正海磁材：聚焦磁材主业，盈利筑底

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative performance increase of over 15% compared to the benchmark index within the next 6 to 12 months [1][14]. Core Insights - The company is focusing on its core magnetic materials business, with profitability expected to stabilize after a challenging period due to declining rare earth prices and intensified industry competition [1]. - The company reported a significant decline in revenue and net profit for the first three quarters of 2024, with revenue at 3.81 billion yuan, down 17.7% year-on-year, and net profit at 189 million yuan, down 48.5% year-on-year [1]. - The report highlights that the company is optimizing its operations and scaling back on its electric vehicle motor drive system business, which has been consistently losing money [1]. Financial Performance Summary - Revenue Forecast: The company’s revenue is projected to decrease from 5.87 billion yuan in 2023 to 5.31 billion yuan in 2024, before recovering to 6.40 billion yuan in 2025 and 7.78 billion yuan in 2026 [1][11]. - Net Profit Forecast: The net profit is expected to decline from 448 million yuan in 2023 to 325 million yuan in 2024, with a gradual recovery to 379 million yuan in 2025 and 454 million yuan in 2026 [1][11]. - Earnings Per Share (EPS): EPS is forecasted to drop from 0.55 yuan in 2023 to 0.40 yuan in 2024, before increasing to 0.46 yuan in 2025 and 0.55 yuan in 2026 [1][11]. - Cash Flow: The company is expected to experience negative cash flow from operating activities in 2024, with a forecast of -173 million yuan, followed by a positive cash flow of 891 million yuan in 2025 [10][11]. Market and Industry Context - The report notes that the average price of domestic praseodymium-neodymium oxide has decreased significantly, impacting the company's product pricing and sales [1]. - Despite the challenges, the company is expanding its production capacity and market reach, particularly in the high-performance neodymium-iron-boron permanent magnet materials sector, with a notable increase in sales in the home appliance market [1].