HONG KONG, Dec 31, 2021 - (ACN Newswire) - JL MAG Rare-Earth Co., Ltd. ("JL MAG" or the "Company", together with its subsidiaries, the "Group", stock code: 6680.HK), a leading producer of high-performance rare earth permanent magnets ("REPMs"), announced the proposed listing of its H shares on the Main Board of The Stock Exchange of Hong Kong Limited ("SEHK") today.

JL MAG plans to offer an aggregate of 125,466,000 H shares (the "Offer Shares") under the Global Offering (subject to the Over-allotment Option), comprising an international offering (the "International Offering") of 112,919,200 shares (subject to adjustment and Over-allotment Option) and Hong Kong public offering (the "Hong Kong Public Offering") of 12,546,800 shares (subject to adjustment), at a price range between HK$33.80 and HK$40.30 per Offer Share.

The Hong Kong Public Offering will open at 9:00 a.m. on 31 December 2021 (Friday) and close at 12:00 noon on 7 January 2022 (Friday) in Hong Kong. Dealings in Shares on SEHK are expected to commence at 9:00 a.m. on 14 January 2021 (Friday), with the stock code 6680.HK in board lots of 200 Offer Shares each.

CLSA Capital Markets Limited and BNP Paribas Securities (Asia) Limited are the Joint Sponsors. CLSA Limited, BNP Paribas Securities (Asia) Limited and DBS Asia Capital Limited are the Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers.

The A shares of JL MAG (Stock Code: 300748.SZ) have been listed on the ChiNext Market of the Shenzhen Stock Exchange (the "SZSE") since September 2018. The Company is now seeking the listing of its H shares on the Main Board of the SEHK as a dual primary listing alongside its A shares on the SZSE.

Global Leading Producer of High-Performance REPMS with Fast Growth

JL MAG is a leading producer of high-performance REPMs. According to Frost & Sullivan, the Company produced 9,612.9 tonnes of high-performance REPMs in 2020, ranking first in the world by high-performance REPM production volume with a market share of approximately 14.5%. Meanwhile, the Company applied grain boundary diffusion ("GBD") technology in producing 4,111 tonnes of high-performance REPMs in 2020, ranking first in the world's GBD REPM market with a market share of approximately 21.3%. Since its establishment, JL MAG has focused on the R&D, production and sales of high-performance NdFeB rare earth permanent magnets ("NdFeB PMs") used globally in the fields of new energy, energy conservation and environmental protection. The Company's products have a wide array of applications in downstream sectors including new energy vehicles ("NEVs") and automotive parts, permanent magnetic wind turbine generators ("PM wind turbine generators"), energy-saving variable-frequency air conditioners ("Energy-saving VFACs"), 3C products, energy-saving elevators, robotics and intelligent manufacturing.

JL MAG produces customized high-performance NdFeB PMs based on purchase orders from customers. Its production capabilities cover the entire production cycle of high performance NdFeB PMs, including R&D, mold development and manufacturing, blank production, finished product processing, surface treatment, magnetization, testing, manufacturing of magnetic component parts and packaging. The Company has strategically scaled up its production capacity in anticipation of the substantial growth of the downstream sectors. The Company's annual production capacity of high-performance NdFeB PM blank increased from 7,000 tonnes in 2018 to 12,800 tonnes in 2020, representing a CAGR of 35.2%. The Company is in process to further upgrade and expand the existing production bases in Ganzhou and the new production bases in Baotou and Ningbo. The annual production capacity of high-performance NdFeB PM blanks is expected to reach 23,000 tonnes in 2022 and 40,000 tonnes in 2025, respectively. The completion-based check and acceptance of construction for the Company's Baotou Production Base was completed in December 2021 and Baotou Production Base is expected to commence operation by the end of 2021 with a designed production capacity of 8,000 tonnes per annum of high-performance NdFeB PM blanks.

