JL Mag Rare-Earth Co Ltd Class A

300748: XSHE (CHN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	¥4.80	Kxrjftk	Hnsznxgc

JL Mag Earnings: Revenue and Profit Missed Due to Weaker Pricing; H-Shares Undervalued

Vincent Sun

Oct 26, 2023

Narrow-moat JL Mag reported disappointing third-quarter results. Revenue and net profit in the first nine months accounted for only 60% and 70% of our full-year forecast, respectively. Amid declining prices of various rare earth materials during the period, we see increasing price pressure for the company’s rare earth magnet products. As a result, revenue from new energy vehicle, or NEV, customers recorded its first year-over-year decline since 2021. With a rise in selling, general and administrative, and research expenses, third-quarter net profit dropped 27% year over year to CNY 162 million.

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