\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 48 Jl Mag Rare-Earth Co.Ltd(300748) )
Key investment points
Event: Jl Mag Rare-Earth Co.Ltd(300748) disclosed the report of the first quarter of 2022. In 2022, Q1 company achieved an operating revenue of 1.509 billion yuan, an increase of 90.17% year on year and 29.85% month on month; The net profit attributable to the shareholders of the listed company was 164 million yuan, an increase of 61.57% year-on-year and 61.18% month on month; The non net profit deducted was 152 million yuan, a year-on-year increase of 67.16% and a month on month increase of 63.32%. The company’s performance is in line with expectations.
The simultaneous rise of volume and price helped the company’s performance increase. 1) Volume: since the Baotou project of the company was put into operation at the end of the 21st year, the finished product output of neodymium iron boron magnetic steel of Q1 company was 2755 tons in 22 years, with a year-on-year increase of 7.85% and a month on month increase of 11.30%. The company used grain boundary infiltration technology to produce 1845 tons of high-performance rare earth permanent magnet products, with a year-on-year increase of 42.74%, accounting for 66.98% of the total product output of the company in the same period, an increase of 16 percentage points over the same period of the previous year; 2) Price: the product structure is optimized and the cost of rare earth is transmitted smoothly. The average sales price of Q1 magnetic products in 22 years is 548000 yuan / ton, with a year-on-year increase of + 76.44% and a month on month increase of + 16.88%; 3) The profit per ton further increased: the price of rare earth in Q1 increased significantly. The average price of praseodymium and neodymium oxide was 1.038 million yuan / ton (year-on-year + 98.69%, month on month + 30.04%), so the gross profit margin decreased to 19.37% (year-on-year -6.45 PCTs, month on month -1.94 PCTs), but the net profit per ton of finished magnetic materials increased to 60000 yuan / ton (year-on-year + 50.55%, month on month + 44.46%). Assuming that the finished product rate of magnetic materials was 70%, the net profit per ton of blank was about 42000 yuan / ton. The downstream continues to have a high boom. In the future, with the further release of the company’s production capacity, the performance is expected to accelerate the release.
The product structure continued to be optimized, and the proportion of new energy vehicles further increased. The revenue of new energy vehicles and auto parts in Q1 reached 450 million yuan (year-on-year + 256.88%, month on month + 14.80%), and the revenue of new energy vehicles increased from 15.89% to 29.82%, year-on-year + 13.93pcts; The revenue of energy-saving variable frequency air conditioning reached 403 million yuan (year-on-year + 12.72%, month on month + 27.13%), accounting for 45.02% → 26.71%, a year-on-year decrease of 18.31 PCTs; The revenue of wind power generation reached 282 million yuan (year-on-year + 46.14%, month on month 63.01%), and wind power accounted for 24.34% → 18.69%, a year-on-year decrease of 5.65 PCTs. At the same time, the company has increased large-scale mass production in 3C field, and its operating revenue in industrial energy-saving motors, energy-saving elevators and other fields has also increased significantly.
The ability of cost control has been significantly improved. Due to the decrease in the provision of equity incentive expenses and other factors, the expense rate of Q1 company in 2022 was 7.12%, down 5.52pcts year-on-year and 4.84pcts month on month. Specifically, the R & D expense ratio was 3.90%, with a year-on-year decrease of 0.19 PCTs and a month on month decrease of 1.11 PCTs; The sales expense ratio was 0.41%, with a year-on-year decrease of 0.72 PCTs and a month on month decrease of 0.28 PCTs; The management expense ratio was 2.41%, a year-on-year decrease of 2.41 PCTs and a month on month increase of 0.60 PCTs; The financial rate was 0.40%, with a year-on-year decrease of 2.20 PCTs and a month on month decrease of 4.06 PCTs.
Capacity expansion is accelerated, with a planned capacity of 40000 tons in 25 years. With the completion of Baotou phase I project, the company’s magnetic material blank production capacity has increased from 15000 to 23000 tons, and entered the production capacity release period in 22 years. The total production capacity of Ningbo magneto is expected to reach 12 Xj Electric Co.Ltd(000400) 00 tons in 2025, and the total production capacity of Baotou motor is expected to reach 25 Xj Electric Co.Ltd(000400) 00 tons in 2025.
Profit forecast and investment suggestions: we predict that the blank output of Nd-Fe-B magnetic materials in 2022 / 2023 / 2024 will be 20000 / 25000 / 30000 tons respectively, and the net profit of the company in 2022 / 2023 / 2024 will be 797 million yuan, 1033 million yuan and 1257 million yuan respectively. As of April 28, 2022, the market value was 20.7 billion yuan, corresponding to 26.0/20.1/16.5x 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.
