23Q3 company's single-quarter net profit yoy-71.18%, maintained to buy rating company 23Q1-Q3 to achieve revenue of 6.417 billion yuan, yoy-14.52%; realized net profit of 223 million yuan, yoy-63.73%; of which 23Q3 realized net profit of 61 million yuan (yoy-71.18%,qoq-1.05%). According to the company's three-quarter report, the year-on-year decrease in net profit during the reporting period was mainly due to the decline in operating income, narrowing of gross profit margin and exchange rate changes. Due to the intensification of competition in the magnetic materials industry in 23 years, we reduce the processing fee assumption and adjust the management expense rate according to the three quarterly reports. Finally, it is estimated that the company's net return profit for 23-25 years will be RMB 2.93 million (the previous value is RMB 594 million). Comparable company wind unanimously expects the average PB (23e) to be 2.14X, giving the company a 23-year 2.14X PB, a 23-year BPS of 5.44 yuan and a target price of 11.64 yuan (previous value 12.74 yuan), maintaining a buy rating.
The gross profit margin and net profit margin of the company's 23Q3 declined compared with the previous month.
Prices of rare earths, a raw material for magnets, fell almost unilaterally in the first three quarters of 23, reflecting poor demand in the industry. Poor demand superimposed magnetic material industry capacity expansion, industry competition intensified, supply and demand pattern deteriorated, 23 years company profitability continued to decline in a single quarter. 23Q3's gross profit margin and net profit margin are 10.77% and 3.28% respectively, compared with the same period last year,-7.29 and-6.11pct respectively, and month-on-month comparison is-1.5pct and-1.86pct, respectively.
It is expected that the price of 23Q4 rare earths will end the unilateral downward trend and maintain relatively stable demand. Affected by the preparation of stocks before the Eleventh Festival, the rare earth industry tends to gradually enter the peak season in the lower reaches of September, and prices have strengthened in history. On the supply side, the second batch of quotas in 23 was issued, which was the same as that of the first batch in 23, and the supply remained stable. In addition, according to the Baotou rare Earth products Exchange, the listing price of rare earths in the north has been lowered several times over the past 23 years, reflecting a slight oversupply in the market, while the listing price was raised for the first time in September and continued to rise in October, which to a certain extent reflects the optimism of the head production enterprises about the future price. Overall, 23Q4 rare earth prices are expected to end the unilateral downward trend, prices remain relatively stable; raw material prices stabilize, more conducive to the stable production of magnetic materials enterprises.
Emerging fields such as humanoid robots are expected to boost the demand for magnetic materials 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 magnetic material 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. We believe that the new field represented by humanoid robots is expected to continue to drive the growth of downstream demand for magnetic materials, and magnetic materials-related enterprises will benefit in the long run.
Risk hint: downstream demand is lower than expected, raw material prices fluctuate sharply, and industry policy changes.