23H1 homing net profit is-59.86% compared with the same period last year, maintaining buying rating
The company announced semi-annual report that 23H1 realized operating income of 4.304 billion yuan (yoy-8.50%) and net profit of 163 million yuan (yoy-59.86%). 23Q2 realized operating income of 2.089 billion yuan (yoy-17.93%,qoq-5.70%) and net profit of 62 million yuan (yoy-74.27%,qoq-39.19%). Due to the lower-than-expected market demand performance in the first half of the year, we lowered the company's production and marketing forecast for the whole year, and simultaneously lowered the company's production and marketing forecast for 24-25 years. At the same time, we also lowered the company's selling price forecast according to the market price trend of rare earths. Finally, it is estimated that the 23-25 year net profit of the company will be 5.9410 million yuan (the previous value is 86527 million yuan). Comparable company Wind unanimously expects the average PE (23e) to be 21.7X. Considering that the company is a veteran leader in the industry, under the Chinese Academy of Sciences, and its production capacity continues to expand, it gives the company a 23-year 26x PE with a target price of 12.74 yuan (the previous price is 13.42 yuan) to maintain its buy rating.
Multiple factors led to a significant decline in the company's performance compared with the same period last year.
During the reporting period, the company's performance declined significantly compared with the same period last year, according to the report, mainly due to: 1) insufficient demand in some application areas of rare earth permanent magnet products due to the macro environment; 2) the company's product prices have declined, resulting in a decrease in the company's operating income; 3) the price of raw materials has declined, resulting in an increase in the impairment loss of the company's assets.
The company's production capacity is steadily expanding and gradually released according to market conditions.
According to the Investor Relations activity record Table (2023.07.13), the company plans to use the funds raised and its own funds to expand the production capacity of 10,000 tons of sintered NdFeB. At present, 5000 tons of new production capacity has been completed, and the rest of the expansion capacity will be gradually built according to the actual situation. Including the newly built production capacity mentioned above, the company now has a production capacity of 25000 tons for sintered NdFeB and 1500 tons for bonded NdFeB.
Humanoid robot policy comes out frequently, which is good for magnets for a long time.
Since the 14th five-year Plan, the central and local governments have put forward policies to support the development of humanoid robot industry. We believe that the development of humanoid robot will become a new growth point of permanent magnet demand. Take the Tesla, Inc. humanoid robot Optimus Prime as an example, no matter what kind of motor is used, the permanent magnet is essential. NdFeB has the advantages of high efficiency and low energy consumption, good control performance and strong stability, so it is a good choice. In the short term, due to the fact that the downstream demand has not significantly improved, the price of rare earths has hardly rebounded, and the downstream rare earth permanent magnet enterprises have not entered the stage of simultaneous rise in volume and price. In the long run, under the trend of carbon neutralization + electric drive + intelligence, the demand for rare earth permanent magnets in new energy vehicles, wind power, industry and other fields will continue to increase, and the new field represented by humanoid robots is expected to become a new growth point of demand for rare earth permanent magnets. We believe that rare earth permanent magnet enterprises will benefit.
Risk hint: downstream demand is lower than expected, raw material prices fluctuate sharply, and industry policy changes.