China Northern Rare Earth (Group) High-TechLtd (SHSE:600111) - Share price, News & Analysis

Q: What is the Fair Price of 600111 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

600111 (CN¥26.56) is trading above our estimate of [[fair value]] (CN¥22.93)

600111 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	4/6
Past Performance	6/6
Financial Health	6/6
Dividends	4/6

600111 Stock Overview

China Northern Rare Earth (Group) High-Tech Co.,Ltd produces and sells rare earth raw materials in China and internationally.

Rewards

Price-To-Earnings ratio (15.4x) is below the CN market (30x)

Earnings are forecast to grow 28.33% per year

Earnings grew by 138.4% over the past year

Trading at good value vs. peer average Price-To-Earnings ratio

Trading at good value vs. industry average Price-To-Earnings ratio

Trading below our calculated fair Price-To-Earnings ratio

Analysts in good agreement that stock price will rise by 63.9%

Risk Analysis

Unstable dividend track record

China Northern Rare Earth (Group) High-TechLtd Competitors

Zhejiang Huayou CobaltLtd

SHSE:603799

CN¥102.8b

Ganfeng Lithium Group

SZSE:002460

CN¥139.9b

GEM

SZSE:002340

CN¥37.9b

Henan Shenhuo Coal & PowerLtd

SZSE:000933

CN¥37.8b

Price History & Performance

Summary of all time highs, changes and price drops for China Northern Rare Earth (Group) High-TechLtd
Historical stock prices
Current Share Price	CN¥26.56
52 Week High	CN¥57.34
52 Week Low	CN¥26.54
Beta	-0.11
1 Month Change	-11.94%
3 Month Change	-19.73%
1 Year Change	-40.01%
3 Year Change	143.00%
5 Year Change	70.80%
Change since IPO	1,991.01%

Shareholder Returns

	600111	CN Metals and Mining	CN Market
7D	-6.1%	-3.8%	-1.5%
1Y	-40.0%	-19.9%	-19.2%

Return vs Industry: 600111 underperformed the CN Metals and Mining industry which returned -19.9% over the past year.

Return vs Market: 600111 underperformed the CN Market which returned -19.2% over the past year.

Price Volatility

Is 600111's price volatile compared to industry and market?
600111 volatility
600111 Average Weekly Movement	5.2%
Metals and Mining Industry Average Movement	6.4%
Market Average Movement	5.8%
10% most volatile stocks in CN Market	9.2%
10% least volatile stocks in CN Market	3.8%

Stable Share Price: 600111 is not significantly more volatile than the rest of CN stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: 600111's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1961	9,511	Yedong Qu	https://www.reht.com

China Northern Rare Earth (Group) High-Tech Co.,Ltd produces and sells rare earth raw materials in China and internationally. It offers rare earth salts, oxides, and metals; rare earth functional materials, such as rare earth magnetic, polishing, hydrogen storage, luminescent, and catalytic materials; and rare earth products in the areas of nickel-hydrogen power batteries, rare earth permanent magnetic resonance instruments, and LED lamp beads. The company was formerly known as Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co., Ltd.

China Northern Rare Earth (Group) High-TechLtd Fundamentals Summary

How do China Northern Rare Earth (Group) High-TechLtd's earnings and revenue compare to its market cap?
600111 fundamental statistics
Market Cap	CN¥96.02b
Earnings (TTM)	CN¥6.22b
Revenue (TTM)	CN¥35.82b

15.4x

P/E Ratio

2.7x

P/S Ratio

Is 600111 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
600111 income statement (TTM)
Revenue	CN¥35.82b
Cost of Revenue	CN¥25.59b
Gross Profit	CN¥10.23b
Other Expenses	CN¥4.01b
Earnings	CN¥6.22b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.72
Gross Margin	28.57%
Net Profit Margin	17.37%
Debt/Equity Ratio	34.1%

How did 600111 perform over the long term?

See historical performance and comparison

Dividends

1.7%

Current Dividend Yield

26%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 600111 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 600111?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 600111. This is calculated by dividing 600111's market cap by their current preferred multiple.
What is 600111's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥96.02b

600111 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.8x
Enterprise Value/EBITDA	11.1x
PEG Ratio	0.5x

Price to Earnings Ratio vs Peers

How does 600111's PE Ratio compare to its peers?

