As the Nd-Fe-B permanent magnet material with the widest application range, the fastest development speed and the best comprehensive performance in the rare earth permanent magnet material system, it has formed a trend of competition in China.
The demand for rare earth magnetic materials has greatly exceeded expectations, and relevant listed companies are stepping up production expansion.
“Now the products are in short supply, and the workshops are working overtime. Our production capacity has been climbing, and the previously planned production capacity may be realized in advance.” Yantai Zhenghai Magnetic Material Co.Ltd(300224) (300224. SZ) the person concerned told the 21st Century Business Herald reporter on the afternoon of February 23.
In this wave of rare earth NdFeB production expansion, the latest refinancing is Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) (000970. SZ).
According to the announcement, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) plans to raise 720 million yuan through allotment, all of which will be used for the new construction, production expansion, transformation and processing projects of rare earth permanent magnet materials with a total investment of 890 million yuan.
On the evening of February 23, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) announced that its allotment was successful.
According to the calculation of the 21st Century Business Herald reporter, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) the equity placement project will add an annual production capacity of 8262.25 tons of sintered NdFeB magnet alloy blanks of various specifications, which can be processed into 5216 tons of qualified finished products.
listed companies set off a wave of production expansion
As the Nd-Fe-B permanent magnet material with the widest application range, the fastest development speed and the best comprehensive performance in the rare earth permanent magnet material system, it has formed a trend of competition in China.
“Among the major listed companies, everyone has the same production capacity now, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) will be a little more, more than 20000 tons, and others are basically at the same level.” The relevant person in charge of Ningbo Yunsheng Co.Ltd(600366) (600366. SH) told the 21st Century Business Herald reporter.
Statistics show that in the A-share market, the listed companies mainly engaged in Nd-Fe-B permanent magnet materials are Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) , Ningbo Yunsheng Co.Ltd(600366) , Yantai Zhenghai Magnetic Material Co.Ltd(300224) , Jl Mag Rare-Earth Co.Ltd(300748) (300748. SZ), Earth-Panda Advanced Magnetic Material Co.Ltd(688077) (688077. SH) and Innuovo Technology Co.Ltd(000795) (000795. SZ).
Due to strong downstream demand, the pace of production expansion of relevant listed companies is also accelerating.
“Our capacity utilization rate is ideal and has always been full capacity.” The aforementioned Yantai Zhenghai Magnetic Material Co.Ltd(300224) relevant person said, “the current production capacity is 16000 tons. It is planned to realize the production capacity of 36000 tons by 2026, but it may be realized in advance.”
The production capacity of Yantai Zhenghai Magnetic Material Co.Ltd(300224) will be 10000 tons / year by the end of 2020. The previously announced plan is to have an annual production capacity of 15000 tons by the end of 2021, but this goal has been exceeded.
“By the end of 2021, our production capacity was 12000 tons. The original goal was to complete the 7000 ton production expansion plan by the end of 2022. Now it is accelerating according to the market situation.” The relevant person in charge of the above Ningbo Yunsheng Co.Ltd(600366) disclosed that “some equipment in the 7000 ton production expansion plan has been debugged and put into production, but since the project has not been completed as a whole, it is roughly estimated that the current production capacity is 14000 to 15000 tons.”
The staff also told the 21st Century Business Herald that its Baotou project was put into operation at the end of last year and can reach full production in the second quarter of this year. At that time, the total capacity will reach 23000 tons, and it is planned to reach 40000 tons by 2025.
In addition to the production expansion plan that has been defined and is being implemented, the relevant listed companies also have medium and long-term production expansion arrangements.
“Now the prosperity is very high, the demand is increasing, and the peers are expanding production. How to meet the demand without expanding production.” The above Ningbo Yunsheng Co.Ltd(600366) relevant person in charge pointed out, “we will also expand production when it is time to expand production according to the market rhythm, and tell the market when it is determined.”
Another factor in expanding production is the improvement of capacity utilization.
Taking Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) as an example, its capacity utilization rate was 64.01% in 2020 and increased to 82.65% in the first half of 2021.
The above Jl Mag Rare-Earth Co.Ltd(300748) staff told the 21st Century Business Herald that its capacity utilization rate has been more than 95% in recent four years.
According to the public information of listed companies, it is estimated that by 2025, the total production capacity of high-performance Nd-Fe-B magnetic blank may exceed 190000 tons.
industry leaders gradually master the core technology
Although the demand for rare earth NdFeB has released great potential with the promotion of the goals of “carbon peak” and “carbon neutralization”, the profitability of listed companies is also uneven.
The 21st Century Business Herald reporter found that in terms of the gross profit margin of neodymium iron boron magnetic products of the above six listed companies in the same industry, it was Earth-Panda Advanced Magnetic Material Co.Ltd(688077) in 2018 and 2019, with the gross profit margin reaching 24.4% and 25.46% respectively, leading 24.24% of Jl Mag Rare-Earth Co.Ltd(300748) in 2020, and 29.27% of Ningbo Yunsheng Co.Ltd(600366) in the first half of 2021.
However, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) has been at the bottom. Its gross profit margin of NdFeB magnetic materials from 2018 to the first half of 2021 is 19.45%, 18.46%, 12.87% and 14.67% respectively.
In this regard, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) explained that the main reason is the comprehensive factors of customer structure and market competition.
