21H1's net profit increased by 28.1% over the same period last year, maintaining the "overweight" rating. On August 25, the company disclosed that 21H1 realized operating income of 392 million yuan, an increase of 36.1% over the same period last year, and realized net profit of 97 million yuan, an increase of 28.1% over the same period last year, of which 21Q2 revenue was 210 million yuan (qoq+13.9%) and net profit was 52 million yuan (qoq+14.8%). We estimate that the EPS of the company in 21-23 is 0.59, 0.61, 0.63 yuan (before 0.47, 0.50, 0.53), and the average PE (2021E) of the comparable company is 52.8 times. Since the application range of the company's main products bonded NdFeB is more limited than that of sintered NdFeB, we give a certain valuation discount, giving the company 49 times PE (2021E), EPS (2021E) 0.59 yuan, corresponding to the target price of 28.91 yuan (previous value 18.52 yuan). Maintain the overweight rating.
The increase in revenue of magnets for energy-saving motors and the steady improvement of the company's profitability during the reporting period, the increase in revenue was mainly due to a significant increase in sales revenue of magnets for energy-efficient motors compared with the same period last year. The increase in sales revenue of automotive magnets also contributed. According to Asia Metal Network, the price of praseodymium neodymium oxide / dysprosium oxide, an important rare earth raw material of 21H1, rose 16.3% and 17% respectively, but by strengthening cost control and optimizing product structure, the company earned 363 million yuan (yoy+34.7%) from bonded NdFeB magnets during the reporting period, with a gross profit margin of 37.8%, an increase of 0.95pct over the same period last year, and an improvement in profitability. As of Q1 in 21, the outstanding orders of bonded NdFeB magnets / hot-pressed NdFeB magnets / samarium cobalt magnets reached 100% completion rate in Q2, and the completion rates of new orders in Q2 reached 90.5%, 48.4% and 93.8% respectively.
During the reporting period, the company's product structure was continuously adjusted to meet the needs of downstream changes, part of the equipment originally intended for the production of hard disk magnets was used for the production of automotive magnets, so the benefit of the high-performance automotive magnet expansion project far exceeded expectations, and the benefit of the hard disk magnet expansion project did not meet the expectations. The company's samarium cobalt magnet project / hot pressing magnet project / neodymium iron boron microcrystalline magnetic powder production project achieved benefits of 217.4max 80.9x12.995 million respectively, of which the samarium cobalt magnet and hot pressing magnet self-research project is still in the initial stage of production, with the gradual solution of technology, process, equipment automation transformation and other problems, the production capacity is expected to increase.
During the period of the company, the expense rate increased 1.67pct compared with the same period last year, in which the sales / management / finance / R & D expense rate changed respectively from the same period last year-1.92pct/0.86pct/3.19pct/-0.46pct.
The company operates steadily and maintains its "overweight" rating.
In view of the considerable demand for downstream magnets of the company and the good performance of the company's magnetic materials business, we raise our product selling prices and sales forecasts, and estimate the 21-23 net profit of return to the home of 1.89 billion yuan 1.96 million million (the previous value is 1.53 million 1.61 million yuan). In view of the fact that the application range of the company's main products bonded NdFeB is more limited than that of sintered NdFeB, we give a certain valuation discount and give the company 49 times PE (2021E), EPS (2021E) 0.59 yuan, corresponding to the target price of 28.91 yuan (the previous value is 18.52 yuan), to maintain the "holding increase" rating.
Risk tips: rare earth prices fluctuate sharply, the downstream of the product is depressed, and the production and research of new products is lower than expected.
