Ningbo Yunsheng: Partial Capacity of Intelligent Manufacturing Project for 15,000 mt High-Performance Rare Earth Permanent Magnet Materials Put into Operation

On the evening of June 27, Ningbo Yunsheng announced that the company raised a total of 1.045 billion yuan in its 2022 private placement of A shares, which was invested in the "Baotou Yunsheng Technology Development Co., Ltd. Annual Production of 15,000 mt High Performance Rare Earth Permanent Magnets Intelligent Manufacturing Project." On April 29, 2024, the company held its 32nd meeting of the 10th Board of Directors and the 24th meeting of the 10th Board of Supervisors, where the "Proposal on the Extension of the Fundraising Investment Project" was reviewed and approved, adjusting the scheduled operational status timeline for the fundraising investment project. Among these, the 5,000 mt capacity is expected to be completed and put into production in June 2025. Currently, the production workshop corresponding to the 5,000 mt capacity has completed preliminary work such as equipment installation, debugging, and trial production, and is now officially operational.

Ningbo Yunsheng's announcement also indicated that the partial completion and operation of the above project will effectively enhance the company's capacity, further translating its technological and quality advantages into product advantages on a larger scale, promoting market share growth, and strengthening profitability and overall competitiveness. This will positively consolidate the company's market position in the industry. However, it will take some time for the project to reach full production, and uncertainties remain in future market conditions and raw material prices. Investors are advised to pay attention to and be aware of investment risks.

Ningbo Yunsheng previously disclosed its Q1 2025 report, showing that the company achieved operating revenue of 1.122 billion yuan in Q1, up 9.36% YoY, and net profit attributable to shareholders of 37.2176 million yuan, turning a profit YoY. The growth in net profit was mainly due to increased revenue and higher gross margins YoY during the reporting period.

In its Q1 report, Ningbo Yunsheng stated that the company achieved main business revenue of 1.032 billion yuan in Q1, up 8.86% YoY. The performance in key segments was as follows: NdFeB permanent magnet materials for NEV applications generated sales revenue of 574 million yuan, up 43.14% YoY, with cumulative domestic shipments supporting approximately 612,000 main drive motors. Based on CPCA's retail sales of 2.421 million passenger NEVs nationwide from January to March, the company's NdFeB permanent magnet materials held a market share of about 25.3% in the domestic passenger NEV main drive market. NdFeB permanent magnet materials for consumer electronics applications generated sales revenue of 154 million yuan, down 18.09% YoY, while those for industrial and other applications generated sales revenue of 304 million yuan, down 15.32% YoY.

Ningbo Yunsheng's 2024 annual report showed that the company achieved operating revenue of 5.041 billion yuan in 2024, down 6.11% YoY, as lower raw material prices led to reduced selling prices and lower revenue. Net profit attributable to shareholders was 95.0796 million yuan, turning a profit YoY. In 2024, the company achieved sales of 12,873 mt of finished NdFeB permanent magnet materials, up 19.33% YoY. Affected by the decline in selling prices, the company achieved a main business income of RMB 4.556 billion, down 2.56% YoY.

Regarding its business plans, Ningbo Yunsheng stated in its 2024 annual report: 1. Market Expansion Plan: The company will focus on three major application areas: NEV applications, consumer electronics, and industrial and other applications. It will continue to advance the strategy of major customers, consolidate and enhance its leading position in the existing application areas of NdFeB permanent magnet materials, and continuously increase market share. Meanwhile, the company will actively explore new applications of NdFeB permanent magnet materials in new quality productive forces, such as humanoid robots and eVTOL (electric vertical takeoff and landing aircraft), and expand market application functions and business portfolios by providing customers with supporting services such as magnetic assemblies. 2. Production Capacity Enhancement Plan: Faced with the rapid development of industries such as NEVs, servo motors and robots, and intelligent manufacturing, the company will actively plan to enhance the production capacity of rare earth permanent magnet materials to meet the growing market demand in downstream industries. The company will continue to promote the technological upgrading and transformation of existing production lines, enhance the automation and intelligence levels of production sites; based on changes in market demand trends, it will focus on expanding the production capacity of magnetic assemblies such as segmented magnets; accelerate the application speed of new processes such as grain boundary diffusion alloy diffusion process and new-generation cutting process, improve the company's production capacity, enhance product delivery capabilities, and strengthen the company's industry position. 3. R&D Plan: The company will adhere to the principle of "technology-led, pursuit of originality," and based on market demand and industry development trends, continuously explore the performance potential of magnets around improving NdFeB performance, enhancing material utilization, and advancing preparation technologies. It will research and develop ultra-high-performance magnets and magnets with high service characteristics to establish a technological leading advantage; promote the continuous progress of grain boundary diffusion technology, expand the application scope of grain boundary diffusion processes, continuously reduce the usage of dysprosium and terbium elements in medium-to-high coercivity magnets, and strengthen the research, development, and application promotion of dysprosium-free and terbium-free products; continue to strengthen research on high-precision forming technologies and low-loss processing technologies, continuously improve the high-precision processing capabilities of thin and small magnets, develop surface protection technologies for different application areas, and enhance competitive advantages; continuously optimize low-cost manufacturing processes throughout the entire process, promote the construction of platformized and intelligent factories, and improve production efficiency and reduce costs.

The fluctuation of raw material prices for NdFeB permanent magnet materials is closely related to the production and operation of enterprises. Reviewing the trend of Pr-Nd oxide, an important raw material for NdFeB permanent magnet materials, we can see that:

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The price of Pr-Nd oxide fell in 2024: the average price on December 31, 2024, was RMB 398,000 yuan/mt, compared with the average price of RMB 442,500 yuan/mt on December 29, 2023, the average price fell by RMB 44,500 yuan/mt in 2024, a decrease of 10.06%. The annual daily average price of Pr-Nd oxide in 2024 was 391,871.9 yuan/mt, compared to 529,274.79 yuan/mt in 2023, representing a decrease of 137,402.89 yuan/mt, or a 25.96% YoY decline. However, the price of Pr-Nd oxide rose in Q1 of this year: the average price on March 31 was 444,500 yuan/mt, up 46,500 yuan/mt from the average price of 398,000 yuan/mt on December 31, 2024, marking an 11.68% increase for the quarter. Comparing the daily average price of Pr-Nd oxide in Q1 2025 (429,605.26 yuan/mt) with that in Q1 2024 (381,646.55 yuan/mt), it can be seen that the daily average price in Q1 of this year increased by 12.57% YoY.

According to the latest quotes from SMM, on June 27, the average price of Pr-Nd oxide was 444,500 yuan/mt, down 0.11% from the previous trading day. Recently, due to the impact of the traditional rainy season in Southeast Asia, imports of ore from Myanmar have significantly decreased, and suppliers' willingness to sell has been weak. Rare earth oxides have generally been in the doldrums, with sluggish inquiries from downstream buyers. However, due to the month-end cash needs of some suppliers, there have been instances of price reductions and small-volume sales, leading to a slight downward shift in the rare earth transaction range, although most suppliers remain firm in their quotes. As downstream industries gradually emerge from the traditional off-season, coupled with frequent positive market news, most industry insiders are optimistic about the future price of rare earths. In this market environment, low-priced supplies may become even harder to find. Overall, although the rare earth market faces short-term volatility challenges, the rare earth industry generally maintains a positive and optimistic attitude towards its long-term development prospects.