600111 PE Ratio vs Peers

The above table shows the PE ratio for 600111 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	19.3x
603799 Zhejiang Huayou CobaltLtd	21.9x	37.6%	CN¥102.8b
002460 Ganfeng Lithium Group	13.6x	-0.9%	CN¥139.9b
002340 GEM	35.5x	33.7%	CN¥37.9b
000933 Henan Shenhuo Coal & PowerLtd	6x	6.1%	CN¥37.8b
600111 China Northern Rare Earth (Group) High-TechLtd	15.4x	28.3%	CN¥96.0b

Price-To-Earnings vs Peers: 600111 is good value based on its Price-To-Earnings Ratio (15.4x) compared to the peer average (19.3x).

Price to Earnings Ratio vs Industry

How does 600111's PE Ratio compare vs other companies in the CN Metals and Mining Industry?

Price-To-Earnings vs Industry: 600111 is good value based on its Price-To-Earnings Ratio (15.4x) compared to the CN Metals and Mining industry average (26.9x)

Price to Earnings Ratio vs Fair Ratio

What is 600111's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

600111 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	15.4x
Fair PE Ratio	28.9x

Price-To-Earnings vs Fair Ratio: 600111 is good value based on its Price-To-Earnings Ratio (15.4x) compared to the estimated Fair Price-To-Earnings Ratio (28.9x).

Share Price vs Fair Value

What is the Fair Price of 600111 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 600111 (CN¥26.56) is trading above our estimate of fair value (CN¥22.93)

Significantly Below Fair Value: 600111 is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is China Northern Rare Earth (Group) High-TechLtd forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

28.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 600111's forecast earnings growth (28.3% per year) is above the savings rate (3.2%).

Earnings vs Market: 600111's earnings (28.3% per year) are forecast to grow faster than the CN market (25.8% per year).

High Growth Earnings: 600111's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 600111's revenue (17.4% per year) is forecast to grow slower than the CN market (18% per year).

High Growth Revenue: 600111's revenue (17.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 600111's Return on Equity is forecast to be high in 3 years time (31.1%)

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Past Performance

How has China Northern Rare Earth (Group) High-TechLtd performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

61.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 600111 has high quality earnings.

Growing Profit Margin: 600111's current net profit margins (17.4%) are higher than last year (9.7%).

Past Earnings Growth Analysis

Earnings Trend: 600111's earnings have grown significantly by 61.9% per year over the past 5 years.

Accelerating Growth: 600111's earnings growth over the past year (138.4%) exceeds its 5-year average (61.9% per year).

Earnings vs Industry: 600111 earnings growth over the past year (138.4%) exceeded the Metals and Mining industry 7%.

Return on Equity

High ROE: 600111's Return on Equity (31.5%) is considered high.

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Financial Health

How is China Northern Rare Earth (Group) High-TechLtd's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 600111's short term assets (CN¥26.7B) exceed its short term liabilities (CN¥10.1B).

Long Term Liabilities: 600111's short term assets (CN¥26.7B) exceed its long term liabilities (CN¥3.4B).

Debt to Equity History and Analysis

Debt Level: 600111's net debt to equity ratio (0.09%) is considered satisfactory.

Reducing Debt: 600111's debt to equity ratio has reduced from 61.2% to 34.1% over the past 5 years.

Debt Coverage: 600111's debt is well covered by operating cash flow (101.8%).

Interest Coverage: 600111's interest payments on its debt are well covered by EBIT (41.8x coverage).

Balance Sheet

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Dividend

What is China Northern Rare Earth (Group) High-TechLtd current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.68%

Current Dividend Yield

Dividend Yield vs Market

China Northern Rare Earth (Group) High-TechLtd Dividend Yield vs Market

How does China Northern Rare Earth (Group) High-TechLtd dividend yield compare to the market?
Segment	Dividend Yield
Company (China Northern Rare Earth (Group) High-TechLtd)	1.7%
Market Bottom 25% (CN)	0.5%
Market Top 25% (CN)	2.2%
Industry Average (Metals and Mining)	2.9%
Analyst forecast in 3 Years (China Northern Rare Earth (Group) High-TechLtd)	2.6%

Notable Dividend: 600111's dividend (1.68%) is higher than the bottom 25% of dividend payers in the CN market (0.55%).

High Dividend: 600111's dividend (1.68%) is low compared to the top 25% of dividend payers in the CN market (2.16%).

