|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
Column 8 |
| 1 |
Company Name |
Mkt Cap ($M RMB) |
Mkt Cap ($B, AUD) |
Revenue ($M RMB) |
Revenue ($B, AUD) |
PE Ratio |
Production Target for 2018 (Tonnes REO) |
Production 2017 (Tonnes REO) |
| 2 |
五矿稀土 |
10485 |
2.1 |
715.0 |
0.14 |
207 |
|
3442 |
| 3 |
北方稀土 |
38510 |
7.6 |
10203.9 |
2.01 |
88 |
22500 |
22500 |
| 4 |
广晟有色 |
7862 |
1.6 |
5495.0 |
1.08 |
353 |
|
4828 |
I did some research into China's rare earth listed companies. There are 6 big companies under which China wants to consolidate its rare earth production. This sample of 3 are the ones that I believe are more representative of "pure rare earth producers" (although the 3rd one on the list produces some uranium as well).
First thing I've observed is that the net profits of these companies are small compared to their market cap, which results in their PE Ratios being extraordinarily high. If Lynas is valued on the same PE Ratios, we would probably be looking at least at $3+Billion Mkt Cap company (double today's share price essentially) with a ~$45M Net Profit that I estimate for FY18.
From a production volume perspective, the 2nd company is the one that is similar in magnitude as Lynas. It's trading at a whopping $7.6Bln Mkt Cap, i.e. 5 times Lynas' market cap now! I'll be happy to meet in the middle, i.e. Lynas share price to go up 2.5 times from now.
You guys can do more research on these companies if you want..but at least, what I can see is either the market participants there are factoring in much higher rare earth prices to come, or they think that rare earth companies should trade at these extraordinary valuations, either of which continues to show us that Lynas as compared to its other global peers is
significantly undervalued.
(20min delay)