Highlights
- Zhenghai Magnetic Material receives new export license for medium- and heavy-rare earth elements under China’s 2025 regulatory regime
- Company reports strong revenue growth in Q1 2025, with significant increases in NdFeB magnet sales, particularly in automotive sectors
- Positioned as a key player in advanced technology supply chains, developing innovative magnet technologies for electric vehicles, robotics, and clean energy applications
In a noteworthy development for the rare earth supply chain, Zhenghai Magnetic Material Co. (opens in a new tab) confirmed it has received a new export license for medium- and heavy-rare earth elements—among the first firms to do so under China’s tightened 2025 regulatory regime.
The company, a top-tier producer of neodymium-iron-boron (NdFeB) permanent magnets, announced on July 1 via China’s investor interaction platform that operations remain “normal” and it is actively coordinating with regulators as further export permits are approved. This update, reported by Shanghai Metals Market (opens in a new tab), signals continuity for international buyers dependent on dysprosium and terbium—two critical heavy rare earths now under stricter Chinese controls.
Zhenghai’s early license approval may give it a short-term edge over domestic competitors and international suppliers scrambling for access. In Q1 2025, Zhenghai posted a 24.4% year-over-year revenue gain, with NdFeB magnet sales up 31%, including a 48% surge in the automotive sector. Yet net profit declined by 10.9% as raw material cost volatility and competition squeezed margins.
The company also reported growing sales into smart electronics, energy-efficient appliances, and humanoid robotics—underscoring rare earths’ increasing role in next-gen technology sectors.
Still, risks remain. While praseodymium-neodymium (PrNd) alloy prices showed signs of life in early 2025, SMM notes that downstream magnet producers remain cautious amid weak demand and low inventory buildup. Zhenghai acknowledged these headwinds, citing soft order-taking and price pressures that could destabilize recovery.
Key investor questions:
- Will Zhenghai’s license status lead to price premiums or contractual advantages in restricted global markets?
- Can volume growth overcome profit compression if raw material costs remain volatile?
- How vulnerable is Zhenghai’s license to further political tension or export policy tightening?
As Beijing exercises sharper control over critical mineral flows, Zhenghai’s near-term stability could serve as both buffer and bellwether in a fragile, politicized global rare earth market.
The Company
Yantai Zhenghai Magnetic Material Co., Ltd. is listed on the ChiNext board of the Shenzhen Stock Exchange under ticker 300224.SZ has emerged as a pillar of China’s permanent magnet industry. Founded in 2000 and headquartered in Yantai, Shandong Province, the company employs over 3,100 people. It has established itself as a global leader in rare earth magnet production, particularly in high-performance neodymium-iron-boron (NdFeB) materials. With deep roots in advanced materials research, Zhenghai’s operations now extend beyond China, with subsidiaries in the U.S., Germany, Japan, and Korea, reinforcing its international footprint.
Zhenghai’s core business lies in developing and manufacturing rare-earth permanent magnets and motor drive systems for new energy vehicles. Its technologies power applications across electric vehicles, wind turbines, smart electronics, energy-efficient appliances, robotics, and industrial automation. What sets the company apart is its mastery of proprietary technologies that reduce reliance on costly heavy rare earths while maintaining performance. Innovations like ZHOFP (Zhenghai Oxygen-Free Process), TOPS (Technology of Optimizing Particle Size), and THRED (Heavy-Rare-Earth Diffusion) enable superior magnetic performance and thermal stability with reduced material intensity—key in a market navigating both price volatility and geopolitical constraints.
Financially, Zhenghai reported robust topline growth in 2024, posting ¥5.54 billion ($770 million USD) in revenue and ¥644 million in gross profit, though net income dipped to ¥92 million, pressured by raw material costs and competitive pricing. Its balance sheet reflects ambition, with ¥8.78 billion in assets and a relatively high debt-to-equity ratio near 91%—a signal of aggressive investment in capacity and innovation.
Leadership under Chairman Qingkai Wang, President Zhiqiang Li, and CFO Bo Gao has guided the company through rapid expansion phases, including a ¥1 billion (~$140 million) raise in 2020 to increase low-weight NdFeB capacity by 5,000 tons per year.
Today, Zhenghai stands as a national high-tech champion in the rare earth industry. Its commitment to reducing heavy rare earth dependence, securing early export licenses amid tightening Chinese controls, and supplying advanced magnet materials to sectors like EVs and humanoid robotics places it at the heart of global clean energy and defense supply chains. However, with tightening margins and macro uncertainty, Zhenghai’s challenge will be balancing innovation and resilience while navigating policy turbulence at home and abroad.
Rare Earth Exchanges™ empowers retail investors and industry watchers with reliable intelligence across the rare earth and critical minerals supply chain. Visit us at: www.rareearthxchanges.com (opens in a new tab)
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