Tianhe Magnetics: Will strive to develop high-quality customers in high-end fields such as humanoid robots, with net profit up 13.58% YoY in Q1

The content of the earnings briefing announced by Tianhe Magnetics on May 30 showed the following:

1. How was the overall performance of your industry during this period? How do you compare with other companies?

Tianhe Magnetics responded: In 2024, amidst a complex operating environment characterized by a decline in rare earth raw material prices and intensified industry competition, the company addressed challenges through a "Three Persistences" strategy: persisting in technological R&D-driven growth, persisting in a high-end market positioning, and persisting in intelligent production management, achieving key breakthroughs in core business areas. The company remained steadfastly focused on its main business, solidifying daily operational management, continuously investing in R&D, optimizing costs, and actively and steadily conducting business operations in line with the "Three Persistences" strategy, achieving steady development in areas such as NEVs and automotive parts, wind power generation, energy-efficient home appliances, and 3C consumer electronics. In terms of operational indicators, the company achieved three major structural changes: 1. Capacity scale breakthrough: The company has established an annual production capacity of 9,300 mt of high-performance rare earth permanent magnet materials. In 2024, blank production reached a record high of 10,355 mt, up 23.51% YoY; 2. Product structure optimization: Revenue from the NEV and parts business was 1,641.4396 million yuan, accounting for 63.38% of total operating revenue, up 6.09% YoY, effectively offsetting the decline in traditional sectors; 3. Strengthened technological reserves: As of the end of 2024, the company held 107 authorized patents, including 48 in countries and regions such as Europe, Japan, and the US, and 59 domestically. In 2024, the company achieved sales revenue of 2,589.7051 million yuan, a decrease of 61.6366 million yuan from the previous year's 2,651.3417 million yuan, down 2.32%.

2. How did product shipments change in Q1 2025 compared to the same period last year?

Tianhe Magnetics responded: In Q1 2025, there were no significant changes in product shipments compared to the same period last year, remaining basically stable.

3. What is the gap between your company and JL MAG Rare-Earth? What are your company's profit growth points?

Tianhe Magnetics responded: In the future, the company will continue to persist in technological R&D-driven growth, persist in a high-end market positioning, and persist in intelligent production management, achieving key breakthroughs in core business areas. 1. Continuously strengthen R&D-driven growth, continuously optimize costs, and meet market demands; 2. Persist in a high-end market positioning, enhance market share in niche markets, and promote the development of new customers and new markets; 3. Persist in intelligent production management, continuously improve management and information construction levels; 4. Actively promote and improve ESG sustainable development efforts; 5. Steadily advance the full production of raised capital investment projects, further releasing production capacity and driving steady revenue growth. Meanwhile, humanoid robots will become a significant growth driver for the demand of NdFeB magnetic components. Leveraging the company's early strategic deployment and technological accumulation, by 2025, we will actively develop premium clients in high-end sectors including humanoid robotics, laying a solid foundation for the company's sustainable and healthy development.

4. What Are the Future Development Prospects of the Industry?

Tianhe Magnetics responded: The industry chain of the rare earth permanent magnet materials sector consists of upstream rare earth industries, midstream rare earth permanent magnet materials industries, and downstream major end-use application fields. The upstream rare earth industry produces raw materials such as rare earth metals and oxides required for manufacturing rare earth functional materials through mining, smelting, and separation of rare earths. The downstream industry chain primarily includes NEVs, wind power generation, energy-saving home appliances, 3C consumer electronics, robotics, and rail transit.The continuous expansion of downstream markets will further drive sustained growth in the demand for rare earth permanent magnet materials.

5. What Are the Company's Future Profit Growth Drivers?

Tianhe Magnetics responded: 1. Continuously strengthen R&D-driven initiatives, optimize costs, and meet market demand; 2. Maintain a high-end market positioning, increase market share in niche segments, and develop new clients and markets; 3. Adhere to intelligent production management, continuously improve management and IT infrastructure; 4. Actively advance and refine ESG sustainability efforts; 5. Steadily progress toward full production of fundraising projects, further release capacity, and drive stable performance growth. Meanwhile, humanoid robots will become a significant growth driver for the demand of NdFeB magnetic components. Leveraging the company's early strategic deployment and technological accumulation, by 2025, we will actively develop premium clients in high-end sectors including humanoid robotics, laying a solid foundation for the company's sustainable and healthy development.

