DMEGC(SZ:002056)2022-12-06 10:56Company Overview - The company is engaged in the production of magnetic materials, specifically permanent and soft magnetic materials, with applications in various industries including home appliances, automotive, aerospace, and medical machinery [3][4]. Market Performance - The home appliance market has seen a sales decline of approximately 20% as of May 2016, with air conditioning inventory around 35 million units [4]. - The automotive sector experienced a decrease in traditional vehicle exports by about 25% and imports by 20%, while the new energy vehicle market is growing rapidly [4][5]. - Despite market downturns, the company's permanent magnetic ferrite division maintained a high operating rate of over 95%, with sales revenue stable compared to the previous year [5]. Product Applications - Permanent magnetic ferrite is primarily used in home appliances and automotive applications, while soft magnetic ferrite is utilized in consumer electronics, communication, automotive electronics, and new energy applications [5]. - The company holds a 90% market share in the microwave oven segment, indicating a dominant position [7]. Competitive Landscape - There is minimal substitution between neodymium iron boron and permanent magnetic ferrite due to differences in raw materials, cost, and application areas. Neodymium iron boron is significantly more expensive, being nearly ten times the cost of ferrite [6][7]. - The company competes effectively with international firms like TDK, boasting superior revenue and profitability compared to domestic peers [15]. Solar Energy Sector - The solar energy division has been operating at full capacity since late 2015, with a conversion efficiency of 20.2% for standard monocrystalline cells and 21.2% for high-efficiency cells [9][10]. - The company has strategically avoided high-risk clients in regions with fluctuating electricity subsidies and is expanding into international markets such as Europe, Japan, India, and Africa [10]. Financial Projections - The company has invested over 400 million CNY in the development of its power battery segment, projecting future revenues of 1.2 to 1.3 billion CNY and a net profit exceeding 100 million CNY [11]. Sales and Production Strategy - The company primarily employs a direct sales model with a production cycle typically under three months, ensuring high turnover rates [12][13]. - International sales account for over 30% of total sales, with a focus on expanding in established and emerging markets [14]. Management and Employee Engagement - The company implemented an employee stock ownership plan in June 2015, involving 49 employees, including board members and key personnel, with a share price of 22.46 CNY per share [16].