Nomura initiates coverage on Jinli Permanent Magnet with a Buy rating and a target price of HKD27.00

Overview

This report is Nomura’s first-ever coverage research on Jinli Permanent Magnet. The company is positioned as a global leading producer of NdFeB rare-earth permanent magnet materials, with applications in new energy vehicles, energy-efficient inverter air conditioners, wind power, robotics and industrial servo motors, 3C, energy-efficient elevators, and rail transit, among other areas. Nomura believes the company has production, customer reach, technology, and supply-chain advantages in the high-performance REPM market, with future growth expected from steady volume expansion, tighter and more stable upstream rare-earth pricing, and new uses such as humanoid robots.

Core views

The core views are: first, Jinli Permanent Magnet is a global leading supplier of high-performance NdFeB REPM, and the new Baotou capacity ramp-up is expected to support sales growth at a 12% CAGR for 2025-2028F, reaching 60ktpa effective raw billet capacity in 2028F. Second, high-performance REPM materials in humanoid robot motors help deliver higher torque with smaller size and lighter weight; each humanoid robot is expected to use 3–4kg of REPM, higher than the 2.0-2.5kg average per EV. Third, China dominates the rare-earth supply chain, and tighter quota and policy management may support NdPr pricing while improving the company’s earnings visibility. Fourth, the company uses cost-plus pricing and periodically adjusts ASP; together with long-term supply agreements and recycled resources, it is seen as supporting relatively stable gross margins.

Analysis framework

The report combines company fundamentals, industry supply-demand, customer applications, upstream resources, valuation multiples, and sensitivity analysis. At the industry level, it analyzes global NdFeB REPM demand, rare-earth reserves and output, concentration in rare-earth separation and magnet-material manufacturing, and China’s rare-earth policy and export controls. At the company level, it examines capacity expansion, downstream revenue mix, technological capabilities, supplier relationships, recycled resources, ASP adjustment mechanisms, gross margins, and earnings forecasts. On valuation, it derives the target price from FY27F EPS and a target P/E multiple, and compares valuation versus global peers in the rare-earth supply chain.

Methodology notes

• Valuation methodsprice_to_earnings

  25x FY27F EPS

  The target price is based on FY27F EPS of CNY0.93 and a 25x target P/E, consistent with the company’s 12-month forward historical trading P/E.

• industry_analysissupply_demand_analysis

  Rare-earth permanent magnet supply-demand and policy constraints

  The report incorporates global NdFeB REPM demand growth, slower Chinese rare-earth quota growth, import-mineral uncertainty, and export controls into supply-demand judgment.

• sensitivity_analysisearnings_sensitivity

  Sales and gross margin sensitivity

  The report states that each 1.0pp increase in FY27F sales could impact earnings by about 0.9pp, and each 1pp fluctuation in GPM could impact earnings by about 8.5pp.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Jinli Permanent Magnet 6680.HK

  Research target

  Strengths

  A global-leading NdFeB REPM manufacturer covering major EV OEMs, with GBD technology, Baotou capacity expansion, humanoid robot magnetic module opportunities, and long-term upstream supply agreements.

  Weaknesses

  High raw-material cost share in total cost, with gross margins affected by rare-earth metal prices, inventory costs, and ASP adjustment delays.

  Comparison

  Current valuation is about 19x FY27F P/E; the report argues it is below the global peer average of 37x, while the target P/E is 25x.

  Risks

  Downstream demand below expectations, delayed ASP adjustments, slower commercialization of humanoid robots, and further tightening of China’s rare-earth export policy.

• Jinli Permanent Magnet 300748.SS

  A-share security of the same company

  Strengths

  Represents the same operating entity as 6680.HK and benefits from the same rare-earth magnet and robotics industrial logic.

  Weaknesses

  The valuation and target price are mainly directed at H-share 6680.HK, and A-share valuation and price level were not analyzed separately.

  Comparison

  The report mainly uses H-share historical forward P/E and global peer comparisons.

  Risks

  Risks are broadly aligned with company fundamentals, with additional need to monitor A/H-share valuation gaps.

