JL Mag Earnings: Falling Rare Earth Prices Led to Revenue and Gross Margin Miss

JL Mag reported disappointing fourth-quarter results, with both revenue and net profit below our expectations. Amid extended price drops in various rare earth materials, gross margin edged down 4 percentage points sequentially, ending the recovery trend witnessed in the first three quarters. We have seen increasing price pressure for the company’s rare earth magnet products during the quarter. With the increase in selling, administrative, and research expenses, fourth-quarter net profit dropped 57% quarter over quarter to merely CNY 69 million.