Global Materials | Industrials | Commodities

Rahul Jain

Thematic (Sector/Industry)

<ul>
<li>CNRE delivered strong H1 results and downstream momentum, but its valuation remains elevated even after the pullback.</li>
<li>Shenghe offers superior risk-adjusted value with cleaner pricing leverage and materially lower multiples.</li>
<li>Lynas still trades on geopolitical scarcity, not earnings strength, making it suitable only as strategic optionality.</li>
</ul>


CNRE delivered strong H1 results and downstream momentum, but its valuation remains elevated even after the pullback.
Shenghe offers superior risk-adjusted value with cleaner pricing leverage and materially lower multiples.
Lynas still trades on geopolitical scarcity, not earnings strength, making it suitable only as strategic optionality.


Rare Earths 2025: Improving Fundamentals, Limited Valuation Headroom

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>Rare earth is an important area in the US-China trade negotiation, as China processes 90% of the world's supply, and the US depends on China for 70% of its imports.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-northern-rare-earth-group-high-tech-co-ltd" target="_blank" data-smartkarma-citation="entities:13440:1" rel="noopener">China Northern Rare Earth Group High-Tech (600111 CH)</a>, <a href="https://www.smartkarma.com/entities/china-minmetals-rare-earth-co-ltd" target="_blank" data-smartkarma-citation="entities:2083:1" rel="noopener">China Minmetals Rare Earth (000831 CH)</a>, and <a href="https://www.smartkarma.com/entities/shenghe-resources-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:17058:1" rel="noopener">Shenghe Resources Holding (600392 CH)</a> are the main listed A-shares.</li>
<li>
<a href="https://www.smartkarma.com/entities/jl-mag-rare-earth-co-ltd-71612cf2-8326-48fd-8a92-d5dc0e9fa720" target="_blank" data-smartkarma-citation="entities:36201:1" rel="noopener">JL Mag Rare-Earth (6680 HK)</a> and <a href="https://www.smartkarma.com/entities/china-rare-earth-holdings-limited" target="_blank" data-smartkarma-citation="entities:12729:1" rel="noopener">China Rare Earth Holdings (769 HK)</a> are the key Hong Kong-listed ones. They all witnessed better YoY profit in the latest reported results.</li>
</ul>


Rare earth is an important area in the US-China trade negotiation, as China processes 90% of the world's supply, and the US depends on China for 70% of its imports.

China Northern Rare Earth Group High-Tech (600111 CH), China Minmetals Rare Earth (000831 CH), and Shenghe Resources Holding (600392 CH) are the main listed A-shares.

JL Mag Rare-Earth (6680 HK) and China Rare Earth Holdings (769 HK) are the key Hong Kong-listed ones. They all witnessed better YoY profit in the latest reported results.


China & HK Strategy: Rare Earths - What and How?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lianyou-metals-co-ltd" target="_blank" data-smartkarma-citation="entities:44886:1" rel="noopener">Lianyou Metals (7610 TT)</a>, <a href="https://www.smartkarma.com/entities/sanxiang-advanced-material-a" target="_blank" data-smartkarma-citation="entities:30188:1" rel="noopener">Sanxiang Advanced Material-A (603663 CH)</a> and <a href="https://www.smartkarma.com/entities/elevra-lithium-limited" target="_blank" data-smartkarma-citation="entities:1589:1" rel="noopener">Elevra Lithium (ELVR US)</a> will be added to the <a href="https://www.smartkarma.com/entities/vaneck-rare-earth-strategic-me" target="_blank" data-smartkarma-citation="entities:32320:1" rel="noopener">VanEck Rare Earth/Strategic Me (REMX US)</a> in June.</li>
<li>The constituent changes, float changes and capping changes result in an estimated one-way turnover of 9.6% and in a round-trip trade of US$840m.</li>
<li>All the adds have moved higher with huge price spikes in <a href="https://www.smartkarma.com/entities/lianyou-metals-co-ltd" target="_blank" data-smartkarma-citation="entities:44886:1" rel="noopener">Lianyou Metals (7610 TT)</a> and <a href="https://www.smartkarma.com/entities/sanxiang-advanced-material-a" target="_blank" data-smartkarma-citation="entities:30188:1" rel="noopener">Sanxiang Advanced Material-A (603663 CH)</a> recently.</li>
</ul>



Lianyou Metals (7610 TT), Sanxiang Advanced Material-A (603663 CH) and Elevra Lithium (ELVR US) will be added to the VanEck Rare Earth/Strategic Me (REMX US) in June.
The constituent changes, float changes and capping changes result in an estimated one-way turnover of 9.6% and in a round-trip trade of US$840m.
All the adds have moved higher with huge price spikes in Lianyou Metals (7610 TT) and Sanxiang Advanced Material-A (603663 CH) recently.