Stability and Growth of Payments

Stable Dividend: 600111's dividend payments have been volatile in the past 10 years.

Growing Dividend: 600111's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (25.9%), 600111's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (22.9%), 600111's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.4yrs

Average management tenure

CEO

Yedong Qu (47 yo)

1.42yrs

Tenure

CN¥515,600

Compensation

Mr. Yedong Qu is the General Manager of China Northern Rare Earth (Group) High-Tech Co.,Ltd since January 28, 2021 and its Director since May 7, 2021.

Leadership Team

Experienced Management: 600111's management team is considered experienced (4.4 years average tenure).

Board Members

Experienced Board: 600111's board of directors are considered experienced (3.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

What is the ownership structure of 600111?
Owner Type	Number of Shares	Ownership Percentage
Individual Insiders	215,112	0.006%
Institutions	316,898,584	8.8%
Private Companies	1,547,019,589	42.8%
General Public	1,750,932,557	48.4%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 48.76% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
36.84%	Baotou Iron and Steel (Group) Co., Ltd.	1,331,700,569	CN¥35.4b	0%	no data
5.46%	Jia Xin Co, Ltd (HK)	197,319,020	CN¥5.2b	-2.01%	no data
0.6%	Guotai Asset Management Co., Ltd.	21,573,407	CN¥573.0m	0%	0.44%
0.52%	ICBC Credit Suisse Asset Management Co., Ltd.	18,796,765	CN¥499.2m	0%	0.33%
0.5%	Baotou Gangxing Industrial Group Co., Ltd.	18,000,000	CN¥478.1m	0%	no data
0.48%	Zhejiang Yiwu Tanzhen Investment Management Partnership Enterprise (Limited Partnership)	17,461,115	CN¥463.8m	0%	12.97%
0.38%	Invesco Great Wall Fund Management Co. Ltd	13,856,267	CN¥368.0m	0%	0.27%
0.37%	National Council for Social Security Fund	13,360,846	CN¥354.9m	38.56%	0.07%
0.36%	AEGON-Industrial Fund Management Co., Ltd.	13,048,501	CN¥346.6m	0%	0.27%
0.35%	Van Eck Associates Corporation	12,516,777	CN¥332.4m	-4.52%	0.1%
0.29%	Orient Fund Management Co. Ltd.	10,472,621	CN¥278.2m	0%	1.03%
0.29%	Huatai-PineBridge Fund Management Company Limited	10,313,284	CN¥273.9m	0%	0.26%
0.28%	China Southern Asset Management Co., Ltd.	10,156,263	CN¥269.8m	0%	0.14%
0.27%	The Vanguard Group, Inc.	9,760,833	CN¥259.2m	0.8%	no data
0.24%	Harvest Fund Management Co., Ltd.	8,703,181	CN¥231.2m	-27.01%	0.12%
0.24%	E Fund Management Co., Ltd.	8,547,598	CN¥227.0m	0.01%	0.05%
0.23%	Fullgoal Fund Management Co., Ltd.	8,493,315	CN¥225.6m	0%	0.1%
0.21%	Golden Eagle Asset Management Co. Ltd.	7,695,944	CN¥204.4m	209.4%	1.2%
0.15%	AXA SPDB Investment Managers Co. Ltd.	5,388,196	CN¥143.1m	0%	1.2%
0.13%	CITIC-Prudential Fund Management Company Ltd	4,822,955	CN¥128.1m	0%	0.42%
0.13%	Hua An Fund Management Co., Ltd.	4,636,432	CN¥123.1m	0%	0.09%
0.13%	Bank of China Investment Management Co., Ltd.	4,591,931	CN¥122.0m	0%	0.5%
0.13%	CCB Principal Asset Management Co., Ltd.	4,591,226	CN¥121.9m	0%	0.32%
0.099%	Galaxy Asset Management Company Limited	3,595,525	CN¥95.5m	0%	0.3%
0.094%	J.P. Morgan Asset Management, Inc.	3,388,745	CN¥90.0m	0%	no data

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
600111	SHSE (Shanghai Stock Exchange)	Yes	Domestic Shares	CN	CNY	Jul 2001
600111	XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)	Yes	Domestic Shares	CN	CNY	Jul 2001

Data	Last Updated (UTC time)
Company Analysis	2022/10/04 00:00
End of Day Share Price	2022/09/30 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31