The company released its 2023 annual report and 2024 quarterly report
In 2023, the company's revenue was 5.369 billion yuan, -16.23% year-on-year; net profit attributable to mother - 227 million yuan, net profit not attributable to mother - 210 million yuan, which changed from profit to loss. Among them, 23Q4 revenue was 1,346 million yuan, -4.37% year-on-year, and +0.59% month-on-month; net profit to mother was 0.19.5 million yuan, net profit not attributable to mother was 0.037 million yuan, which was converted from loss to profit.
The 24Q1 company's revenue was 1,026 million yuan, -28.25% year-on-year, -23.76% month-on-month; net profit attributable to mother was 431,500 yuan, after deducting non-return net profit of 6.8694 million yuan.
Reduced rare earth prices dragged down performance, and Q2 is expected to improve
Price: 23Q3/23Q4/24Q1 The average price of praseodymium oxide was 48.6/49.0/382,000 yuan/ton, respectively, +0.8%/+1%/-22% month-on-month, respectively. As of April 30, Q2 praseodymium oxide had rebounded from 354,000 yuan/ton to 404,000 yuan/ton, an increase of 14%. Q2 The rebound in raw material prices is expected to boost downstream procurement intentions, which will help improve the company's performance.
Revenue: In '23, the company's revenue for NdFeB products was 4.676 billion yuan, -13.81% year-on-year. Among them, sales revenue from supplying NdFeB permanent magnet materials in the form of magnetic components was 142 million yuan. In '23, the company sold 10,788 tons of finished products, +12.22% year-on-year. The 24Q1 company's main business revenue was 948 million yuan, -23.86% year-on-year. The drop in rare earth prices affected product prices, profit performance and downstream procurement enthusiasm. In addition, Q1 is a low season for downstream demand, and industry demand is generally weak, which is also a drag on sales.
Downstream structure: In '23, the company's sales revenue in new energy vehicles/consumer electronics/industry and other fields was 18.32/11.02/1,742 billion yuan respectively, accounting for 39.2%/23.6%/37.3% of NdFeB product revenue, respectively. In 24Q1, revenue in the three areas was 4.01/1.88/359 million yuan respectively, accounting for 42.3%/19.8%/37.9% of NdFeB product revenue.
Fund-raising projects postponed, optimistic about long-term demand
The company currently has a production capacity of 21,000 tons/year of NdFeB billets. According to the company's “Notice Concerning the Postponement of Capital Raising Investment Projects”, due to cyclical adjustments in the industry and increased market competition, the company postponed 15,000 tons of fund-raising production capacity in Baotou, and delayed the expected commissioning period from April '24 to start production of 5,000 tons in June '25, and the remaining production capacity was put into operation in June '26.
In the field of new energy vehicles, the company continues to consolidate its position as a mainstream supplier in the domestic and foreign NEV market. It has 1.8 million new energy main drive units in China. According to statistics from the Passenger Federation, domestic NEV sales volume was 7.736 million vehicles in 2023, with a market share of 23.2%. The company's products have been widely used in major domestic NEV brands, establishing the company's leading position in the domestic NEV application market. The company has established close strategic partnerships with major drive system manufacturers such as Fangzheng Motor and Wolong Electric Drive. In addition, in emerging fields, humanoid robots and eVTOL are emerging in demand and have great potential.
Investment advice:
We expect the company's revenue from 2024 to 2026 to be 50.76, 61.77, and 8.356 billion yuan, respectively, with net profit of 384, 4.84, and 669 million yuan respectively, corresponding EPS of 0.35, 0.44, and 0.60 yuan/share, respectively. Currently, the corresponding PE price is 17.9, 14.2, and 10.3 times, maintaining a “holder-A” rating. The target price for 6 months is adjusted to 7.7 yuan, which is equivalent to 22 times the dynamic price-earnings ratio in 2024.
Risk warning: demand falls short of expectations, raw material prices fluctuate greatly, and project progress falls short of expectations