Zhenghai Magnetic Material: It obtained the rare earth export license earlier and is currently operating normally. New export licenses are being approved one after another.

When asked, "With the state regulating rare earth exports, is your company's motor export business also restricted?", Zhenghai Magnetic Material stated on the investor interaction platform on July 1 that the company's main products are high-performance NdFeB permanent magnet materials, which can be widely applied in high-end application fields of "three energies" (new energy, energy conservation, and intelligence), including NEVs, automotive electrification, energy-efficient home appliances, automation, intelligent consumer electronics, wind power, elevators, etc. After the introduction of export control measures for medium-heavy rare earth-related items, the company responded promptly and actively advanced export declaration work in strict compliance with relevant national regulations, becoming one of the earlier enterprises to obtain export licenses. Currently, the company's production and operation are normal, export declaration work is progressing steadily, and new export licenses are being approved successively. The company will maintain close communication with relevant departments, dynamically follow up on policy changes, ensure the compliant advancement of export business, and fully safeguard stable operations. For specific operating performance, please refer to the relevant content in the company's periodic reports.

Previously, in response to the question, "With the recent significant fluctuations in rare earth prices, how is the company coping?", Zhenghai Magnetic Material stated on the investor interaction platform on June 18 that the company continuously monitors fluctuations in raw material prices closely, adheres to the principles of producing based on sales, procuring based on production, and maintaining reasonable inventory levels. The company has established stable procurement channels and a comprehensive supplier management system. The company actively communicates and negotiates with customers, establishes a linked pricing mechanism, and promptly negotiates prices to safeguard the company's stable development. Thank you for your support and attention to the company.

Zhenghai Magnetic Material's Q1 2025 report shows that in the first quarter of this year, the company achieved operating revenue of 1.46 billion yuan, up 24.4% YoY; net profit attributable to shareholders was 69.49 million yuan, down 10.9% YoY.

Zhenghai Magnetic Material's Q1 report indicates that in the first quarter of 2025, the company achieved operating revenue of 1,458.8239 million yuan, up 24.38% YoY. The sales volume of the company's high-performance NdFeB permanent magnet materials increased by 31% YoY, with the sales volume in the automotive market, a major application field, increasing by 48% YoY. However, due to factors such as fluctuations in raw material prices and intense market competition, the company's profits declined. In 2025, the company will persist in pursuing quality income and high-quality growth, continuously optimizing product and customer structures. During the reporting period, the company's operational efficiency was further improved, its business structure was continuously optimized, and its profitability gradually improved. The company will continue to promote the innovation and application of technologies related to heavy rare earth-free, low heavy rare earth, and ultra-light rare earth, further enhancing its competitiveness in the high-end magnetic material field. While consolidating and continuously increasing its market share in core markets, the company will actively adapt to the development trends of emerging industries and fully expand into potential markets such as humanoid robots.

Zhenghai Magnetic Material previously disclosed its 2024 annual report, showing that in 2024, the company achieved a total operating revenue of 5.539 billion yuan, down 5.70% YoY; and a net profit attributable to shareholders of 92.3402 million yuan, down 79.37% YoY.

When analyzing its main business, Zhenghai Magnetic Material stated that in 2024, facing a complex and severe external environment, the company's management continued to focus on its long-term development strategy and annual operating goals, with innovation-driven and high-quality development as the core, focusing on digital and intelligent transformation, seeking progress through change; deeply expanding traditional application markets such as the automotive industry, and actively promoting the market layout in emerging industries; continuously strengthening technological R&D innovation to enhance market competitiveness, laying a solid foundation for long-term healthy and sustainable development in the future. (1) High-performance NdFeB permanent magnet materials business During the reporting period, the company relied on its technological advantages to carry out key customer and project breakthroughs, while closely tracking changes in market competition dynamics and adjusting goals and strategies in a timely manner. The company completed 58 selected automotive projects throughout the year, exceeding the annual target. With active market expansion, shipments increased significantly YoY throughout the year. Among them, shipments in the energy-saving and NEV markets increased by 25% YoY, with a total of 5.61 million sets of energy-saving and NEV motors installed; shipments in the home appliance industry increased by 28% YoY; and shipments in the smart consumer electronics sector increased by 100% YoY. The company's products are highly compatible with core components such as coreless motors and frameless torque motors for humanoid robots. During the reporting period, the company promptly followed up on changes in downstream application scenarios, conducted in-depth surveys in the humanoid robot field, and completed small-batch deliveries to downstream customers. (2) NEV motor drive business During the reporting period, the company optimized and contracted its NEV motor drive business, resulting in a significant decline in revenue and profit for this segment YoY.

Reviewing the historical price trend of Pr-Nd alloy, a raw material for high-performance NdFeB permanent magnets, it can be seen that:

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In 2024, the price of Pr-Nd alloy fell. The average price of Pr-Nd alloy on December 31, 2024, was 489,000 yuan/mt, compared with the average price of 542,000 yuan/mt on December 29, 2023, the average price fell by 53,000 yuan/mt in 2024, a decrease of 9.78%. The annual daily average price of Pr-Nd alloy in 2024 was 484,704.55 yuan/mt, compared with the annual daily average price of 645,330.58 yuan/mt in 2023, the annual daily average price fell by 160,626.03 yuan/mt, a YoY decrease of 24.89%.

However, the price of Pr-Nd alloy increased in Q1 of this year: the average price of Pr-Nd alloy on March 31, 2025, was 543,000.00 yuan/mt, compared with the average price of 489,000 yuan/mt on December 31, 2024, the average price increased by 54,000 yuan/mt, an increase of 11.04%. The daily average price of Pr-Nd alloy in Q1 this year was 528,017.54 yuan/mt, an increase of 55,965.82 yuan/mt compared to the daily average price of 472,051.72 yuan/mt in Q1 2024, representing a growth rate of 11.86%.

According to SMM quotes, on July 2, the average price of Pr-Nd alloy was 545,500 yuan/mt, unchanged from the previous trading day. Currently, the rare earth market continues to operate steadily. Influenced by the stable prices in the oxide market, the overall rare earth market remains stable. However, due to the lack of improvement in end-use demand, the order-taking situation of downstream magnetic material enterprises has not improved, leading to low expectations for future prices among magnetic material enterprises and a weak willingness to build up inventories. They mainly adopt a purchasing as needed strategy. As a result, overall market transactions are weak, and there is a strong wait-and-see sentiment. In summary, influenced by the weak supply and demand, the rare earth market is in a state of equilibrium, with an overall calm performance and no significant price fluctuations. It is expected that in the short term, rare earth prices will continue to remain stable.