HTSC·2025-08-20 09:59Investment Rating - The report maintains an "Accumulate" rating for the company [1][5][7] Core Views - The company achieved significant growth in net profit, with a year-on-year increase of 154.81%, reaching a net profit of 305 million yuan in H1 2025 [1] - The rare earth recycling business has become profitable, contributing to the overall financial performance [2] - The company is progressing steadily with its capacity planning, aiming to reach an annual production capacity of 40,000 tons of high-performance rare earth permanent magnet materials by 2025 [3] - Export sales were impacted by policy changes but are expected to gradually recover as export licenses are obtained [4] Financial Performance - In H1 2025, the company reported revenue of 3.507 billion yuan, a year-on-year increase of 4.33% [1] - The gross margin for the NdFeB magnetic steel business improved to 16.02%, up 7.61 percentage points year-on-year [2] - The company’s subsidiary, Yinhai New Materials, achieved revenue of 78.89 million yuan and a net profit of 13.59 million yuan in H1 2025 [2] Capacity and Strategic Development - The company is on track to meet its strategic goal of building a 40,000-ton production capacity by 2025, with ongoing investments in new projects [3] - Initial deliveries of products for embodied robots have been made, indicating the company's growing capabilities in this area [3] Export and Market Outlook - The company’s overseas sales revenue in H1 2025 was 513 million yuan, a decrease of 13.58% year-on-year, but exports to the U.S. increased by 45.10% [4] - The report anticipates a gradual recovery in export activities as the licensing process improves [4] Profit Forecast and Valuation - The forecast for the company's net profit for 2025-2027 has been raised by 6.77%, 11.21%, and 21.42%, respectively, with projected net profits of 841 million, 1.198 billion, and 1.342 billion yuan [5] - The target price for the A-share is set at 35.69 yuan, reflecting an increase from the previous estimate of 24.29 yuan [5][8]