MV Global Rare Earth/​​​​​Strategic Metals Index Rebalance: 3 Adds and Other Changes; US$840m Trade

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back in June 2024, the Aussie Treasurer made orders requiring Singapore-based Yuxiao and four (deemed) associated investors to sell their shares in <a href="https://www.smartkarma.com/entities/northern-minerals-ltd" target="_blank" data-smartkarma-citation="entities:20445:1" rel="noopener">Northern Minerals (NTU AU)</a> within 60 days.</li>
<li>I discussed this situation in <a href="https://skr.ma/7iWo4" target="_blank" rel="noopener">Northern Minerals (NMI AU): Chinese Investors Forced To Exit</a>. One shareholder, Indian Ocean International Shipping, stonewalled, and was subsequently fined A$14mn late last year. </li>
<li>The latest news concerns Beijing-based Vastness Investment Group, Northern Minerals largest shareholder (7.7%), withdrawing its requisition to oust Adam Handley (chairman). These developments appear geared to stress-testing Aussie foreign investment.</li>
</ul>


Back in June 2024, the Aussie Treasurer made orders requiring Singapore-based Yuxiao and four (deemed) associated investors to sell their shares in Northern Minerals (NTU AU) within 60 days.
I discussed this situation in Northern Minerals (NMI AU): Chinese Investors Forced To Exit. One shareholder, Indian Ocean International Shipping, stonewalled, and was subsequently fined A$14mn late last year. 
The latest news concerns Beijing-based Vastness Investment Group, Northern Minerals largest shareholder (7.7%), withdrawing its requisition to oust Adam Handley (chairman). These developments appear geared to stress-testing Aussie foreign investment.


Northern Minerals (NTU AU): More Board Games

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zeekr-intelligent-technology-holding" target="_blank" data-smartkarma-citation="entities:36785:1" rel="noopener">ZEEKR (ZK US)</a> traded wide to the scrip terms ahead of <a href="https://www.smartkarma.com/entities/geely-automobile-holdings-ltd" target="_blank" data-smartkarma-citation="entities:127:1" rel="noopener">Geely Auto (175 HK)</a>'s EGM Vote. That was a buying opportunity. </li>
<li>A positive surprise as SAMR expediently signs off on the <a href="https://www.smartkarma.com/entities/hangzhou-kangji-medical-instrument-co-ltd" target="_blank" data-smartkarma-citation="entities:28938:1" rel="noopener">Hangzhou Kangji Medical Instrument Co., Ltd. (9997 HK)</a> transaction. This could be wrapped up before Xmas.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> comfortably clears the 50% conditional threshold into <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>; however compulsory acquisition appears out of reach</li>
</ul>



ZEEKR (ZK US) traded wide to the scrip terms ahead of Geely Auto (175 HK)'s EGM Vote. That was a buying opportunity. 
A positive surprise as SAMR expediently signs off on the Hangzhou Kangji Medical Instrument Co., Ltd. (9997 HK) transaction. This could be wrapped up before Xmas.

China Mobile (941 HK) comfortably clears the 50% conditional threshold into HKBN Ltd (1310 HK); however compulsory acquisition appears out of reach


Last Week In Event SPACE: ZEEKR/Geely, Kangji Medical, HKBN, Lynas, Huaxin Cement, Nidec

China

Shenghe Resources Holding Co Ltd engages in all types of industrial investments, including sales, integrated application and processing, technical advice in rare earth metals, sales and processing of new rare earth materials; sales in chemical materials, import and export of various goods and technology, etc.

Price Gauge
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Shenghe Resources Holding (600392 CH)

Rare Earths 2025: Improving Fundamentals, Limited Valuation Headroom

CNRE shows strong performance but high valuation; Shenghe offers better value with lower multiples; Lynas is more about geopolitical scarcity than...

Rahul Jain

China & HK Strategy: Rare Earths - What and How?

US-China trade negotiation is heavily influenced by rare earths, with China processing 90% of the global supply and the US relying on China for...

Osbert Tang, CFA

MV Global Rare Earth/Strategic Metals Index Rebalance: 3 Adds and Other Changes; US$840m Trade

There are 3 adds for REMX in June. The constituent changes, float changes and capping changes result in an estimated one-way turnover of 9.6% and...

Brian Freitas

Northern Minerals (NTU AU): More Board Games

FIRB scrutiny regarding Chinese-linked investments and board control have overshadowed Northern Minerals. I'd be surprised if further similarly...

David Blennerhassett

Last Week In Event SPACE: ZEEKR/Geely, Kangji Medical, HKBN, Lynas, Huaxin Cement, Nidec

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Rare Earths 2025: Improving Fundamentals, Limited Valuation Headroom

​CNRE shows strong performance but high valuation; Shenghe offers better value with lower multiples; Lynas is more about geopolitical scarcity than...

Rahul Jain

China & HK Strategy: Rare Earths - What and How?

​US-China trade negotiation is heavily influenced by rare earths, with China processing 90% of the global supply and the US relying on China for...

Osbert Tang, CFA

MV Global Rare Earth/​​​​​Strategic Metals Index Rebalance: 3 Adds and Other Changes; US$840m Trade

There are 3 adds for REMX in June. The constituent changes, float changes and capping changes result in an estimated one-way turnover of 9.6% and...

Brian Freitas

Northern Minerals (NTU AU): More Board Games

FIRB scrutiny regarding Chinese-linked investments and board control have overshadowed Northern Minerals. I'd be surprised if further similarly...

David Blennerhassett

Last Week In Event SPACE: ZEEKR/Geely, Kangji Medical, HKBN, Lynas, Huaxin Cement, Nidec

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

CNRE shows strong performance but high valuation; Shenghe offers better value with lower multiples; Lynas is more about geopolitical scarcity than...

US-China trade negotiation is heavily influenced by rare earths, with China processing 90% of the global supply and the US relying on China for...

MV Global Rare Earth/Strategic Metals Index Rebalance: 3 Adds and Other Changes; US$840m Trade