China's rare earth permanent magnet industry leader, high-performance NdFeB permanent magnet material leader JSJL permanent magnet technology group announced the 2019 annual report on March 24. During the reporting period, the company's sales gross profit margin was 21.57%, continuing to maintain industry leadership and revenue of nearly 16.97 100 million yuan, an increase of 31.61% year-on-year.
Significant breakthrough in market share in NdFeB materials
Wind power business revenue exceeds 120%
According to data released by the US Geological Survey (USGS), China's rare earth reserves in 2018 were 44 million tons, accounting for 39% of global reserves; global rare earth output was about 170,000 tons, and China's output accounted for more than 70%. After the global industrial transfer, with the increasing consolidation of absolute advantages in rare earth cost and technology, my country has become an important global production base and consumer market for NdFeB permanent magnet materials.
The upstream of the NdFeB magnetic material industry chain is mainly the mining, separation and smelting of rare earth ore. The midstream is a deep processing enterprise of NdFeB, and the downstream is traditional application fields such as consumer electronics and basic industries. High-performance NdFeB permanent magnet materials are mainly used in new energy and energy saving and environmental protection fields such as wind power generation, new energy vehicles and auto parts, energy-saving inverter air conditioners, energy-saving elevators, robots and intelligent manufacturing, as well as traditional consumer electronics fields. According to different manufacturing processes, NdFeB magnetic materials can be divided into three categories: sintering, bonding and hot pressing. Among them, sintered NdFeB is the rare earth permanent magnet material with the highest output and the most extensive application, accounting for more than 90%. The production capacity of China's rare earth industry still needs to be integrated.
There are about 150 rare earth permanent magnet production enterprises in China, and the industry's production capacity is about 400,000 tons. In 2018, the domestic production of sintered NdFeB was 155,000 tons, of which 12 companies with an annual output of more than 3,000 tons accounted for 40% of the market. Internationally, after the integration and adjustment of the rare earth permanent magnet industry, there are currently only four large sintered NdFeB producers, such as well-known companies such as Shin-Etsu Chemical, Hitachi Metals and TDK. At the end of 2019, JSJL, after capacity integration, already has a production capacity of 10,000 tons of sintered NdFeB materials, which is a significant increase compared to 6,000 tons in 2017 and 7,000 tons in 2018. This is the key to the company's consolidation of its gross margin advantage in the industry.
In addition, wind power, new energy and energy conservation and environmental protection, consumer electronics and other industries will maintain a rapid growth trend in the foreseeable future, especially the new energy automobile industry, which has maintained an increase of more than 50% in the past three years. These factors provide a broad market space for my country's high-performance NdFeB permanent magnet materials industry. According to the comprehensive data of various industries in 2018, the traditional automotive sector accounts for nearly 40% of global high-performance NdFeB demand, and new energy vehicles account for nearly 12%; in addition, wind power accounts for 10%, consumer electronics, and inverter air conditioners account for about 9%, energy-saving appliances accounted for 8.4%. Since its establishment in August 2008, JSJL has successfully realized the coverage of the entire industry chain, and its main business field has obvious advantages. It has become the world's leading supplier of magnetic steel for wind power applications, as well as a leading supplier of new energy vehicles and energy-saving inverter air conditioners in China.
2019 is an important year for China's wind power industry. The country's new wind power installed capacity has reached 25.7GW, and the cumulative installed capacity has reached 210GW, of which the total installed capacity of onshore wind power is 204GW, and the cumulative installed capacity of offshore wind power is 5.93GW. Planning (210GW on land, 5GW at sea). Benefiting from policy promotion, as the world's leading supplier of magnetic steel for wind power applications, Jinli Permanent Magnetic continues to exert its core business in 2019, further thickening the added value of the extension of the industrial chain, and the performance of wind power-related businesses is the most prominent. The announcement shows that benefiting from the growing demand of the domestic wind power industry and the growth of the company's overseas wind power business, Jinli Permanent Magnet has ushered in an outbreak of performance in the field of wind power, with revenue reaching 855 million yuan, a substantial increase of 121.40% over the same period last year.
JSJL has performed well in the field of energy-saving inverter air conditioners. The company is a magnet supplier of Midea, Shanghai Highly, Mitsubishi, Gree and other well-known brands. In 2018, it achieved sales of magnet steel of 371 million yuan; in 2019, the company's revenue in the field of energy-saving inverter air conditioners was 422 million yuan, an increase of 13.74 from the same period last year. %. At the same time, the company has also been fully affirmed by strategic customers in the field of energy-saving inverter air conditioning, and won the Midea Group Mechanical and Electrical Division 2019 "Technical Innovation Award" and "Excellent Supplier of the Year" title, Mitsubishi Electric Compressor Co., Ltd. 2019 "Quality Award" , Shanghai Highly Electric Co., Ltd. 2019 "Best Integrity Contribution Award".
