At present, the price of rare earth remains high, and the industrial chain is forming alliances frequently.
“Joint ventures with upstream raw material suppliers give priority to raw materials. Not only the raw materials of the joint venture, but all the raw materials of the company are guaranteed.” Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) ( Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) . SZ) the person concerned told the 21st Century Business Herald reporter on the afternoon of March 8.
According to the announcement, the new construction project of Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) Ganzhou base invested by Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) allotment is implemented by the third ring (Ganzhou) new material company jointly established by Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) and south rare earth group, with 66% and 34% shares held by both parties respectively.
The total investment scale of the project is 500 million yuan and the construction period is 3 years. It is estimated that after the completion of the project, it can produce 5000 tons of sintered NdFeB blanks of various specifications, and finally form a production capacity of 3200 tons of sintered NdFeB magnet products.
The 21st Century Business Herald reporter found that in addition to Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) , more Nd-Fe-B production enterprises have or are in deep cooperation with upstream rare earth suppliers to jointly build the golden track of rare earth industry chain in the way of mutual “binding”.
The 21st Century Business Herald reporter also noted that whether it is southern rare earth or China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) , it chooses to establish a joint venture with a listed company of Nd-Fe-B, and the partners are one of the eight authorized patent manufacturers of Hitachi Metals in China.
“marriage” to build an industrial chain track
Neodymium iron boron production enterprises cooperate closely with upstream rare earth suppliers. At present, the most common is the joint venture neodymium iron boron project company.
“20 years ago, we wanted to cooperate with southern rare earth and China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) at the same time, but we didn’t reach an agreement for various reasons and put it on hold. In the past two years, we renegotiated with southern rare earth group and reached an agreement on cooperation. China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) group hasn’t cooperated yet.” The aforementioned Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) relevant person told the 21st Century Business Herald reporter.
According to the announcement, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) and the third ring (Ganzhou) new materials company jointly established by China Southern rare earth group, the new neodymium iron boron project implemented after the project is completed can increase the annual sales revenue by 1.216 billion yuan, the total annual profit is 136 million yuan, the financial internal rate of return of the project investment is 19.27% (after income tax), and the investment payback period is 7.3 years (including the construction period of 3 years).
Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) recently also said that it plans to expand the production capacity of 10000 tons of sintered NdFeB in 2022. At present, the capacity of Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) sintered NdFeB is 20000 tons.
“It is planned to expand the production of 10000 tons of neodymium iron boron this year, including about 5000 tons with share allotment funds and about 5000 tons with other self owned funds or bank loans. It is now being done. Some of them will be put into operation this year, and it will take about one year to complete all of them.” The above Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) relevant persons disclosed.
The path of Advanced Technology & Materials Co.Ltd(000969) ( Advanced Technology & Materials Co.Ltd(000969) . SZ) is also similar to Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) .
According to the announcement in October 2021, Advanced Technology & Materials Co.Ltd(000969) and China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) ( China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) . SH) and their subsidiary Baotou Iron and steel magnetic materials invested 400 million yuan in the proportion of 41.5%, 7.5% and 51% to establish a new rare earth permanent magnet business company.
Advanced Technology & Materials Co.Ltd(000969) announcement indicates that the above joint venture plans to invest 490 million yuan in the first phase to start the implementation of high-end rare earth permanent magnet products industry construction project, which will last for about 24 months.
China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) further stated that the above-mentioned joint venture is to build a rare earth permanent magnet industrialization project with an annual output of 5000 tons. After the project is 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 7.26 years (including two-year construction period).
“At present, the company has a production capacity of 5500 tons of rare earth permanent magnet products. After establishing a joint venture with China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) to build a 10000 ton high-end rare earth permanent magnet products industry project in the 14th five year plan.” Advanced Technology & Materials Co.Ltd(000969) staff said.
Advanced Technology & Materials Co.Ltd(000969) also said that their cooperation with China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) is to give full play to their respective comparative advantages.
However, some people in the industry have put forward different views on this cooperation model.
