JL Mag Rare-Earth Expects Boost from Growing New Energy Vehicles

JL Mag Rare-Earth Co., Ltd., a manufacturer of rare earth permanent magnets, expects new energy vehicles (NEVs) to account for most of its sales in the coming years, according to the company's chairman.

"New energy vehicles are our key market segment right now," said Cai Baogui in a recent press conference. "The fastest growing area for the company over the next three years will be NEVs. JL MAG is also committed to fighting climate change and will help achieve carbon neutrality in China and around the world."

The Tesla supplier received big orders last year from BYD, SAIC Motor, BAIC Motor, NIO, Li Auto, and Xpeng. JL Mag Rare Earths provided the automaker with enough magnetic material to enable them to produce 800,000 NEVs in the first nine months of last year, up from 450,000 vehicles in 2019.

According to Frost & Sullivan, JL Mag Rare-Earth is the world's top producer of rare-earth permanent magnet materials in 2020, with a market share of about 14.5%. Rare-earth magnetic materials are critical to many industries, including smart electronics, wind turbines, electric vehicles, and military equipment.

The company plans to raise HK$5.06 billion (US$648 million) from the Hong Kong offering with an over-allotment option that could bring in as much as US$745 million. It will sell shares at prices ranging from HK$33.80 to HK$40.30 per share. JL Mag Rare-Earth, which has been listed in Shenzhen since 2018, is expected to finalize the offering price on Jan. 7 and the shares will start trading on Jan. 14.

The company said it will use a portion of the proceeds to build a manufacturing facility in Ningbo, Zhejiang Province, China, which is expected to begin operations in 2023. A portion of the funds will be used for acquisitions and research and development. "Annual production of high-performance NdFeB permanent magnet material blanks is expected to reach 23,000 tons in 2022 and 40,000 tons in 2025," said Manager Cai.

Neodymium permanent magnets or NdFeB account for the majority of global production of rare earth magnets. They are called permanent magnets because they retain their magnetic properties even when exposed to magnetic fields. China, which plans to reach peak carbon by 2030 and carbon neutrality by 2060, has been driving the electric vehicle industry for years, making China the world's largest market for electric vehicles.

In 2021, NEV sales on the continent are expected to reach 2.4 million units, more than double the 1.17 million units sold a year ago. The China Passenger Vehicle Association forecasts NEV sales of at least 5.5 million units in 2022. JL Mag Rare Earths expects to benefit from significant opportunities in the growing new energy vehicles.

JL MAG Rare-Earth Co., Ltd., which listed on Shenzhen Stock Exchange on September 21st 2018, is a professional high-tech enterprise integrating R&D, production and sales of high-performance NdFeB permanent magnetic materials. It is a leading supplier of global new energy resources and environmentally friendly core applied materials. The products of the company are widely used in various fields.

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