New Stocks Outlook | Ningbo Yunsheng: After the performance "squat jump", how should we view the growth potential?

On June 15, the official website of the Hong Kong Stock Exchange quietly posted a prospectus - Ningbo Yunsheng Co., Ltd. (referred to as "Ningbo Yunsheng") officially submitted an application for an H-share listing, with CICC as the sole sponsor. This Ningbo manufacturing industry champion that has been deeply involved in the neodymium iron boron industry for more than thirty years, after listing on the Shanghai Stock Exchange for 26 years, has now knocked on the door of the Hong Kong capital market. As of the close on June 18, the company's total A-share market value is approximately RMB 16.387 billion. "Second-generation entrepreneur" Zhu Xiaodong is at the helm, with himself, his father Zhu Yunde, his mother Dong Weizhen, and their concerted action parties holding approximately 34.52% of the shares. Twenty-six years after listing in Shanghai, and twenty-six years later knocking on the door of Hong Kong. The "dual capital platform" dream of this Ningbo manufacturing industry champion is coming true. So, what is the investment value of Ningbo Yunsheng? From "squatting" to "jumping", the performance V-shaped reversal According to reports, Ningbo Yunsheng is a leading global supplier of neodymium iron boron permanent magnets and first entered the rare earth permanent magnet industry in 1996. The company mainly focuses on the development of high-performance neodymium iron boron permanent magnets through deep technological accumulation and continuous independent innovation capabilities, continuously deepens its involvement in the new energy vehicle, consumer electronics, industrial motors, and other three major downstream business areas, while actively exploring high-growth new markets such as intelligent Siasun Robot & Automation and low-altitude aircraft. According to Illumination Consultancy, the company is one of the few in China that has mastered the complete preparation technology for neodymium iron boron permanent magnets. As of the latest feasible date, it has an annual production capacity of 26,000 tons of neodymium iron boron permanent magnet blank materials, making it one of the world's largest rare earth permanent magnet manufacturers. Reviewing the core financial data disclosed in the prospectus from 2023 to 2025, Ningbo Yunsheng achieved a brilliant turnaround from "squatting" to "jumping", mainly benefiting from the highlighted profit elasticity, continuous optimization of product structure, and a qualitative leap in operational quality. From 2023 to 2025, the company achieved revenues of RMB 5.326 billion, RMB 4.998 billion, and RMB 5.417 billion respectively. While the revenue side remained stable, the profit side staged a brilliant V-shaped turnaround: the net profit attributable to the parent company went from a loss of RMB 226 million in 2023, to a profit of RMB 97 million in 2024, and then to a profit of RMB 336 million in 2025, a year-on-year increase of 247%. What is more noteworthy is the trajectory of the gross profit margin - from 4.6% in 2023 to 11.2% in 2024, and further to 16.4% in 2025, a significant increase year by year. Among these, a key numerical comparison reveals the essence of the reversal: while revenue in 2025 increased by only about RMB 90 million compared to 2023, gross profit during the same period soared from RMB 247 million to RMB 886 million. The elasticity of the gross profit margin far exceeds that of income elasticity, which is a typical feature of a bottom reversal. Looking at the income structure, the qualitative leap in operating quality of Ningbo Yunsheng is likely related to the optimization of the company's business structure. Sintered neodymium iron boron permanent magnets are the company's absolute mainstay, with revenues accounting for 74.2% in 2025. However, the performance of the magnetic component business is more significant, with sales income of RMB 705 million in 2025, representing a year-on-year increase of 59.69%. From selling magnetic materials to selling magnetic components, this is a clear trajectory of the value chain moving upwards. In terms of different domains, new energy vehicles still represent the first growth curve, achieving revenues of approximately RMB 2.547 billion in 2025, accounting for 47% of the revenue. Consumer electronics generated around RMB 1.304 billion in revenue and industrial and other sectors around RMB 971 million. What is more exciting is the layout in emerging fields - the company has entered the field of intelligent Siasun Robot & Automation and low-altitude aircraft, and has begun supplying in small batches or in mass production to top customers. From selling magnetic materials to selling magnetic components, from supporting automobiles to embracing Siasun Robot & Automation, Ningbo Yunsheng's 'value curve' is being redrawn. However, behind the rosy picture of the profit and loss statement, the cash flow statement presents a different story. From 2023 to 2025, the company's net operating cash flow was RMB 1.087 billion, RMB 855 million, and RMB 349 million respectively, decreasing year by year, with a sharp drop of nearly 60% in 2025 compared to the previous year. The core issue lies in the simultaneous increase in accounts receivable and inventory. In 2025, trade receivables and notes increased by about