Northern Rare Earth profit jumps 120% as rare earth prices recover

Northern Rare Earth reported first-half net profit of 2.05 billion yuan, up 120.46% from a year earlier as rare earth prices recovered.

The rebound in rare earth prices lifted revenue and profit across the period, the company's half-year report filed Aug 19 showed.

Revenue rose 36.75% to 25.8 billion yuan, while total profit climbed 94.37% to 2.98 billion yuan. Basic earnings per share reached 0.5679 yuan, up from 0.2576 yuan a year earlier, and weighted average return on equity rose about 4 percentage points to 8.02%. Operating cash flow increased 30.57% to 1.21 billion yuan, and the asset-liability ratio edged up to 36.98% from 35.89% at the end of last year.

Behind the results, shareholder structure shifted. Zhang Jianping, who held 72.25 million shares, or 0.20%, as the fourth-largest shareholder at the end of March, had fallen out of the top ten by June 30, the report showed. The company did not disclose the timing or size of the reduction.

Controlling shareholder Baotou Steel Group held 38.03% of the company, or about 1.375 billion shares, unchanged from the prior period. Hong Kong Securities Clearing Co. and Jiaxin Ltd. ranked second and third with 2.60% and 2.59% stakes, respectively. The remaining top-ten seats were held mostly by institutions, including exchange-traded funds tracking nonferrous metals and rare earth sectors, alongside natural persons Wang Bin, with 0.85%, and Fu Xiaotong, with 0.42%.

Total assets reached 51.7 billion yuan, up 7.46% from year-end, and net assets attributable to shareholders stood at 26.3 billion yuan, up 6.46%. EBITDA interest coverage improved to 34.60 from 14.95 a year earlier, pointing to stronger debt-servicing capacity.

The profit surge reflects the recovery in rare earth prices, a strategic sector where China dominates global supply. The exit by Zhang Jianping, a prominent individual investor, may temper some enthusiasm even as the earnings beat lifts sentiment across rare earth and related materials stocks. Investors will watch second-half pricing and any further disclosure on the reduction for direction.

This article is for informational purposes only and does not constitute investment advice.