With the rapid release of the demand for high-performance NdFeB in the downstream market, Ningbo Yunsheng (600366.SH) has joined the tide of rare earth NdFeB production expansion. At the same time, the price of rare earths is also at an all-time high. On the morning of February 24, the reporter learned from Ningbo Yunsheng that by the end of 2021, the company had an annual production capacity of 12000 tons of billets, and is expected to achieve an annual production capacity of 19000 tons by the end of 2022. At present, 7000 tons of production is being expanded in an orderly manner as planned.
"in terms of production, during the Spring Festival this year, the company called on employees to stay in Ningbo and join production, and many employees responded positively, laying a good foundation for the New year." The company related personage expresses to the reporter.
On the evening of February 23rd, Ningbo Yunsheng disclosed the plan to raise no more than 1.08 billion yuan through a non-public offering for the construction of the intelligent manufacturing project of Baotou Yunsheng Science and Technology with an annual output of 15000 tons of high-performance rare earth permanent magnet materials.
It is worth mentioning that Ningbo Yunsheng's increase is mainly aimed at no more than 35 specific objects, including related Fang Yunsheng Technology, which is a new wholly-owned subsidiary of the company's controlling shareholder Yunsheng Group in January this year. According to Yunsheng Technology's commitment to subscribe for 35% of the shares in this issue, after the completion of the offering, Yunsheng Group controls 33.85% of the voting shares through its concerted actors Qianhao Investment and Yunsheng Technology, and Yunsheng Group remains the controlling shareholder.
The plan shows that the total investment in this project is 1.1 billion yuan, through the new plant and supporting facilities of 75000 square meters, the purchase of advanced production equipment and supporting equipment, to expand the production capacity of high-performance NdFeB blank. It is reported that the construction period of the project is 24 months, and it will reach production 36 months after it is completed and put into production. After the project reaches full production, the expected financial internal rate of return (after tax) is 13.34%, and the static investment payback period (after tax) is 9.28 years (including 2-year construction period). At present, the project has been put on record by government departments, and the EIA procedures are still under way.
With the promotion of the goals of "carbon peak" and "carbon neutralization", the demand for rare earth NdFeB has released great potential. According to the research report of Frost&Sullivan, it is estimated that by 2025, the global consumption of high-performance NdFeB permanent magnet materials will reach 129100 tons, with an estimated annual compound growth rate of 14.71%. Among them, China's high-performance NdFeB permanent magnet material consumption will reach 87100 tons, with an estimated annual compound growth rate of 16.55%, accounting for more than 60% of the world, and the average annual growth rate of consumption is higher than that of the world.
According to the public data of A-share listed companies, it is estimated that by 2025, the total production capacity of high-performance NdFeB magnetic blank may exceed 190000 tons. Ningbo Yunsheng said that through this investment project, the company plans to expand high-performance NdFeB production capacity, focusing on supporting market demand in downstream areas such as new energy vehicles, wind power generation and industrial motors, and improving production and delivery capacity.
On the same day, Ningbo Yunsheng released its 2021 results of KuaiBao. Last year, the company's revenue and net profit were 3.754 billion yuan and 516 million yuan respectively, up 56.47% and 190.30% respectively over the same period last year.
The reporter is concerned that in December last year, Ningbo Yunsheng sold its 70 per cent stake in Beijing Sheng Magnetic, on the grounds that Beijing Sheng Magnetic's billet production capacity in Beijing and Qingdao is less than 2000 tons per year, and the production base is relatively scattered. Existing sites and equipment have been difficult to support further expansion demand.
Since the beginning of this year, the domestic market price of rare earth oxides has remained high. The rare earth price index hit an all-time high of 431.0 on February 22, according to the China rare Earth Industry Association. Market participants believe that the rise in rare earth prices is related to the mismatch between supply and demand.
Zhongtai Securities Research report pointed out that the rare earth bibcock is expected to move from the cycle to become, the demand side downstream transmission is smooth, new energy vehicles, industrial motors, wind power and other downstream consumption outbreak, rare earth resources supply and demand pattern has undergone qualitative changes, prices are expected to achieve weak cyclical fluctuations, really return to the "rare" value, while the rare earth industry chain leader will usher in a "volume and price rise", continue to benefit.
"rare earths are the company's important raw materials, and the recent price is relatively high in history. This price fluctuation has a direct impact on the company's production costs, and the company will try its best to deal with it." The above-mentioned company related personage told the reporter.