6. What Is the Current Status of the Company's Patents?

Tianhe Magnetics responded: The company consistently adheres to its positioning as a provider of high-performance rare earth permanent magnet materials, with high performance and low resource consumption as primary goals. Focusing on key technological innovations and breakthroughs in the preparation process of rare earth permanent magnet materials, we have developed a series of advanced core technologies, including multi-component regulation, grain refinement, single-step forming compaction, grain boundary diffusion, efficient green processing, low eddy-current loss magnets, and new-type coating surface treatment. These technologies have been successfully scaled up for industrialisation, with overall product performance and core technologies ranking among the domestic advanced level. As of the end of 2024, the company holds 107 authorized patents, including 48 in Europe, Japan, the US, and other regions, and 59 in China.

7. What Is the Company's Current Capacity?

Tianhe Magnetics responded: In 2024, in terms of capacity expansion, the company's "High-Performance NdFeB Industrialisation Project," a project funded through public offerings, steadily released its capacity. Through the upgrade of automated production lines, the deployment of digital management systems, and the transformation of green production processes, the company achieved an improvement in manufacturing efficiency. Currently, it has formed a complete industry chain with an annual production capacity of 9,300 mt of high-performance rare earth permanent magnet materials, ensuring capacity matching across all links, from blank production and mechanical processing to finished product inspection. This has laid a solid foundation for the company to expand its customer base and increase market share.

8. How was the company's profitability in the current period?

Tianhe Magnetics responded: In 2024, the company achieved sales revenue of 2,589.7051 million yuan, a decrease of 61.6366 million yuan from the previous year's 2,651.3417 million yuan, down 2.32%. Net profit in 2024 was 136.0854 million yuan, a decrease of 32.7204 million yuan from the previous year's 168.8058 million yuan, down 19.38%. Net profit excluding non-recurring gains and losses in 2024 was 132.0871 million yuan, a decrease of 29.3805 million yuan from the previous year's 161.4676 million yuan, down 18.20%.

9. Hello, what are rare earth permanent magnet materials?

Tianhe Magnetics responded: Rare earth permanent magnet materials refer to a class of permanent magnet materials formed by rare earth metal elements RE (such as Sm, Nd, Pr) and transition metal elements TM (such as Fe, Co), based on intermetallic compounds, with the full name being rare earth intermetallic compound permanent magnet materials.

10. What are the reasons for the company's gross profit margin in Q1 2025 being higher than the overall gross profit margin for the whole year of 2024?

Tianhe Magnetics responded: In Q1 2025, influenced by factors such as market supply and demand and international trade, the market prices of domestic rare earth products stabilised and rebounded, leading to an increase in the company's overall gross profit margin. Meanwhile, the company's operational efficiency further improved, and its business structure continued to be optimised. In addition, the company's products are customised, and the gross profit margin is directly related to factors such as product type, application field, technical specifications, and customer type, in addition to being influenced by the market environment. The increase in the gross profit margin in Q1 2025 was the result of the combined effects of the above factors.

11. Why did the company's revenue in Q1 2025 decline YoY? Was it due to a decrease in shipments or a decrease in product unit prices?

Tianhe Magnetics responded: The company's operating revenue in Q1 2025 was 525.4375 million yuan, compared to 557.5006 million yuan in Q1 2024, representing a slight decrease, with revenue remaining basically stable.

Tianhe Magnetics previously released its Q1 2025 report, which showed that during the reporting period, the company achieved operating revenue of 525 million yuan, down 5.75% YoY; net profit attributable to shareholders of the publicly listed firm was 35.8834 million yuan, up 13.58% YoY.