RMB 440 million to RMB 2.767 billion, and inventory increased by about RMB 539 million to RMB 1.940 billion, resulting in a decrease in cash and cash equivalents of RMB 112 million to RMB 929 million, significantly intensifying liquidity pressure. From the performance squat in 2023 to the strong jump in 2025, Ningbo Yunsheng has proven its operational resilience in the face of cyclical fluctuations with a V-shaped turnaround performance. At the same time, the rise of high value-added businesses such as magnetic components and the early positioning in emerging fields such as Siasun Robot & Automation and low-altitude economy also clearly outline the growth path of the company from "cyclical growth" to "sustainable growth". However, the gap between the profit and loss statement and the cash flow statement clearly reminds the market that the "growth worries" during the scale expansion period also need time to digest, which is a threshold that the company must overcome to reach higher stages. Continued high industry prosperity, short-term disturbances do not change long-term value Looking at the global neodymium iron boron track where Ningbo Yunsheng is located, it is easy to see that the company is on the extension line of the "upward trend" in the industry, with significant industry prosperity. According to Illumination Consultancy, global sales of neodymium iron boron permanent magnets reached 251.6 thousand tons in 2025 and are expected to reach 400.3 thousand tons by 2030, with a compound annual growth rate of 9.7%. Chinese companies accounted for 91.1% of global sales in 2025, establishing an unshakable leading position. In terms of downstream applications, the new energy vehicle sector was the largest source of demand in the global market in 2025, accounting for 29.4%, while the industrial motor and consumer electronics sectors accounted for 12.1% and 4.1% respectively. If new energy vehicles represent the "first curve" of rare earth permanent magnets, then intelligent Siasun Robot & Automation and the low-altitude economy are the "second curves" that are accelerating. Illumination Consultancy predicts that from 2025 to 2030, global sales of neodymium iron boron permanent magnets for applications in intelligent Siasun Robot & Automation and low-altitude aircraft will achieve compound annual growth rates of 128.3% and 49.8%, respectively. These two tracks will become the fastest-growing application areas for neodymium iron boron permanent magnets. It is noteworthy that Ningbo Yunsheng has already made moves in these two directions. In the field of human-shaped Siasun Robot & Automation, the company has established contact with a group of potential customers, with some customers already in the sample stage, and has reached mass production supply status for a leading domestic customer. In the low-altitude economy sector, the company has taken the lead in layout, expanding into applications such as unmanned low-altitude delivery, unmanned aircraft, and low-altitude transport manned aircraft. At the same time, Ningbo Yunsheng has also accumulated a strong dominance in niche areas - according to the prospectus, the company ranks first globally in sales of VCM neodymium iron boron permanent magnets for HDD, with a market share of 37.8%; in the main drive motor neodymium iron boron permanent magnet sales for new energy vehicles, the company ranks second globally, with a market share of 12.0%. However, any disruptive opportunity inevitably comes with cyclical turbulence. For Ningbo Yunsheng, the short-term profit concerns and the "long slope thick snow" of emerging tracks are two sides of the same coin. But short-term disturbances will not overturn the company's long-term upward development trend. As emerging tracks gradually complete R&D validation and enter the mass production realization phase, coupled with the continuous consolidation of the company's market share in its core business, the company is expected to gradually smooth out the cyclical fluctuation risks. In conclusion Taking into account the short, medium, and long-term dimensions to review the company's growth logic, the value evolution path of Ningbo Yunsheng has become clear and traceable. In the short term, the company has successfully completed the repair at the bottom of the cycle, the trend of a V-shaped reversal in performance is established, net profit attributable to the parent company has achieved a significant turnaround with substantial growth, and the inflection point has been verified with the underlying fundamentals; in the medium term, the foundation of the main business in the new energy vehicle sector is solid, Siasun Robot & Automation, and the low-altitude economy are transitioning from concepts to contributions, with the growth trajectory expected to rise; in the long term, the "A+H" dual platform will expand the international capital channel and provide stronger support for the company's global strategy. Of course, investment is not simply about looking at "what is happening now", but also about looking at "what it is becoming". Improvement in operating cash flow, increase in accounts receivable turnover rate, breakthrough in overseas markets, changes in the proportion of revenue from emerging tracks - these are the key indicators to determine whether Ningbo Yunsheng can transition from a cyclical reversal to sustainable growth.