Lyon: raised the target price of Shenjin Permanent Magnet to HK$25 and increased the average price forecast of the products.

Lion published a report, raising the target price of Kenforce Permanent Magnet from 20 Hong Kong dollars to 25 Hong Kong dollars, and reiterating the "highly confident in outperforming the market" rating. The bank noted that domestic rare earth oxide and alloy prices rose by 11% and 10% year-on-year in the first five months this year, and adjusted the company's comprehensive average selling price assumption. It is now forecasted that the company's average selling price of products will increase by 12% and 8% in the current and next year, respectively, compared to previous forecasts of 10% and 3%. The bank pointed out that the heightened trade tensions highlight the importance of China's manufacturing of rare earth magnets, and the gradual increase in rare earth prices will benefit leading magnet manufacturers. The report also cited company management as saying that the upstream environment remains very tense, with China having only two major rare earth suppliers, and the need to increase production quotas to meet the surge in downstream demand. The bank expects that this year's domestic upstream quotas and orders from Tesla Optimus will be announced after the resolution of trade negotiations.