 52 yuan. Continue to maintain recommended rating.

【2010-08-05 China Securities Co., Ltd.】

Baotou Steel Rare Earth 2010 Daily News Comments: volume and price go, glory

Zhang Fang, Guo Xiaolu

volume and price go, revenue, profits hit a record high.

of the economic recovery and management efforts to increase the impact of rare earth industry, the price of rare earth products from 2009 Q4 to open

beginning of sustained, rapid recovery, maintain the strong upward momentum in the first half of this year, mainly market average price rose in excess of

100%. The operating condition improved rapidly, production and sales to enlarge. Makes the first half of the revenue volume and price go, the profit level under the historical record

year high.

cost, effective cost control, gross margin, net profit margin has increased significantly.

production scale,bailey UGG boots, the company carry out a comprehensive cost efficiency and outstanding results, consolidated gross profit margin of 42.27%, an increase of 30.92 percentage points

; net profit margin of 23.92%, while the same period last year huge losses, an increase over last year 19.69

percentage points.

the products have significantly improved the profitability of the whole, traditional rare earth oxide rare earth products, rare earth

, other rare earth compounds, rare earth carbonate profit rising faster, an increase of gross margin 25-40 percentage points. This

by product yield and relatively stable costs, earnings rose mainly due to price increases. Rare Earth Functional Materials margins 2

5.2%, an increase of 23.95 percentage points, we expect to increase production and sales of NdFeB significantly enhance the profitability of the main reasons

.

significantly reduce the quota will restrict growth in the second half of export earnings.

the first half of this year, the company export quota to 3,163 tons, an increase of 6.03%, export prices rose more than 4 times over

, so the first half of the export business has increased significantly.

export quota for 2020's second half tons, the chain, were down 36.14% year on year and 38.51 percent, according to the first half

the price level, the second half of 7200 million from export earnings, the chain , year on year decrease of approximately 36% and 61%.

magnetic materials industry chain will rapidly increase profitability.

09 year, 15,000 tons high-performance neodymium magnets put into operation a production capacity of 3,000 tons (including 1,000 tons

2000 tons NdFeB alloys and magnetic materials). Due to power shortage during the first half of this year behind schedule because of production. Currently

, magnetics customer demand, the company has received some orders, which may speed up a production capacity of production and

two production lines of the building. Optimistic estimates, this year's production is expected to reach 5,000 tons NdFeB, which in 2009 acquired three

contribution Geely production of about 3,000 tons.

March of this year, the Company and Hebei Obo rare treasure is a joint venture company for the Medical Systems Co Bo, building permanent magnet rare earth

combined magnetic resonance (MRI) project, marking the magnetics industry chain downstream companies to further expansion.

Planning capacity of 300 units, about 1000 tons NdFeB. NdFeB project a major project is the raw material necessary for the MRI.

currently still in the design phase of the project is expected to begin next year contribution to the production. Since the state of the rare earth

upstream exploration and production to implement protective policies, the company's rare earth oxides, carbon

acid rare earth and other products is unlikely that further expansion of production capacity, magnetic business will become a major source of incremental capacity,

contribution will gradually increase performance.

Ni-MH battery project into pre-production stage. Ni-MH battery

the first half of the project is still at a loss. Since last October the company started the project

technological innovation, and transformation for the production of hybrid vehicles with batteries, completed by the end of April this year, currently in pre-production stage, in need half

certified by car manufacturers, is expected to yield smaller this year, next year's earnings will change. long-term bull market in rare-earth price

pattern is difficult to shake.

rare earth materials in the application of new energy sources accounted for more than 50%, benefiting from the great development of new energy industries and the Chinese economic growth pattern by changing

bring industrial upgrading, the rare earth industry Vendors pattern is difficult to shake. Bayan Obo areas are mainly Nb - Fe - Rare Earth Ore, the company main

rare earth mine raw materials to the production of tailings from the Baotou Steel Group, the procurement of low cost and relatively stable, and thus the higher price sensitivity on the rare earth .

RE prices will lead a strong revenue and profit levels continue to rise into the orbit.

earnings forecasts and ratings.