JSJL permanent magnet can maintain its advantages in gross profit margin and core business, which is inseparable from the company's long-term R&D investment. The company's R&D to revenue ratio in 2016 and 2017 was 5.76% and 7.48%, ranking first in the industry; the industry's R&D investment declined in 2018 as a whole, and the expenditure rebounded in 2019. During the reporting period, JSJL permanent magnet invested more than 64 million yuan in research and development, a year-on-year increase and a positive rate of 15.54%. The research and development projects covered materials engineering, process optimization, robotics and automation applications, surface treatment, and recyclable technologies. The company actively cooperates with customers in new product development and iterative product upgrades. It has researched and developed more than 1,000 new samples throughout the year, and R&D achievements such as N56, 54SH, 54UH, 45AH and other super-high grades, and 45SH weightless rare earth products have won praise from many strategic customers. And won the "2019 Ganzhou Mayor Quality Award". In terms of patents, in 2019, JXJL permanent magnets added 7 new patents, and currently has a total of 30 patents, including one each in the United States, the European Union and Japan.
3C business layout accelerated
The "Notice of the National Energy Administration on the Construction of Wind Power and Photovoltaic Power Generation Projects in 2020" was recently announced, with a total industrial subsidy of 1.5 billion yuan. According to relevant policies, construction of wind power projects must start within two years. After 2021, wind power and thermal power will be connected to the grid at the same price. In this context, wind power operators have been full of projects in hand in the past two years. The industry's pre-installation in 2019 and 2020 is a definite trend. 2019-2020 is expected to set off a new wave of pre-installation.
According to Bloomberg New Energy data, as of the end of the third quarter of 2019, China's approved wind power project reserves totaled 117GW, and most of the stock projects will be completed by the end of 2020. In 2019, China's newly added hoisting capacity reached 28.9GW, an increase of 37% compared to 2018, and maintained rapid growth. Among them, the company's core customer Goldwind Technology has a new hoisting capacity of 8.01GW in 2019, ranking first in the list. Thanks to the industrial relationship and cooperation history with Goldwind Technology, as well as its own technological advantages, JSJL permanent magnet is still expected to share the feast of wind power industry development in the later period.
New energy vehicles are the trend of the future. The decline of domestic new energy subsidies in China has led to a slowdown in domestic sales growth in the first half of 2019; according to the draft for solicitation of the "New Energy Vehicle Industry Development Plan (2021-2035)" issued by the Ministry of Industry and Information Technology, by 2025, China's new energy vehicles and new vehicles The proportion of sales will reach about 25%. In contrast, the timetable for the ban on the sale of fuel vehicles overseas has been successively launched. The Netherlands, Germany, and the United Kingdom plan to ban the sale of internal combustion engine vehicles in 2025, 2030, and 2040, respectively. ; Ford will reduce the proportion of fuel vehicles to 10-25% by 2025. According to the forecast of Zhongtai Securities Research Institute, the compound annual growth rate of global new energy passenger car sales from 2019 to 2023 will be 33%, and the sales of new energy passenger cars will reach 7.87 million units in 2023, and the corresponding global new energy vehicle drive motors The market capacity of NdFeB is about 2.7 billion yuan. In this field, the business layout of JSJL Permanent Magnet has been successfully extended overseas, overcoming the bottleneck limited to the domestic market, and entering the supply chain of many leading companies in the global new energy vehicle industry, laying a solid foundation for deepening market expansion in this field. The company and Bosch While the Group has maintained friendly cooperation for many years, the company has become a supplier of rare earth permanent magnetic materials for the Volkswagen Group MEB pure electric platform project and U.S. General Motors BEV3 global electric vehicle platform. . JSJL permanent magnet is ready for the new energy vehicle business.
The 5G era has come and expanded the development space of the 3C industry. According to IDC's forecast, global smartphone shipments are expected to stop falling and increase by 1.6% year-on-year in 2020; by 2023, global smartphone shipments are expected to reach 1.485 billion units, while 5G mobile phone shipments will occupy the world 26% of total shipments. The rapid development of wearable devices will provide individual users with 5G applications in work, life and entertainment. According to a research report released by Gartner, it is expected to reach 453 million units by 2022. The rise of 3C smart terminal products has accelerated the speed of product replacement in the consumer electronics industry, and has created a huge demand for magnetic materials and magnetic components in the 3C field. While deepening its core business areas, Jinli Permanent Magnet continuously enriches the diversified layout and cultivates new performance growth points.
JSJL is accelerating the implementation of the Ningbo 3C field magnetic material product processing base project, so as to cultivate and develop the company's 3C field business, enhance the company's market competitiveness in the 3C field magnetic materials, and ensure the product supply capacity of customers in this field.