23H1 has a net profit of 103 million yuan, maintaining its "hold" rating.
The company's 23H1 realized revenue of 419 million yuan (yoy-14.33%) and net profit of 103 million yuan (yoy+15.75%); 23Q2 realized revenue of 214 million yuan (yoy-21.95%,qoq+4.69%) and net profit of 53 million yuan (yoy+1.13%,qoq+6.31%). We maintain the performance forecast and expect the company to have an EPS of 0.62, 0.65 and 0.71 yuan in 2023-2025, which is comparable to the average PE (23e) of 24.4X expected by the company's Wind. The company is a bonded NdFeB magnet faucet, giving the company a 2023 26.8XPE with a target price of 16.52 yuan and maintaining a rating.
The cost drop is greater than the selling price, and the profitability of 23H1 is enhanced.
Business income mainly comes from bonded magnets (including bonded NdFeB magnets and injection magnets), hot-pressed magnets and samarium cobalt magnets. 23H1 revenue fell 14.33% year-on-year, mainly because the average sales price of products decreased, but because the unit cost of raw materials decreased more than the average product sales price, the company's gross profit margin and net profit margin increased by 7.18pct and 6.31pct to 35.67% and 24.65% respectively. The net profit of homing increased by 15.75% over the same period last year.
The company adopted the strategy of "adjustment, contraction and integration" and paid attention to the product and technology upgrading company adopted the strategy of "adjustment, contraction and integration" to the strategy and business, transferred the entire equity of Leshan Yinhe Yuantong Magnetic Powder Co., Ltd., and transferred its business to a wholly-owned subsidiary, further optimized the industrial layout and resource allocation, and improved the efficiency. The company will give full play to the internal force of independent research and development, independent innovation, further improve the level of equipment automation, and further optimize the mass production process of new products.
The main direction of research and development is the product areas with great growth potential and technology upgrading, such as automotive magnets, energy-saving household appliances, high-efficiency motor magnets; technology is mainly automation, intelligent research and development fields.
The company improves the efficiency of production line and continues to expand production through technological innovation.
Through the continuous transformation of equipment automation and the improvement of production line efficiency, the company has an annual production capacity of more than 4000 tons of bonded magnets and 300 tons of hot-pressed magnets. The annual production capacity of samarium cobalt magnet, a wholly owned subsidiary of the company, is more than 200 tons; the production capacity of injection molding magnet is under construction. The project under construction is the construction of Chengdu Silver Magnetic material Co., Ltd., a wholly-owned subsidiary (the company will build a wholly-owned subsidiary with its own capital of 300 million yuan). Engaged in rare earth permanent magnet materials and other new materials, rare earth permanent magnet products research, development, production and sales.
Risk hint: in the case of iterative technology, applications such as new energy vehicles use other magnetic materials to replace NdFeB magnets; downstream demand is lower than expected.