Performance summary: In 2023, the company achieved operating income of 6.69 billion yuan (-6.66% YoY); realized net profit of 564 million yuan (YoY -19.8%); net profit after deduction of 493 million yuan (YoY -27.70%), corresponding EPS of 0.42 yuan; dividend of 0.26 yuan (tax included) per share, with a dividend rate of about 1.65%. 2023Q4 achieved operating income of 1.64 billion yuan (-16.1% YoY, +1.06% month-on-month) and net profit of 0.69 million yuan (YoY +335% YoY, -57.1%); product volume increases and decreases, crossing the rare earth cycle: In 2023, the company's domestic/foreign business achieved revenue of 54.4/1.25 billion yuan (-14.3%/+52.69% YoY). The rapid growth of overseas business was mainly due to the rapid growth of European NEV and wind power export business. In terms of production and sales volume, in 2023, the company's high-performance ammonium-iron boron production and sales volume reached 15,154 ltons/15,122 tons (+18.59%/+25.69%). Among them, the sales volume of crystal boundary penetrating products reached 13,226 tons (+32.7%), accounting for 87.3% of the company's total product output during the same period (+9.34pcts) o. The average price of the finished product in 2023 was 381,000 yuan/ton (-24.5% year over year), mainly due to the sharp year-on-year decline in rare earth raw material prices, according to Shanghai; color According to data, the average spot price of Cuoammonium Metal and Cuojiao Oxide in 2023 was 65.5/539,000 yuan/ton, respectively, down 35.8%/35.40% year on year; the new energy car business is developing steadily: the company accurately grasps trends in the new energy sector, looking at product consumption structure: ① The new energy vehicle and automobile parts f sector achieved revenue of 3.3 billion yuan (+14.3% year-on-year), and the sales volume of magnetic steel products for NEV drive motors can be assembled with about 3.9 million new energy passenger vehicles. According to data released by CleanTechnica, the world's new 2023 The sales volume of energy passenger vehicles was about 13.69 million units; ② The energy-saving inverter air conditioning sector achieved revenue of 1.32 billion yuan (-27.79% year over year), and the year-on-year decline in revenue was mainly dragged down by lower product unit prices due to lower rare earth prices; ③ The wind power sector's revenue reached 585 million yuan (-18.50% year over year), product sales volume can be equipped with wind power installed capacity of about 3.9 GW, and the revenue scale declined year-on-year or reduced demand for permanent magnet direct drive synchronous motors due to downstream customers seeking cost reduction; ④ Revenue in the field of robots and industrial servo motors reached 217.217 million yuan (same as same as 217.217 million yuan) (Ratio -14.2%) It is also affected by price adjustments for wrought-iron boron products; profitability is gradually bottoming out; in 2023, the company's gross sales margin/net sales margin decreased by 0.11 pcts/ 1.35 pcts to 16.196/ 8.5%, respectively. The relatively large decline in net sales margin was mainly due to the year-on-year increase of 1.30 pcts to -0.85% in financial expenses. The reason is that the appreciation of the company's US dollar and Hong Kong dollar in 2022 brought about exchange revenue of about 183 million yuan, and the exchange earnings in 2023 were relatively small. 2023Q4, the company's gross sales margin/net sales margin decreased by 3.95 pcts/ 5.79 pcts to 14.50% /4.36, ① The month-on-month decline in Q4 sales gross margin was mainly affected by increased competition in the magnetic materials market; ② The large decline in Q4 net sales interest rate was mainly due to the 1.78 pcts month-on-month increase in the Q4 management expenses rate, which is estimated to increase mainly employee remuneration; in 2024, the first batch of rare earth indicators were 135,000 tons and 12.7, respectively 10,000 tons (+12.5%/+10.4%); Among them, the light rare earth mining index reached 124.86 million tons (+14.5% year over year), and the medium and heavy rare earth mining index reached 10.14 million tons (-7.3% year over year). The growth rate of light rare earth mining indicators was significantly higher than that of medium and heavy rare earths. On the one hand, it reflects the increase in light rare earth demand, which has led to relatively loose index quotas. On the other hand, it shows that the country's intention to control the supply of medium and heavy rare earths is more obvious to maintain its scarcity; fund-raising projects help break through production capacity bottlenecks: The company has already broken through production capacity bottlenecks: It has an annual production capacity of 23,000 tons of iron and boron blanks, and It is planned to build a production line with a rough production capacity of 38,000 tons/year by the end of 2024. The company plans to invest in the construction of the “Mexico Project to Build a New Production Line with an Annual Output of 1 Million Units/Magnetic Module” in Mexico. After the project is completed and delivered, it will form a production capacity of 1 million units/set of magnetic components per year, which will help enhance the company's market competitiveness in the fields of humanoid robots and new energy vehicles. As the company gradually moved from a single base in Ganzhou to multiple bases such as Baotou and Ningbo, and achieved magnetic component production capacity overseas through the Mexican base, the company's leading position in the industry was stabilized; Investment suggestion: Increased demand for downstream new energy vehicles has laid an incremental foundation for rare earth permanent magnets, and the company's pioneering expansion into the humanoid robot market is expected to welcome the next industry trend and create a new growth curve. We expect the company to achieve operating income of 88.9/ 108.3/ 12.73 billion yuan respectively in 2024-2026, up 32.9%/21.9%/17.5% year on year, and net profit to mother of 7.2/9.4/1.17 billion yuan respectively, up 27.6%/30.096/ 25.2% year on year, corresponding to PE 29X/ 23X/18X. Maintain a “buy” rating.

Risk warning: Raw material prices fluctuate greatly, project progress falls short of expectations, terminal demand falls short of expectations, etc.