I totally agree it is all about the future never said anything different. First lets define future for me in is 6 to 18 months. If I cannot see a clear chance of improvement in 12 months I will sell and buy back when that changes.
Your statement of me banging on past is just wrong. I put out an earnings forecast for 2024 AR Right after the 2024 SAR. No one else on this board did. There use to be several people putting out forecasts a few years ago. They were all high by a lot, I assume they stopped out of embarrassment. Now I am the only one. Since 2023 SAR I have never had an error greater than 8% I was low on H2 2024 Revenue. I was High for revenues for all of 2024. Lynas keeps underperforming what I expect. So why don't you get together with some others and put out a forecast. Surly you can do better than someone as backwards as Me. Here is not only why I think Lynas SP is going down but the reasons why I think the future is not all that happy.. Please tell me what you see different and the reasons why.
Revenue is Sales price times Volume. Profit is Revenue minus cost to produce. Let's look at all three of these between now and 2025AR
Sales price NdPrO prices are way down since the highs that propelled Lynas SP to 11.56. those prices were 1100 + in April 2022. Last Friday before China shut down for a week Price was 428 RMB WV down 61% from high. Now in the month of August Prices soared. 374 to 436 on Sept 6, 5 weeks total, plus 16.6%%. Which was very good still a long way from the 800 to 900 RMB Lynas needs to support a PE of 40. at $8.00 share price, Do you know what price NdPr has to be for PE 40 at $8.00. Now September was not as good prices dropped 436 to 428 only 2% but they did drop in last 3 weeks. If you look at this holiday and Newyear's Prices they usually rise the 2 weeks before shut down as people stock up. They usually go up after as some companies restock. The 4 weeks after this shut down will be very telling of what prices will do between now and Chinese's New year.
Many believe that these prices are all Manipulation by China. I believe in the beginning this was partially China but Lack of demand is also a big part of this.
EVs producers are cutting back all over the world. BYD has so many cars stacked up in the ports in EU they can no longer ship there. Tesla sales are down 20 %. Wind generation is running into problems manly grid capacity and is falling. Tools are a bright spot with many new tools hitting the market but older tools like drills and saws are becoming saturated. It will take demand to raise prices and prices have to go up a lot. Can any one on this board show where demand will increase in time to help the 2025 AR? I only see it shrinking a little, mainly because of EVs and Wind. Here is a chart with my forecasts for last 18 months. I use the midpoint between the high and low line for my estimates They have been better than what Lynas has done for the last 4 periods because my price estimates have been high.
VolumeThis is a little harder to predict but even if Lynas does hit AL number of a NdPrO run rate of 10 KT by end of CY how much will it help if prices do not rise? If they have a straight line to 10 KT then they will ship 6 KT + 10Kt . divide 4 for 4 KT in first half. that is 1 KT more than the current rate of 3 KT for a half year. Last year they made 9 Cents while shipping 5655 Tons of NdPrO or 0.000001.6 Cents per ton 1.6 10-5 This is on page 12 of AR the numbers for total REE are there as well. You can work these out if you want but they are not as good as NdPr only. So if price does not change and AL numbers come true it will raise the profit for the half by 0.75 cents Per share. I use a book to bill delay of 90 days the Prices for FY 2024 for NDPR were 438 RMB for H! 2025 385 RMB so prices are down 12 %. Based on history and past promises by AL Like reaching next rates in 2019 and staying there I have doubts about them reaching 10 KT NdPr by end of year. Also Production fell in Q4 and AL told us in CC they Shipped 200 tons of NdPr from inventory to fulfill customers commitments. Not a good sign for fast ramp.
Cost of Sales
Al Made a very big deal of how cost of sales came down. This was misleading in that it was total cost. Not cost per ton. Cost per ton went way up! The 3 main components in cost of product are Labor, Energy and material, material is not raw REE but reagents and solvents. Last is Plant depreciations. Solvents are going up world wide. With shut down of Nickle production Sulfuric acid may go up. Labor and energy in AU are both much higher than MAL. So far they have spent 1.4 billion on CAP X. 1.4B / 20 years adds $70m per year to cost of sale. This will take about 2 years to fully hit.
In conclusion
I am sticking by my sales number for Q1 2025, 140 M . I will not do a H1 earning forecast till after the Q1 report but I doubt it will be much higher than 5 cents. All I will say about profits for the year is they will be between 7 and 16 cents and I will narrow that after the SAR. Almost all analysis are over 25 cents. I will not be swayed by this they are always high a year out then adjust strongly during last 90 days so they are not wrong
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