Focus on magnetic materials business, homeopathic expansion capacity. NdFeB magnetic material is the core of the business, leading the development of the company for 30 years. At present, Ningbo and Baotou two major production bases have been formed, with a blank production capacity of 12,000 tons / year, and will reach 19,000 tons / year by the end of 2022. By 2024, the production capacity of 15000 tons of high-end magnetic materials project will be put into production, and the production capacity is expected to reach 34,000 tons / year, ranking in the forefront of China. The company's deep technology accumulation, magnetic materials focus on electronics (3C, VCM, etc.), new energy vehicles, industrial automation and other high-tech, high value-added, high gross profit related subdivision direction, products and customers are relatively high-end, to ensure that the company in the industry fluctuations to achieve a more stable profitability. After 2018, the company gradually converged its investment business, and the stock project developed steadily; in 2020, it spun off the servo motor business, further focused on the main business, and avoided the competitive relationship with customers. The company speeds up the process of improving quality and efficiency, strengthens cost control, deepens the understanding of customers, binds and serves customers deeply, attaches importance to talents, improves the treatment level of employees, and encourages and binds core management and technical personnel.
The double carbon goal promotes the rapid development of magnetic materials. High-performance NdFeB will jointly promote carbon emission reduction on both the generation side (wind power) and the power side (new energy vehicles, high-performance motors, etc.), and the industry demand continues to break out. New energy vehicles have ushered in market-driven explosive growth, which is expected to maintain a growth rate of more than 35% during the 14th five-year Plan period. we expect global sales to exceed 24 million vehicles in 2025, which will drive global high-end NdFeB consumption to 60,000 tons. Domestic wind power is expected to maintain the installed capacity of 40GW/ for more than a year after the low price, and with the increase of the permeability of direct drive motors, it is expected to drive the global consumption of high-end NdFeB to more than 30,000 tons by 2025. The fields of industrial motors, frequency conversion air conditioners and energy-saving elevators as well as consumer electronics will also maintain steady infiltration and growth, and are expected to reach the demand of more than 10,000 tons.
Profit forecast and investment rating: the company has entered a new cycle of capacity expansion, and its product structure has been gradually adjusted to faster-growing new energy vehicles. We expect the company to achieve a net profit of 6.77,9.45 and 1.398 billion yuan respectively from 2022 to 2024. year-on-year growth of 30.7%, 39.6% and 47.9% respectively. EPS is 0.68,0.96 and 1.41 yuan respectively, and the latest share price PE is 20x, 14x and 10x respectively. Considering the outbreak of industry demand, the company's production capacity multiple growth brings sustained high performance growth and maintains the company's "buy" rating.
Stock price catalyst: the company has made major customer breakthroughs, capacity expansion exceeded expectations, and so on.
Risk factors: the progress of the expansion project is not as expected, the expansion of new energy business is not as expected, and the downstream demand is not as expected.