Core Viewpoint - Tianhe Magnetic Materials (603072.SH), a leading company in rare earth permanent magnets, is facing a minor financial setback due to the freezing of some funds related to a construction contract dispute, while simultaneously planning new investments in projects [1][5]. Financial Impact - The company announced that 7.1236 million yuan of its fundraising account has been frozen due to a legal dispute with Shanxi Erjian Group Co., Ltd. This amount represents 0.35% of the company's latest audited net assets and is not expected to significantly impact the company's fundraising or operational capabilities [5][6]. - The frozen funds are linked to a project aimed at producing 3,000 tons of high-performance neodymium-iron-boron for electric vehicles, with a total planned investment of 249 million yuan, of which 81 million yuan has been invested so far, indicating a progress rate of 32.63% [6]. Performance Trends - The company's revenue and net profit have been declining from 2022 to 2024, with revenues of 2.885 billion yuan, 2.651 billion yuan, and 2.590 billion yuan, and net profits of 190 million yuan, 161 million yuan, and 132 million yuan respectively. In the first half of 2025, revenue and net profit further dropped to 940 million yuan and 3.5 million yuan, reflecting year-on-year declines of 25.8% and 47.1% [7][8]. - The decline in performance is attributed to increased competition and a drop in product prices, with the average selling price of sintered neodymium-iron-boron decreasing by 35.22% from 474,400 yuan/ton to 307,300 yuan/ton between 2022 and 2024 [8][11]. Market Conditions - The rare earth materials market has seen fluctuations, with prices for key raw materials like praseodymium-neodymium rising from 423,200 yuan/ton in early 2024 to 543,400 yuan/ton by June 2025 [8]. - The company has been affected by export control policies, which have delayed shipments to overseas clients, but it is actively working to expand its domestic market presence [8]. Capacity and Expansion Plans - Tianhe Magnetic Materials has consistently operated at high capacity utilization rates, exceeding 100% in recent years, and is planning to invest 850 million yuan in a new project for high-performance rare earth magnets and components [9][10]. - The new project is expected to enhance production capabilities and address the ongoing competitive pressures in the market [9][10].
稀土龙头天和磁材部分存款遭冻结，刚拟8.5亿元投资新项目