We forecast EPS for the company 2010-2012 0.86 yuan, 1.13 yuan and 1.54 yuan, 43.30 yuan by the

closing price, corresponding to dynamic price-earnings ratio of 53 times, 40 times and 29 times . Ni-MH battery project the company still has a large

uncertainty, not consider them in this earnings forecast. Maintained an

Shenyin Securities Co., Ltd.】 【2010-08-03 Baotou Steel Rare Earth 10 years

Daily News Comments: results far exceeded expectations, raised profit forecast 30%

Ye Peipei

growth of oxides and metals prices, performance far exceeded expectations. The company announced results for first half of 2010, sales revenue

23.3 billion yuan, up 157.3 percent,Bailey UGG boots, net profit attributable to parent company 354 million, up sharply twisted

loss to profit , an increase of 626.8 percent. Up to 0.438 yuan per share, of which one quarter of the second quarter earnings 0.259, compared with the first quarter, Central

increased 75.4% compared to achieve year on year, the chain increased significantly. Major turnaround from the rare earth oxides and metal prices hold

continued to rise. The main products of cerium oxide, lanthanum oxide, neodymium spectrum prices rose 47.5%, 22.5% and

150.0%, of which neodymium oxide in the lower spectrum of the explosive growth of NdFeB magnetic materials prices, driven by particularly significant

. Mixed rare earth carbonate sub-products company, rare earth oxides, rare earth metals of main business profit margins were raised to 47

.7%, 45.9% and 41.5%, year on year respectively 25.2,32.0 and 30.0 percentage points.

performance engine of growth continued to rise from the price of rare earth and deep processing industrial chain expansion. RE prices are still affecting the core of corporate profits

variables. Trade the first half of the company Integration of the South is expected to earth and rare earth second Five-Year Plan implementation to

NdFeB permanent magnet materials and downstream expansion in the emerging field of rare earth prices will continue to open up space, rare earth prices

is expected to reach record highs. In addition, new materials in the field of industrial layout will be released in the medium and long term results, which include

projects, including nuclear magnetic resonance, polished production line (from the current 2,000 tons / year expansion to 5,000 tons / year), nickel hydride battery (

complete transformation), and 1.5 million tons NdFeB permanent magnet materials production.

raised 2010 earnings forecast by 30% to maintain overweight rating. Rare is still considering the price upside, we

increase company earnings per share 1.03/1.26/1.45 2010-2012 yuan, an increase over the previous forecast raised 30%, 3

2 % and 34%, the implied spectrum of neodymium oxide prices were 195000,230000 and 255000 yuan / ton. Corresponding to the current stock price of the PE multiple of

were 42.0/34.4/29.8 times, maintain Outperform rating.

【2010-08-03】 China International Capital Corporation Limited

Baotou Steel Rare Earth: in the first half-expected results, integrating to the south into the

Cai Hongyu

higher than expected first half results: Baotou Rare Earth 2.33 billion sales revenue in the first half, an increase of 157

%, net profit attributable to parent company 3.5 billion, earnings per share of 0.44 yuan, up sharply losses for the surplus (compared with -0.0

8 million), 0.38 yuan higher than our and market expectations of 0.34 yuan. Among them, the second-quarter earnings per share were 0.28 yuan, compared with growth in Central

75%. The company increased sales of rare earth products, prices rise is mainly due to substantial growth performance of the company is

face: rising prices of rare earth products. In the first half rose 44% rare earth carbonate, neodymium oxide, praseodymium prices rose 44% lanthanum oxide

rose 7%, up 20% cerium oxide, neodymium metal rose 43%.

gross profit margin increased significantly. In the first half gross margin reached 42%, much higher than 11% a year earlier, benefiting from rising prices of rare earth products

.

negative: Business tax and surcharges increased significantly. Mainly due to increase in value-added tax paid by the company.

operating expenses also increased significantly. Mainly due to increased product sales, transportation fees associated with selling

costs.

trends: prices will continue to lead in the second half performance of the company changes. Look forward, we expect the second half of the rare earth products

goods prices will continue to remain high, company performance over the first half will still have a certain level of growth. Jiangxi Rare Earth Separation

investment enterprises, formal involvement of the Southern Rare Earth field. The company invested 73.87 million yuan to buy the letter

abundance of Ganzhou 48% stake in the new benefit; investment 89.21 million yuan and the whole South crystal ring Ganzhou separation of rare earth co-founded the company, the new company after the establishment into

15 days to complete the whole south part of the equity transfer crystal ring, Baotou Steel Rare Earth holds a 49% equity; invested 69.34 million yuan to buy

Ganzhou 9.25% stake in the morning.

This marks the official Mairu Nan Fang Baotou Steel Rare Earth Rare Earth field. As the three downstream companies in the south are

have their own source of stability and growth potential of rare earth, equity acquisition will help strengthen the company's control over the South of resources, further steps to improve

industry influence and control.

profit forecast adjustment: the RE prices exceeded expectations, the results we expected to increase 2010,2011

years to 0.96 yuan and 1.12 yuan.

valuation and advice: Since July 20, our first concern Baotou Steel Rare Earth, the company has accumulated stock

two weeks, up 17%. We expect the company's EPS for the 10/11/12 0.96/1.12/1.26 million, corresponding to PE were 45

/ 39/34 times, 46 times the value of history, we maintain a prudent recommendation, the proposed investors active interest.

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