FAST NEWS: JL Mag’s profit dips on volatile rare earth prices

The latest: Rare earth materials producer JL Mag Rare-Earth Co. Ltd. (6680.HK; 300748.SZ) announced on Thursday its revenue fell 15.2% to 1.62 billion yuan ($222 million) in the third quarter, while its net profit dropped 27.5% to 161 million yuan.

Looking up: The company’s total output of high-performance rare earth permanent magnets rose 15.2% year-on-year in the first nine months of 2023 to nearly 11,000 tons, as it optimized its product structure and maintained a high utilization rate.

Take Note: The company’s revenue and net profit in the first three quarters fell by 3.1% and 28%, respectively, as the rare earth permanent magnet industry was affected by unfavorable factors such as fluctuations in rare earth raw material prices and growing competition, as well as JL Mag’s own heightened R&D spending.

Digging Deeper: JL Mag is a state-owned producer of high-performance rare earth permanent magnetic materials. It was listed in Shenzhen in 2018 and completed a second listing in Hong Kong early last year. The company’s neodymium iron boron permanent magnetic materials are used in new energy vehicles, wind turbine generators and energy-saving inverter air conditioners. While the company’s revenue fell in the first three quarters of this year, four analysts polled by Yahoo Finance expect it to rebound next year by about 32% to 11.4 billion yuan.

Market Reaction: JL Mag’s shares drifted lower on Thursday morning and closed down 0.7% at HK$9.4 by the midday break. It now trades at the lower end of its 52-week range.

Translation by A. Au

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