• rare-earth permanent magnet supply chain

  Upstream and industry mapping

  Strengths

  China holds a high share in rare-earth smelting/separation and magnet-material manufacturing, with high supply-chain concentration; stricter policy control could support pricing.

  Weaknesses

  Uncertainty from imported ore, Myanmar supply, export permits, and policy shifts.

  Comparison

  The report states that in 2024 China accounted for 91% of global rare-earth refining supply and 94% of magnetic materials manufacturing.

  Risks

  Policy tightening could support prices but may also restrict exports and affect overseas customer deliveries.

Key data

• RatingBuyNomura initiates coverage.
• Target priceHKD27.00Based on 25x FY27F EPS of CNY0.93.
• Current priceHKD19.30Price date disclosed in the table is 2026-07-03.
• Implied upside+39.9%Calculated from target and current prices.
• 2025-2028F revenue CAGR25%Driven by sales expansion and ASP improvement.
• 2025-2028F earnings CAGR32%The report forecasts three-year compounded profit growth.
• 2028F effective billet capacity60ktpaSupported by the gradual ramp-up of new Baotou capacity.
• REPM use per humanoid robot3-4kgHigher than the average 2.0-2.5kg per EV.
• 2026-2028F? humanoid robot revenue contribution in 2030F12%Report forecast.
• 2030F humanoid robot earnings contribution14%Report forecast.
• 2025 revenue from new energy vehicles and auto partsCNY3.9bnUp 30% year-on-year and 51% of total revenue.
• 2025 global passenger EV installation coverageabout 6.5mn carsThe company says this corresponds to a 33% share of the global market.
• 2026-2028F GPMabout 20%The report expects gross margin to remain broadly stable.
• 2026F-2028F GPM expansion20.5% to 21.9%Supported by improved revenue mix and higher magnetic module sales.
• 1H26 net profit guideCNY400-460mnYear-on-year growth 31%-51%.
• 2Q26E net profit guideCNY207-267mnYear-on-year growth 43%-85%.
• Market valueUSD3,385.0mnKey data on the report cover page.
• 3-month average daily turnoverUSD16.0mnKey data on the report cover page.

Impact & implications

If the report’s thesis holds, Jinli Permanent Magnet’s investment logic would expand from traditional EV, wind power, and energy-efficient air conditioner demand to emerging high-value applications such as humanoid robots and eVTOL. Tightening China rare-earth supply-chain policy could support upstream prices while improving earnings visibility for leaders that have long-term supply contracts, recycled resources, and cost-plus pricing mechanisms. For investors, the key questions are whether humanoid robot orders scale up, whether magnetic module share increases, whether ASP adjustments are timely, and whether rare-earth export controls affect overseas customer deliveries.

Risks

• New energy vehicle, wind power, and energy-efficient inverter air conditioner demand growth falls short of expectations, potentially affecting company volumes.
• Volatility in upstream rare-earth prices and delays in ASP adjustments may cause gross margin volatility.
• Commercialization, capacity ramp, or supplier-share allocation for humanoid robots may be slower than expected, weakening the long-term growth thesis.
• Further tightening of export policy for China-related rare-earth products could affect the company’s deliveries to overseas customers.
• Uncertainty in imported rare-earth ore sources and recycled supply could affect raw-material costs and supply stability.

What to watch

• The ramp-up progress of new Baotou capacity and achievement of the 2028F 60ktpa effective billet capacity target.
• Whether small-batch deliveries of humanoid robot motor rotors and magnetic modules can scale into volume orders.
• The price trajectory of NdPr metal and oxide, and the speed of the company’s ASP adjustments.
• Execution quality of long-term procurement agreements with upstream suppliers such as CNRE and CRE, and raw material security.
• Changes in China’s rare-earth production quota, traceability oversight, and export-licensing policies.
• End-demand trends in new energy vehicles, commercial EVs, offshore wind, VFAC, and eVTOL after 2026.
• Whether GPM rises from 20.5% in 2026F to 21.9% in 2028F as forecast by the report.