“Each family has different starting points, and there are still obvious differences in customer structure. For example, Ningbo Yunsheng Co.Ltd(600366) electronics is more specialized, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) cars (customers) are quite many.” The aforementioned Yantai Zhenghai Magnetic Material Co.Ltd(300224) relevant person told the 21st Century Business Herald reporter.
Even with the increasing demand, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) points out that at present, the vast majority of NdFeB permanent magnet material manufacturers in China have small scale, low technical level and backward process equipment. Their products are medium and low-end products, with serious homogenization and fierce competition.
According to statistics, at present, there are more than 200 Nd-Fe-B permanent magnet manufacturers in China. However, the industrial concentration is low. The annual output of most enterprises is less than 1500 tons, and the scale of more than 10000 tons is basically listed companies, with serious polarization.
\u3000\u3000 “Most Nd-Fe-B permanent magnet manufacturing enterprises are small in scale and weak in R & D ability. Their products are mainly medium and low-end products, and their competitiveness is not strong. However, through the introduction, digestion, absorption and independent R & D of international advanced technology, the advantageous enterprises in the industry have gradually mastered the core technology for the production of medium and high-end Nd-Fe-B, the product quality has reached the international advanced level, and gradually occupy the main position in the Chinese market And continuously participate in international market competition. ” Huabao securities research report pointed out.
Therefore, the leading enterprises that stand out in the competition are accelerating to become bigger and stronger.
Combing the data of relevant listed companies, we can see that in addition to the usual capital barriers, technical and talent barriers, there is a high threshold for product certification and market presence barriers for NdFeB magnetic products.
For example, international well-known enterprises in various fields such as new energy vehicles, consumer electronics and industrial motors have high requirements for the consistency and stability of magnet products. Generally, only 1-2 defective products are allowed per million products; It usually takes more than 5 years to obtain the qualification of qualified supplier of automobile enterprises.
upstream enterprises looking for entry point
While the rare earth NdFeB industry is gradually forming a competitive pattern of leading enterprises, upstream suppliers are also looking for entry points.
21st Century Business Herald reporter noted that enterprises with rare earth mining, smelting and separation indicators, including China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) (600111. SH), Xiamen Tungsten Co.Ltd(600549) (600549. SH), are also laying out Nd-Fe-B magnetic materials.
According to the announcement in October 2021, China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) and its subsidiary Baotou Iron and steel magnetic materials jointly established a new rare earth permanent magnet business company with Advanced Technology & Materials Co.Ltd(000969) (000969. SZ), and invested in the industrialization project of rare earth permanent magnet with an annual output of 5000 tons at the proportion of 41.5%, 7.5% and 51%.
China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) said that the purpose of this cooperation is to further expand the production capacity of rare earth permanent magnets in the company’s rare earth magnetic materials industry, seize the development opportunities in new energy vehicles, wind power generation, consumer electronics and other industrial fields, enrich the product structure of rare earth permanent magnets, and improve the market share and profitability of high-end magnets, Improve the development quality and product added value of the company’s rare earth magnetic material industry.
The announcement predicts that after the above projects are completed, the normal annual sales revenue is about 1.125 billion yuan, the after tax net profit is about 70.16 million yuan, and the investment payback period of the project is about 726 years (including two-year construction period).
And Xiamen Tungsten Co.Ltd(600549) entered the field of high-end NdFeB magnetic materials earlier.
According to public information, Xiamen Tungsten Co.Ltd(600549) put into operation 3000 tons of high-end Nd-Fe-B magnetic materials in 2012.
Xiamen Tungsten Co.Ltd(600549) on March 6, 2021, it was announced that its wholly-owned subsidiary Jinlong rare earth plans to invest 423 million yuan to build a high-performance rare earth permanent magnet material project with an annual output of 4000 tons. The project is expected to reach the production capacity in 2023. After reaching the production capacity, the average annual sales revenue is expected to be 884 million yuan, the average annual after tax profit is 84.7 million yuan, and the total investment payback period is 6.92 years.
Xiamen Tungsten Co.Ltd(600549) said that by further expanding the production capacity of the company’s high-performance rare earth permanent magnet materials, the move will help the company consolidate and expand its market share and enhance the overall competition of the company’s rare earth sector.
“Rare earth suppliers have been involved in this field (NdFeB magnetic materials) for a long time, but they may specialize in the technology industry. I understand that it is not a climate.” An executive of a listed company in the field of neodymium, iron and boron told the reporter of the 21st Century Business Herald, “the market is the best test. Now the main competitors are still several listed companies specializing in neodymium, iron and boron. At present, we have not heard of the competitive pressure of rare earth suppliers on us in this regard.”
Another reason may be that the international leading enterprises represented by Hitachi Metals have mastered a number of NdFeB patents, while China has only Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) , Ningbo Yunsheng Co.Ltd(600366) , Earth-Panda Advanced Magnetic Material Co.Ltd(688077) , Advanced Technology & Materials Co.Ltd(000969) , Yantai Zhenghai Magnetic Material Co.Ltd(300224) and 8 unlisted enterprises such as Beijing magnetic materials, Jinji strong magnetic and slomag have obtained patent licenses or authorizations.
Therefore, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) points out that affected by patents, most Chinese NdFeB permanent magnet material manufacturers cannot directly export products to the international market on a large scale, and downstream customers, especially well-known enterprises, are unwilling to take the risk of using NdFeB magnets and their components without patent authorization due to legal risks.