JL MAG has established a market-leading position in many key downstream sectors. In NEVs sector, the Company ranked second globally by the number of passenger NEVs that use its high-performance NdFeB PMs in 2020. The REPMs that it dispatched into the NEV sector were sufficient for equipping approximately 450,000 passenger NEVs with NEV drive motors, equal to approximately 14.5% of the total number of NEVs produced globally in 2020. In wind power sector, the Company was the largest supplier globally of high-performance NdFeB PMs used in the wind generator turbines in 2020 by newly installed capacity. It's high-performance REPMs dispatched to the wind power sector were sufficient for the production of PM wind turbine generators with an approximate aggregate installed capacity of 10 GW, equal to approximately 40% of the global PM wind power newly installed capacity in 2020. In Energy-saving VFACs sector, the Company was the largest supplier globally of high-performance NdFeB PMs used for the production of Energy-saving VFACs in terms of the number of energy-saving VFAC compressors equipped with high-performance NdFeB PMs produced by it in 2020, with a market share of approximately 31.5%.

During the Track Record Period, JL MAG achieved rapid financial growth and high levels of ROE. The Company's revenue increased from RMB1,282.0 million in 2018 to RMB2,288.7 million in 2020, representing a CAGR of 33.6%. The Company's revenue also increased from RMB915.5 million for the six months ended June 30, 2020 to RMB1,766.5 million for the six months ended June 30, 2021, representing an increase of 92.9%. The Company's net profit increased from RMB146.3 million in 2018 to RMB244.7 million in 2020, representing a CAGR of 29.3%. The Company's net profit also increased from RMB 91.6 million for the six months ended June 30, 2020 to RMB220.6 million for the six months ended June 30,2021, representing an increase of 140.8%. In 2020, the Company's gross profit margin, net profit margin and weighted ROE were 23.7%, 10.7% and 17.1% respectively. For the six months ended June 30, 2021, the Company's gross profit margin, net profit margin and annualized weighted ROE were 24.3%,12.5% and 20.7% respectively.

In-Depth Cooperation with Top Player Customers in New Energy and Energy Saving Industries to Capture Growing Downstream Demand

REPMs embody an inherent advantage in reducing carbon emission. With the global trends of carbon emission reduction, JL MAG's main downstream sectors are experiencing fast growth, which translates into strong and increasing demand for its products.

Leveraging its large production scale, high-quality product offerings, outstanding R&D capabilities, proprietary technologies and strong product delivery capability, JL MAG has entered into the supply chain systems of many global leading companies in its downstream sectors. In 2020, the Company's major customers included four of the top five players in the global NEV sector by sales volume in 2020, three of the top five players in the global wind power sector by 2020 newly added installed capacity and the top two household air-conditioner producers by production volume in China. In addition, in the 3C, energy-saving elevators, robotics and intelligent manufacturing, rail transit and other sectors, the Company has entered into the supply chain systems of a number of top-tier customers, including Bosch Rexroth and Kone Elevator. The Company's strong and integrated relationships with the top players in each of these sectors place it at a strategically advantaged position to capture the growing demand therefrom.

First-mover Advantage in the REPM Industry Characterized by Customer Stickiness and High Entry Barriers

The REPM industry is characterized by strong customer stickiness and high entry barriers. The quality of NdFeB PMs has a significant impact on the performance and quality of the customers' final products, so customers tend not to change their supplier easily. JL MAG leverages its professional and technical expertise in high-performance NdFeB PMs to participate in the new product design of the customers, assisting customers to optimize their products' performance and reduce production cost. Meanwhile, the Company exhibits high responsiveness to clients' specialized needs of producing non-standardized products. Its strong R&D capacity, supplemented with execution capability and quality control have enabled the Company to constantly meet the standards set by the customers, which in turn has contributed to its success in building and maintaining solid relationships with them.

Because of the high barriers in customers' accreditation, JL MAG's status as an accredited supplier of many leading customers enhances its brand recognition and reputation, enabling it to leverage the first-mover advantage to secure its established leading position in the industry and further expand the customer base.

