Event: on January 30, the company issued a forecast for 2022 results, showing an annual return net profit of about 3.5% to 450 million, an increase of 32% to 70% over the same period last year, and a deduction of non-net profit of about 3.3% to 430 million, an increase of 29% to 68%.
Production and marketing expansion + profit per ton increased slightly, and the company's performance continued to grow high. The company's 2022 return net profit is expected to be 350-450 million, the center is 400 million, + 51% compared with the same period last year. Under the background of the high prosperity of rare earth permanent magnets, the performance continues to increase rapidly. Split view: 1) the strong demand for new energy downstream and the release of production capacity lead to continuous expansion of production and marketing: in 2022, the company's overall NdFeB production capacity is operating on the basis of 16000 tons, expanding to 24000 tons at the end of the year. Considering that the company's NdFeB sales reached 7180 tons in the first half of the year, full-year sales are expected to exceed 15000 tons in the face of high demand for trams downstream, a year-on-year increase of 20% or 30% (compared with 12300 tons in 2021). 2) the profit per ton has improved: under the performance hub assumption of 400 million, the company's net profit per ton of NdFeB is expected to be about 2.9-30,000 per ton in 2022, which is about 20% higher than that of 25000 / ton in 2021, or due to many reasons. first, the proportion of trams with high profitability is higher or further improved, and the product structure continues to be optimized; second, the cost per ton of orders issued by scale effect may be reduced. Third, under the background of rising rare earth prices, the industry generally enjoys a certain inventory income-profit margin pricing method pushes up the profit per ton (but Zhenghai maintains low rare earth inventory and is expected to have less inventory income).
The company is expected to continue to sell volume, and the technology accumulation is profound, the product structure advantage is prominent. 1) homeopathic capacity expansion: the company will operate on the basis of 24000 tons of NdFeB capacity in 2023 and is expected to expand to 36000 tons by 2026. 2) profound technology accumulation: the company has three core technologies such as Zhenghai oxygen-free process, grain optimization and heavy rare earth diffusion. The coverage of 22H1 grain optimization products has reached 85%, and the coverage of heavy rare earth diffusion products has exceeded 70%, which can greatly reduce the amount of heavy rare earths. 3) better product structure: 22H1 automotive sector accounts for about 60% of revenue, of which energy saving and new energy vehicles account for 40% of the total, while tram magnets have better volume environment, profitability and favorable price ability, so the company's product structure is relatively excellent.
High-performance NdFeB continues to grow, and the head enterprise is expected to maintain its leading edge. Driven by strong demand such as trams downstream, high-performance NdFeB is one of the best growing tracks in magnetic materials, and the demand for CAGR is expected to reach 23% in 2021-25. At the same time, the domestic leader follows customer demand to expand production in an orderly manner, and it is expected that the pattern of supply and demand in the past two years is still relatively good, and the profit per ton of the head enterprise is expected to be maintained.
Profit forecast and investment advice: the company's return net profit from 2022 to 2024 is estimated to be 4.1pm 910 million. Considering the high prosperity of rare earth permanent magnets and the steady expansion of the company's production capacity, it will continue to be rated as "overweight".
Risk hints: lower-than-expected demand risk, policy change risk, supply exceeding expected risk.
