China Magnet Industry Roundup: Profits Rise as Beijing Guards the Export Gate

Highlights

• JL MAG, Ningbo Yunsheng and Tianhe Magnetic Materials led earnings growth, with Ningbo Yunsheng forecasting up to 187% profit increase in H1 2026
• Zhong Ke San Huan's 1.4% net margin and Earth-Panda's 60% capacity utilization reveal overcapacity and price pressure beneath the sector's headline growth
• China tightened dual-use export restrictions on June 22, targeting ten U.S. companies and reinforcing state control over rare earth magnet access
• Chinese producers are reducing heavy rare earth consumption while expanding into robotics motor components, widening their lead over Western competitors

---

Over the summer of 2026 thus far, China’s leading permanent-magnet producers reported rising sales, improving profits and deeper expansion into robotics. JL MAG Rare-Earth, Ningbo Yunsheng and Tianhe Magnetic Materials led the earnings acceleration, while Zhong Ke San Huan and Earth-Panda exposed the weak margins and underused capacity hiding beneath the boom. China’s magnet industry is not waiting for Western competitors to qualify production. Its manufacturers are expanding, reducing heavy rare earth consumption and moving from magnetic material into motor components. Meanwhile, Beijing controls which foreign customers can receive sensitive products. The factory floor and the export gate now reinforce each other.

Which Chinese Magnet Producers Are Pulling Ahead?

JL MAG Rare-Earth (300748.SZ; 6680.HK) forecast first-half net profit of RMB400–460 million (US$60–69 million), up 31%–51%, as estimated revenue rose approximately 30%. Revenue from robotics and industrial servomotors reportedly increased about 90%, while embodied-robot motor rotors reached small-batch delivery.

JL MAG is advancing 20,000 tonnes of additional capacity toward a stated 60,000-tonne annual target by the end of 2027. Its proposed 9.24% investment in the Baotou Rare Earth Products Exchange may improve market intelligence and supplier relationships, but it does not provide captive feedstock. Small-batch robot shipments also remain far from mass production.

Ningbo Yunsheng (600366.SH) forecast first-half net profit of RMB240–310 million (US$36–46.5 million), up 123%–187%. Management cited a stronger product mix, higher overseas revenue, new projects and improved margins. The forecast is impressive but unaudited; the final report must show whether operating cash flow and core magnet margins support the headline.

Tianhe Magnetic Materials (603072.SH) expects first-half revenue to rise approximately 30% and net profit to reach RMB73–93 million (US$11–14 million), up 37%–74%. Domestic revenue reportedly grew about 50%, while price increases helped offset elevated raw-material costs. Director and General Manager Chen Ya simultaneously disclosed plans to sell up to one million shares—an uncomfortable footnote to the growth story.

More Magnets Do Not Guarantee Strong Margins

Beijing Zhong Ke San Huan High-Tech (000970.SZ) reported first-half revenue of RMB3.61 billion (US$541.5 million), up 23.7%, but net profit increased only 11.9% to RMB49.2 million (US$7.4 million). Adjusted profit reached RMB32.3 million (US$4.8 million), up just 2.3%.

Higher sales and reduced heavy rare earth consumption improved gross margin, but competition and foreign-exchange losses absorbed much of the benefit. A net margin near 1.4% shows how industrial scale can coexist with weak economics.

ZHmag—Yantai Zhenghai Magnetic Material (300224.SZ) disclosed small-batch supply for humanoid-robot applications in July. Its materials support coreless and frameless torque motors. ZHmag’s heavy-rare-earth-free technology and established automotive business are industrially relevant, but “small batch” is not evidence of material robot revenue. No new half-year results were identified by the August 16 cutoff.

Earth-Panda Advanced Magnetic Material (688077.SH) supplied the period’s clearest warning against equating installed capacity with production. The company disclosed approximately 10,000 tonnes of annual sintered neodymium-iron-boron capacity—but only about 60% utilization. Raw-material price changes can take approximately three months to reach customers. Earth-Panda has developed 54H and 50SH grades without heavy rare earth additions, but its underused factories tell a harder story than its nameplate capacity.

Golden Dragon Adds Capacity—but the Announcement Predates the Window

Golden Dragon Rare Earth New Materials (Baotou) broke ground on a second 5,000-tonne magnet phase on April 24—before this review period, but important to the current competitive picture. The Xiamen Tungsten-controlled operation says its first 5,000-tonne phase has reached full capacity and targets Phase II trial production by December 2026. That remains a milestone to verify, not qualified commercial output.

Beijing’s Export Gate Remains the Strategic Weapon

On June 22, China tightened dual-use export restrictions against ten U.S. companies, including access to controlled rare earth products and magnets. The measure does not prohibit every Chinese magnet export. It demonstrates that foreign access remains licensed, conditional and politically reversible. The question is no longer whether China can produce magnets. It is whether Western industry can qualify alternatives before Beijing again narrows the gate.

REEx Reality Check

China combines separation, metals, alloys, magnet production, engineering talent and state control over exports. Yet the sector is not uniformly healthy. Zhong Ke San Huan’s thin margins and Earth-Panda’s 60% utilization reveal price competition and possible overcapacity. Investors should not confuse China’s national industrial dominance with strong economics at every producer.

What to Watch

• August 2026: Audited half-year results and operating cash flow.
• December 2026: Golden Dragon’s Phase II trial-production target.
• End-2027: Whether JL MAG reaches 60,000 tonnes without sacrificing utilization or margins.

Bottom Line

China is manufacturing more magnets with less heavy rare earth input while retaining control over foreign access—the West remains several industrial cycles behind.

REEx Connection

• JL MAG Rare-Earth: High-performance magnets and motor rotors
• Ningbo Yunsheng: Automotive, electronics and industrial magnets
• Zhong Ke San Huan: Major magnet producer within the Chinese Academy of Sciences corporate system
• Tianhe Magnetic Materials: Neodymium-iron-boron and samarium-cobalt magnets
• ZHmag: Automotive magnets and heavy-rare-earth-reduction technology
• Earth-Panda: Magnets and magnetic components
• Golden Dragon Rare Earth/Xiamen Tungsten: Integrated oxides-to-magnets platform
• Chinese Ministry of Commerce: Export-control authority

Sources

• JL MAG operating update (opens in a new tab)
• Ningbo Yunsheng earnings forecast (opens in a new tab)
• Zhong Ke San Huan results (opens in a new tab)
• Tianhe Magnetic Materials forecast (opens in a new tab)
• ZHmag investor briefing (opens in a new tab)
• Earth-Panda capacity disclosure (opens in a new tab)
• Golden Dragon Phase II project (opens in a new tab)
• June 22 export restrictions (opens in a new tab)