Strong R&D Capabilities for Production Optimization and Global-leading GBD Technologies

The production of high-performance NdFeB PMs has high technical barriers. JL MAG optimizes the formulations to help the customers in the wind power sector reduce their production costs through lowering the medium and heavy rare earth added in the production of high-performance NdFeB PMs. In addition, the Company employs its proprietary GBD technology to achieve mass production and develop high-grade products for Energy-saving VFACs sector and NEVs and automotive parts sector that substantially reduce the use of medium and heavy rare earth while maintaining high performance. According to Frost & Sullivan, the GBD technology can generally reduce the use of medium and heavy rare earth by 50% to 70%. The Company's GBD technology is widely applied in the production of its high-performance NdFeB PM finished products in Energy-saving VFACs sector and NEVs and automotive parts sector. It is also applied in the production of certain high-performance NdFeB PM finished products in 3C sector.

Long-term and Stable Strategic Cooperation with Major Rare Earth Suppliers

JL MAG has maintained long-term and firm strategic cooperation with major rare earth suppliers. Five out of the six rare earth groups in China are the Company's rare earth suppliers. Among its suppliers, China Southern Rare Earth was the second largest rare earth mining group in China by annual rare earth mining quota which was 42,450 tonnes in 2021, accounting for approximately 25.3% of the national mining quota in the same year. Its output mainly comprises medium and heavy rare earth. China Southern Rare Earth was among the Company's five largest suppliers during the Track Record Period. The Company has also established firm and strategic cooperative relationship with key rare earth suppliers such as China Southern Rare Earth and China Northern Rare Earth to ensure the long-term and stable supply of rare earth. In China, light rare earth mines are mainly located in Baotou of the Inner Mongolia Autonomous Region while medium and heavy rare earth deposits are mainly located in southern regions, including Ganzhou, Jiangxi. As a result, the Company's premises in Ganzhou and Baotou endow it with cost advantage, convenient delivery and the stable and reliable supply of rare earth materials.

Moreover, on December 23, 2021, a new rare earth giant, namely, China Rare Earth Group Co., Ltd, was established through a merger of top state-owned operations. China Rare Earth Group Co., Ltd was jointly founded by Aluminum Corporation of China, China Minmetals Corporation, Ganzhou Rare Earth, China
Iron & Steel Research Institute Group and Grinm Group Corporation Ltd. The newly-established China Rare Earth Group Co., Ltd will operate under the direct supervision of SASAC. The establishment of China Rare Earth Group Co., Ltd is conducive to integrating resources, improving applications of new technologies and materials and promoting the long-term sound development of the rare earth industry.

Highly Experienced and Committed Management Team with Visionary Leadership and Proven Execution Capabilities

JL MAG's proven track record of successful operations and leading market position bears testament to its management team's leadership and execution prowess. Led by the Chairman and president, Mr. Cai Baogui, the Company has a deep bench of highly qualified core management team with complementary strengths and a R&D team which is led by two provincial level scientific and technological talents. The management team has deep industry background and extensive management and operational experience. Together with its senior management, employees' technical expertise, combined with extensive know-how accumulated in conducting R&D projects, JL MAG has become a critical supplier in the supply chain systems of leading companies in multiple carbon-reduction sectors, and achieving long track record of high-quality products thereby underpinning the Company to reinforce its established market presence and become the No. 1 global leader in the REPM market.

Mr. Cai Baogui, the Chairman, Executive Director and General Manager of JL MAG Rare-Earth Co., Ltd. said, "In response to climate change, governments in the world are taking active actions to promote new energy and reduce carbon emission. Specifically, China plans to reach carbon peak by 2030 and carbon neutrality by 2060. As REPMs embody an inherent advantage in reducing carbon emission, under the global trends of carbon emission reduction, the demand of REPMs for downstream industries will continuously increase. In order to capture the growing downstream demand, JL MAG plans to further scale up its production capacity, expand its industry chain through selective acquisitions or strategic investments, further strengthen its R&D efforts in improving the production techniques and diversify the current product portfolio, and grasp the strategic opportunity period of upward development of the industry to proactively expand the global business footprint. Looking forward, JL MAG is committed to facilitating the pursuit of carbon peak and carbon neutrality both in China and around the world through production and provision of high-performance NdFeB PMs and realizing its mission of 'Better Life with Rare Earths'."





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