\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 48 Jl Mag Rare-Earth Co.Ltd(300748) )
Event: on March 31, 2022, the company released its 2021 annual report. In 2021, the company achieved a revenue of 4.08 billion yuan, a year-on-year increase of 68.8%; The net profit attributable to the parent company was 453 million yuan, a year-on-year increase of 85.3%; Net profit deducted from non parent company was RMB 423 million, with a year-on-year increase of 86.4%. In 2021q4, the company achieved a revenue of 1.162 billion yuan, an increase of 45% year-on-year and 4.7% month on month; The net profit attributable to the parent company was 102 million yuan, an increase of 10.7% year-on-year and a decrease of 22.5% month on month; Net profit deducted from non parent company was 93 million yuan, with a year-on-year increase of 9.8% and a month on month decrease of 25.3%. The performance is in line with our expectations.
In 2021, the company continued to make efforts in the fields of new energy vehicles and auto parts, energy-saving variable frequency air conditioning and wind power generation. At the same time, the company actively laid out new energy and energy-saving environmental protection fields such as energy-saving elevators, 3C, industrial energy-saving motors and rail transit, with outstanding competitive advantages and outstanding achievements. The company achieved revenue of 1.051 billion yuan in the field of new energy vehicles and auto parts, with a year-on-year increase of 222.73%; In the field of energy-saving variable frequency air conditioning, the revenue was 1.4 billion yuan, a year-on-year increase of 59.41%; In the field of wind power generation, the revenue reached 887 million yuan, a year-on-year increase of 1%.
In 2021, the volume and price of magnetic materials business increased simultaneously, and the company achieved a net profit of 453 million yuan, the best performance in history. Volume: in 2021, the finished product output of NdFeB magnetic steel was about 10300 tons, with a year-on-year increase of 7.41%, and the sales volume was about 10700 tons, with a year-on-year increase of 21.44%. In 2021, the company used grain boundary infiltration technology to produce 6064 tons of high-performance rare earth permanent magnet products, with a year-on-year increase of 47.51%, accounting for 58.73% of the company’s total product output in the same period, with a year-on-year increase of 16pct; Among them, the ultra-high grade products are about 3437 tons, accounting for 56.68% of the high-performance permanent magnet products penetrated by grain boundaries. Price and cost: the rise of raw materials increased the single ton sales cost of the company’s neodymium iron boron magnetic products by 59.13% to 43000 yuan / ton, the single ton sales price also increased by 26.2% to 543000 yuan / ton, and the single ton gross profit decreased by 18.24% to 64700 yuan / ton.
The first a + H listed company in the magnetic material industry will accelerate the expansion of secondary listing, and the long-term magnetic material production capacity will reach 40000 tons. On January 14, 2022, the company was listed on the main board of the Hong Kong stock exchange. According to the company’s announcement, the proceeds from the global offering are about HK $4.241 billion, and the funds raised are mainly used for: 1) about 35% of them are used for the construction of Ningbo production base; 2) About 25% is used for potential acquisitions to expand the layout of the industrial chain; 3) About 20% for R & D purposes; 4) About 10% is used to repay the construction loan of Baotou production base project; 5) About 10% is used for working capital and general corporate purposes. In 2021, the company’s production capacity of sintered Nd-Fe-B permanent magnet material blank will be 15000 tons. With the production of projects under construction, the company’s production capacity is planned to reach 40000 tons by the end of the 14th five year plan, including 17000 tons / year in Ganzhou, 20000 tons / year in Baotou, 3000 tons / year in Ningbo. The production capacity CAGR from 2021 to 2025 will reach 41.67%.
Investment suggestion: with the gradual promotion of the company’s projects in Ganzhou, Baotou and Ningbo bases, the production capacity gradually reaches the production capacity, and the product growth curve of the company is clear. We expect that the company will realize net profit attributable to the parent company of 668 million yuan, 895 million yuan and 1088 million yuan from 2022 to 2024, with EPS of 0.80 yuan, 1.07 yuan and 1.30 yuan respectively. The PE corresponding to the closing price on April 6 is 39, 29 and 24 times respectively, maintaining the “recommended” rating.
Risk tip: the processing fee fell, the capacity release was less than expected, and the demand growth was less than expected.
