By the end of November 2021, the magnetic material plate had outperformed the benchmark index, and the performance growth and valuation improvement jointly drove the magnetic material plate market
By the end of November, the magnetic material sector had increased by 105.43% in 2021, outperforming the benchmark index of 112.34pct. The growth of main performance and the improvement of valuation jointly drive the market of magnetic material plate. The performance growth of the sector in the first three quarters supported the rise of the sector and digested the valuation. The increase in the valuation of the sector in mid November reflected that the magnetic material industry was greatly affected by the fundamental expectations caused by policies.
The policy is expected to be greatly improved, and the rare earth permanent magnet industry is expected to benefit from 2022-2023
The policy of motor energy efficiency improvement plan (2021-2023) was issued to accelerate the promotion and application of high-efficiency and energy-saving motors and promote the use of permanent magnet motors. We are optimistic about the future implementation of the policy. As an important functional material, high-performance Nd-Fe-B permanent magnet materials are widely used in high-efficiency and energy-saving rare earth permanent magnet motors. Driven by the policy, the growth space of high-performance NdFeB magnetic materials is opened. We expect that if the stock substitution demand is not considered, the growth rate of high-end NdFeB demand is expected to increase in the next two years, and CAGR is expected to reach 36% by 2025; If stock substitution is considered, it will have strong elasticity in the next two years.
The long-term growth prospect of new energy and energy-saving industry is promising, and the demand for high-performance Nd-Fe-B will maintain long-term growth in these fields
Wind power: the dual carbon national strategy raises the development space of wind power. The development trend of large-scale and large-capacity wind turbine is conducive to the penetration of permanent magnet direct drive and semi direct drive fans, which will provide space for the long-term demand growth of high-end permanent magnet materials. The significant increase in public bidding in 2021 indicates that the installed capacity of wind power will return to growth in 2022. In the long and short term, the wind power field is favorable to the demand. We expect the compound demand growth rate of global wind power for high-end Nd-Fe-B blanks to be 14.83% from 2021 to 2025.
New energy vehicles: the number of new energy vehicles has continued to increase, and the penetration of electric vehicles has been promoted by policies, enterprises and demand. China is mainly equipped with permanent magnet drive motors, and high-end Nd-Fe-B occupies the mainstream position in Shanxi Guoxin Energy Corporation Limited(600617) automotive drive motors. The global electrification trend in the automotive field also provides broad application space for magnetic drive motors. We predict that the compound demand growth rate of new energy vehicles for high-end Nd-Fe-B blanks will reach 30.68% from 2021 to 2025.
Air conditioning: with the restorative growth of household air conditioning, there is still room for demand improvement in the future. Superimposed on China's air conditioning energy efficiency policy, the penetration rate of variable frequency air conditioning has increased significantly. In the future, with the continuous increase in the proportion of high-end products such as permanent magnet variable frequency air conditioning, the demand in the field of variable frequency air conditioning will also maintain rapid growth.
Automotive EPS: high performance Nd-Fe-B permanent magnet material is the core part of EPS production. The mainstream position of Automotive EPS is difficult to be replaced, and the demand for magnetic materials is growing steadily. We predict that the compound growth rate of EPS demand for high-end Nd-Fe-B blanks will be 10.24% from 2021 to 2025
High performance Nd-Fe-B industry has high barriers, and leading enterprises have expanded their production one after another
The entry threshold of high-performance NdFeB industry is high, with technical capital barriers, certification barriers and customer stickiness barriers. The competition of low-end Nd-Fe-B products in the industry is fierce, and the high-end pattern is good. With the expansion of production of high-performance permanent magnet materials of head company, the concentration is expected to increase in the future.
Investment advice
It is suggested that the leading companies that pay attention to the downstream business with high application in the field of new energy and energy conservation, strong capacity expansion ability and certain control over raw materials in the next two years should be rated as "buy" in the industry.
Risk statement
The product price has been greatly reduced, the downstream demand growth is less than expected, the risk of policy change, and the impact of foreign supply restart.