“Cooperation with upstream suppliers will produce a good close relationship, but sometimes this cooperation will be a constraint.” A person from a Nd-Fe-B listed company told the 21st Century Business Herald reporter, “the upstream suppliers are large groups, there are many decision-making levels, and they need to be reported layer by layer, which is more troublesome.”
war investment to strengthen the supply guarantee of rare earth raw materials
In addition to “marriage”, Nd-Fe-B listed companies have also become joint-stock companies of rare earth suppliers by introducing war investment.
A typical example of this is Jl Mag Rare-Earth Co.Ltd(300748) ( Jl Mag Rare-Earth Co.Ltd(300748) . SZ, 06680. HK).
“Ganzhou rare earth group has participated in shares before our company was listed, and has not reduced its holdings so far.” Jl Mag Rare-Earth Co.Ltd(300748) relevant people told the 21st Century Business Herald, “we attach great importance to the sense of strategic cooperation with upstream supply.”
According to public data, Jl Mag Rare-Earth Co.Ltd(300748) high-performance NdFeB permanent magnet blank’s annual production capacity has increased significantly from 7000 tons in 2018 to 15000 tons in 2021. Its Baotou project was put into operation at the end of last year and is expected to reach full production in the second quarter of this year. At that time, the total production capacity will reach 23000 tons, and it is planned to reach 40000 tons by 2025.
” Jl Mag Rare-Earth Co.Ltd(300748) establish a moat at the upstream resource end to provide guarantee for capacity expansion. Ganzhou production base is located in the main rare earth production area, and the strategic investor Ganzhou rare earth affiliated south rare earth provides stable supply to the company.” Western Securities Co.Ltd(002673) research report believes that.
China Merchants Securities Co.Ltd(600999) research report also said that Jl Mag Rare-Earth Co.Ltd(300748) achieved a strong guarantee for the supply of medium heavy rare earth resources through equity cooperation with Ganzhou rare earth.
“It’s better to have this (Strategic shareholding) relationship than not.” The above Jl Mag Rare-Earth Co.Ltd(300748) related person said.
The third quarterly report of 2021 shows that Ganzhou rare earth group holds 43.2 million shares accounting for Jl Mag Rare-Earth Co.Ltd(300748) 611%.
Ganzhou rare earth group is the holding company of China Southern rare earth group, the second largest rare earth group in China, with a shareholding ratio of 94.49%. Data show that there are 67 rare earth mining warrants in China, of which 44 are owned by Ganzhou rare earth group.
Earth-Panda Advanced Magnetic Material Co.Ltd(688077) ( Earth-Panda Advanced Magnetic Material Co.Ltd(688077) . SH) also works closely with the upstream to obtain raw materials.
According to the statement of “analysis of core competitiveness” in Earth-Panda Advanced Magnetic Material Co.Ltd(688077) 2021 semi annual report, the China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) Anhui permanent magnet Co., Ltd., which is a joint venture with China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) is mainly engaged in the production of Nd-Fe-B rapid setting thin strip alloy sheet, ensuring the stable supply of rare earth raw materials for the company.
At present, this way of cooperation to ensure the supply of rare earth raw materials continues to deepen.
According to the announcement on August 31, 2021, Earth-Panda Advanced Magnetic Material Co.Ltd(688077) increased the capital of China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) Anhui permanent magnet by 36.144 million yuan in cash and China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) increased the capital of 54.216 million yuan in cash. The proportion of 40% and 60% shares held by both parties remains unchanged.
According to the announcement, all the capital increase will be used to build the “project of high-performance Nd-Fe-B alloy sheet with an annual output of 8000 tons” Earth-Panda Advanced Magnetic Material Co.Ltd(688077) said that the purpose of this investment is to deepen the division of labor and cooperation between the company and China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) Anhui permanent magnet, give play to their respective advantages and industrial coordination, and continue to improve the industrial layout and ensure the supply of rare earth raw materials through this investment while obtaining investment income.
“The joint venture ( China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) Anhui permanent magnet) is to provide Earth-Panda Advanced Magnetic Material Co.Ltd(688077) with raw materials for permanent magnet products.” Earth-Panda Advanced Magnetic Material Co.Ltd(688077) staff told the 21st Century Business Herald reporter.
The main raw material for the production of Nd-Fe-B is the sintering of Nd-Fe-B, which is also known as the raw material of Nd-Fe-B.
