The large-scale application of Quark Electric Drive 2.0 is imminent, and mass production of amorphous alloys is the core breakthrough. In March 2023, GAC Aian released the Quark Electric Drive, which successfully broke through the contradiction between “small size” and “big power”. On August 23, 2024, GAC Aian officially announced that its Quark Electric Drive 2.0 was successfully mass-produced and rolled off the production line at Ruipai Power Technology. Quark Electric Drive 2.0 set a world record in the three key indicators of motor efficiency, power density, and rotation speed: (1) Quark Electric Drive 2.0's motor efficiency reached 98.5%, infinitely approaching the physical limit of 100% room temperature superconductivity; (2) the power density of Quark Electric Drive 2.0 reached an astonishing 13 kW/kg; (3) Quark Electric Drive 2.0's rotation speed was as high as 30,000 rpm. On the premise that the battery capacity remains the same, the Quark Electric Drive 2.0 can have a battery life of 50 km to 150 km, which is equivalent to a 4% increase in energy efficiency. Only by reducing the weight of new energy vehicles by 200 kg or more can energy efficiency be achieved by 6%. According to reports, the amorphous motor of Quark Electric Drive 2.0 weighs about 20 kg, and it is expected that amorphous motors will be used on a large scale in new energy vehicles in June 2025.
The large-scale application of Quark Electric Drive 2.0 is expected to increase the penetration rate of amorphous motors in the NEV industry.
The use of amorphous alloy materials can greatly improve the efficiency and performance of motors, thereby driving down vehicle production costs. Therefore, car companies are motivated to develop and use amorphous motors, thereby promoting a rapid increase in the penetration rate of amorphous motors in the new energy vehicle industry. In 2023, GAC Group's NEV sales volume was 0.5496 million vehicles. If Quark Electric Drive 2.0 is promoted to all GAC Group NEV models, the demand for amorphous alloys will be 0.022 million tons in 2023. Global NEV sales in 2023 were 14.182 million units. Assuming that all NEVs in the world are equipped with amorphous motors, there will be 0.84 million tons of amorphous alloy demand in 2023.
Yunlu Co., Ltd. is the largest supplier of amorphous alloy thin strips in the industry. The company focuses on the design, R&D, production and sales of advanced magnetic metal materials. The main products include amorphous alloys, nanocrystalline alloys, magnetic powders and their products. In 2023, the company's amorphous alloy products accounted for more than 75% of revenue. According to calculations, in 2021-2023, the domestic market share of the company's amorphous alloy products was 75.5%, 78.35% and 74.8%, respectively. At present, the company's annual design production capacity of amorphous alloy thin strips has reached 0.09 million tons, and the construction of a new “amorphous production line with an annual output of 0.015 million tons” is progressing smoothly. Production is expected to be completed in the second half of 2024. At that time, the company's amorphous alloy strip production capacity will further increase.
Profit forecast and investment rating: The company's revenue for 2024-2026 is estimated to be 2.007/2.728/3.526 billion yuan, respectively, and net profit to mother is 0.391/0.573/0.758 billion yuan, respectively. Considering that the company's three main products continue to be deployed on multiple tracks and production lines are about to be put into operation, the sales volume of the company's three main products is expected to increase, giving the company a “buy” rating.
Risk warning: the risk of fluctuations in the price of raw materials for the company's products; the risk that R&D progress in new application fields falls short of expectations; the risk that the gross margin of the company's products will fall short of expectations; the risk that performance forecasts and valuation judgments fall short of expectations.