\u3000\u3 Guocheng Mining Co.Ltd(000688) 077 Earth-Panda Advanced Magnetic Material Co.Ltd(688077) )
Event: Earth-Panda Advanced Magnetic Material Co.Ltd(688077) disclosed the annual report of 2021. In 2021, the company realized an operating revenue of 1.655 billion yuan, a year-on-year increase of 111.54%; The net profit attributable to the shareholders of the listed company was 152 million yuan, a year-on-year increase of 191.07%. The revenue of 21q4 was 508 million yuan, an increase of 90.55% year-on-year and 20.09% month on month; The net profit attributable to the parent company was 47 million yuan, an increase of 136.19% year-on-year and 23.68% month on month; In 2021q4, the non net profit deducted was 37 million yuan, with a year-on-year increase of 344.08%. The company’s performance is in line with expectations.
The increase in both volume and price helped the company’s performance increase significantly. 1) Volume: Baotou company’s phase I project and Hefei headquarters continued to release the sintered NdFeB production capacity, and acquired Ningguo company during the reporting period. At the end of the year, the blank production capacity was 6000 tons, with a year-on-year increase of 50%, and the production capacity was released rapidly. The company’s annual sintered NdFeB permanent magnet blank output was 3955 tons, with a year-on-year increase of 44.33%, and the sales volume of NdFeB finished products was 252535 tons, with a year-on-year increase of 62.61%; 2) Price: in the past 21 years, the price of rare earth has been on the rise as a whole. Neodymium iron boron products have adopted the pricing mechanism of “gross profit margin”. The average price of neodymium iron boron products of the company in the past 21 years was 543400 yuan / ton, with a year-on-year increase of 26.21%.
The product structure was further optimized and the gross profit margin was further improved. In terms of business segments, in 2021, the company achieved revenue of 671 million yuan (YoY + 89%) in the field of industrial motors, accounting for 53.1% → 47.4%, a year-on-year decrease of 5.7 PCTs; The revenue of automobile industry reached 307 million yuan (YoY + 124.79%), accounting for 20.4% → 21.7%, an increase of 1.3 PCTs year-on-year; The revenue of consumer electronics was 301 million yuan (YoY + 85.88%), accounting for 24.2% → 21.2%, down 3.0 PCTs year-on-year. The company will continue to focus on the field of energy-saving industrial motors + new energy vehicles, and continuously optimize the product structure. The gross profit margin in 21 years is 20.51% (YoY + 2.48pcts), of which the gross profit margin in 21q4 is further increased to 22.20% (YoY + 5.60pcts, mom + 1.62pcts).
The ability of expense control was improved, and the expense rate during the period decreased by 0.81 PCTs year-on-year. In 2021, the company’s expense ratio was 11.13%, a year-on-year decrease of 0.81%. Among them, the R & D expense ratio was 5.83%, with a year-on-year increase of 1.48 PCTs; The sales expense ratio was 1.84%, with a year-on-year decrease of 0.66 PCTs; The rate of administrative expenses was 3.09%, a year-on-year decrease of 1.05 PCTs; The financial rate was 0.37% respectively, with a year-on-year decrease of 0.58pcts.
Speed up the layout of capacity expansion to meet the high economic demand. At present, Ningguo Baotou has a production capacity of 6000 tons, which is 50% higher than that of Hefei Baotou; According to the 22-year plan, the production capacity will reach 8 Tcl Technology Group Corporation(000100) 00 tons, and the 25-year production capacity is expected to reach 21000 tons (Hefei 8000 tons + Baotou 8000 tons + Ningguo 5000 tons). The CAGR of the company in 21-25 years is 36.78%.
Profit forecast and investment suggestions: it is assumed that the blank output of Nd-Fe-B magnetic materials in 2022, 2023 and 2024 will be 7000 / 11000 / 14000 tons respectively, and the net profit of the company in 2022, 2023 and 2024 will be 341, 503 and 656 million yuan respectively. As of March 21, 2022, the market value was 7.5 billion yuan, corresponding to 22 / 15 / 12x PE from 2022 to 2024, maintaining the “buy” rating of the company.
Risk warning events: price fluctuation of main products, raw material cost fluctuation, industrial policy change, project progress is less than expected, demand calculation deviation, and the risk of lag in the use of public information in the research report.
