We are a leading producer of high-performance rare earth permanent magnets (“REPMs”). We ranked first in the world by high-performance REPM production volume in 2020 with a market share of approximately 14.5%, according to Frost & Sullivan. In particular, we applied grain boundary diffusion (“GBD”) technology in producing 4,111 tonnes of high-performance REPMs in 2020, ranking first in the world’s GBD REPM market with a market share of approximately 21.3%, according to Frost & Sullivan. Since our establishment, we have focused on the R&D, production and sales of high-performance NdFeB rare earth permanent magnets (“NdFeB PMs”) used globally in the fields of new energy, energy conservation and environmental protection. Our products have a wide array of applications in new energy vehicles (“NEVs”) and automotive parts, permanent magnetic wind turbine generators (“PM wind turbine generators”), energy-saving variable-frequency air- conditioners (“Energy-saving VFACs”) and other sectors. We believe that, by leveraging our large production capacity, high-quality product offerings, outstanding R&D capabilities, proprietary technologies and strong product delivery capability, we are able to effectively address the needs of, and forge cooperative relationships with, our customers, including global leaders in their respective industries. Our Company was listed on NEEQ from December 2015 to January 2018. The A Shares of our Company have been listed on the ChiNext Market of the Shenzhen Stock Exchange (stock code: 300748) since September 2018. We are seeking to list our H Shares on the Main Board of the Stock Exchange as a dual primary listing alongside our A Shares on the Shenzhen Stock Exchange.
We believe that we are well-positioned in a booming industry to capitalize on the strong growth prospects in the downstream industries as the world consensus on global climate change leads to carbon reduction as a key dimension of environmental protection. In response to climate change, governments in the world are taking active actions to promote new energy and reduce carbon emission. Specifically, China plans to reach carbon peak by 2030 and carbon neutrality by 2060. REPMs embody an inherent advantage in reducing carbon emission. According to Frost & Sullivan, over 50% of the global electricity is consumed by electric motors, and REPM electric motors could save up to 15% to 20% of energy compared with traditional electric motors. Moreover, the application of REPMs enables variable-frequency household appliances, NEVs and automotive parts and 3C intelligent electronic products to be more lightweight and miniaturized, which is in line with consumers’ preference. According to Frost & Sullivan, the global consumption of REPMs, mostly comprising NdFeB PMs, increased from approximately 146,600 tonnes in 2015 to 209,500 tonnes in 2020 and is expected to further increase to 305,200 tonnes in 2025.
We started the R&D and production of high-performance NdFeB PMs for use in wind power generators in 2009 and 2010, respectively, and have since expanded our business in emerging sectors that have achieved robust growth in recent years and still hold significant potential for future growth. We are committed to facilitating the pursuit of carbon peak and carbon neutrality both in China and around the world through our production and provision of high-performance NdFeB PMs, guided by our mission of “Employing rare earth to create better life”. We uphold our core value of “Customer Orientation and Value Co-creation” and aim to achieve “leading technology, reliable quality, on-time delivery, upgraded management (service), capital facilitation and transformational development”. Under the leadership of our management team with deep industry background and extensive management and operational experience, we have become a critical supplier in the supply chain systems of leading companies in multiple carbon-reduction sectors. We are striving to reinforce our established market presence and become the No. 1 global leader in the REPM market, according to Frost & Sullivan.
We produce customized high-performance NdFeB PMs based on purchase orders from our customers. Our production capabilities cover the entire production cycle of high- performance NdFeB PMs including R&D, mold development and manufacturing, blank production, finished product processing, surface treatment, magnetization, testing, manufacturing of magnetic component parts and packaging which enables us to carry out comprehensive control and management of the entire process flow. In anticipation of the substantial growth of our downstream sectors, we have strategically scaled up our production capacity during the Track Record Period. Our annual production capacity of high-performance NdFeB PM blanks increased from 7,000 tonnes in 2018 to 8,800 tonnes in 2019, and further to 12,800 tonnes in 2020, representing a CAGR of 35.2% from 2018 to 2020.
We have secured the supply of raw materials through forging long-term and stable strategic cooperations with major rare earth suppliers. Among our suppliers, China Southern Rare Earth was the second largest rare earth mining group in China by annual rare earth mining quota which was 42,450 tonnes in 2021, accounting for approximately 25.3% of the national mining quota in the same year. Its output mainly comprises medium and heavy rare earth. China Southern Rare Earth is a subsidiary of Ganzhou Rare Earth, which in turn has been the shareholder of the Company since 2009 and was among our five largest suppliers during the Track Record Period.
We have strong R&D capabilities for production optimization and global-leading proprietary technologies. We optimize product formulations to help our customers in the wind power sector reduce their production costs through lowering the medium and heavy rare earth added in the production of high-performance NdFeB PMs. On the other hand, our GBD technology, which is one of the most advanced technologies in global REPM industry and is currently applied by less than ten REPM manufacturers in the world, according to Frost & Sullivan, can significantly reduce the use of medium and heavy rare earth in the production of high-performance NdFeB PMs used in NEVs, energy-saving VFACs and other downstream products, thereby reducing raw material costs while maintaining high performance at high working temperatures. GBD technology is widely applied in the production of our high- performance NdFeB PM finished products in energy-saving VFACs sector and NEVs and automotive parts sector as production of high-performance NdFeB PMs in these sectors requires higher usage of medium and heavy rare earth as compared to production of high-performance NdFeB PMs in other sectors, and is also applied in the production of certain high-performance NdFeB PM finished products in 3C sector. In 2020, we applied GBD technology in producing 4,111 tonnes of high-performance REPMs, ranking first in the world’s GBD REPM market with a market share of approximately 21.3%, according to Frost & Sullivan.
During the Track Record Period, we achieved rapid financial growth and high levels of ROE. Our revenue increased from RMB1,282.0 million in 2018 to RMB1,630.1 million in 2019 and further to RMB2,288.7 million in 2020, representing a CAGR of 33.6% from 2018 to 2020. In 2020, our weighted ROE was 17.1%.
Source: JL MAG Rare-Earth (06680) Prospectus (IPO Date : 2021/12/31) |