Yantai Zhenghai Magnetic Material (300224.SZ) released its report for 2011Q1-Q3, according to which, operating revenue reached RMB427 million, up 102.18% YoY. The net profit attributable to shareholders achieved RMB92 million, a substantial growth of 194.53% YoY. The growth benefited from its capacity improvement of NdFeB and product mix adjustment.

Downstream industry of Zhenghai mainly focuses on turbine manufacturers, and its dependence on wind power equipment market reached as high as 60-70% in 2008-2010. In 2011, Zhenghai actively adjusts its product mix and customer structure, with the aim to reduce the dependence on wind power. Since then, its sales in inverter air conditioner, automotive and overseas markets have increased significantly. With diversified downstream demands, the risk caused by single client decreased continuously.

In 2011, Zhenghai’s newly added capacity reaches 200 tons, and its Phase III capacity of 800 tons will reach full production by the mid of 2012. Besides, its IPO project with capacity of 2,000 tons will go into production in 2013Q3 and achieve full production by the mid of 2014. By then, the total capacity will be 6,300 tons, which surpass that of Ningbo Yunsheng (600366.SH), and make it become the second largest rare earth permanent magnet manufacturer in China.

NdFeB Capacity of Yantai Zhenghai Magnetic Material, 2009-2014E (ton)

Source: ResearchInChina