Highlights

• China's JL Mag dominates rare-earth permanent magnet manufacturing.
• Record production of 29,300 tonnes of magnet blanks in 2024.
• Plans to expand production to 60,000 tonnes by 2027.
• Supplies top global customers like Tesla, BYD, and Toyota.
• Strategic advantages in scale, vertical integration, and technological performance.
• Demonstrates leadership in ESG with:
  • 30% recycled rare-earth inputs.
  • Carbon-neutral product certifications in the critical minerals supply chain.

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JL Mag Rare-Earth is a top-tier manufacturer of neodymium-iron-boron (NdFeB) permanent magnets—the muscle inside EV traction motors, direct-drive wind turbines, industrial drives, and high-efficiency compressors. Founded in 2008 and headquartered in Ganzhou, Jiangxi, the company is dual-listed (Shenzhen: 300748; HKEX: 6680) and sits squarely inside the world’s dominant rare-earth ecosystem: China produces an estimated 85–90% of global NdFeB magnets. JL Mag leverages that home-court advantage with its own R&D, processing depth, and global customer reach.

The company is listed as the number one magnet manufacturer in the Rare Earth Exchanges (REEx) Magnet Manufacturers global ranking.

Scale That Dwarfs the West

• Record output: In 2024, JL Mag produced 29,300 tonnes of magnet blanks (+39% YoY), roughly 20,900 tonnes of finished magnets (+~38% YoY).
• Capacity runway: Management is pushing capacity to 40,000 tpa by the end of 2025 and ~60,000 tpa by 2027.
• Share leader: By volume, JL Mag is widely regarded as the #1 producer of high-performance rare-earth magnets globally**,** some industry estimates place its share in the mid-teens —in a fragmented market otherwise dominated by Chinese incumbents.

The “Vast Differences”

Even the largest non-Chinese players operate at a fraction of JL Mag’s scale. A single JL Mag expansion tranche (20,000 tpa) approaches or exceeds the entire annual output of leading Western/Japanese magnet makers—illustrating the gulf in capacity, vertical integration, and domestic demand support.

Recent Moves: Building Where the Ore Is

• Baotou Phase III: A RMB 1.05B (~USD 146M) project adding 20,000 tpa in Inner Mongolia—anchored near China’s largest light rare-earth hub. This lifts the Baotou base to 40,000 tpa and cements JL Mag’s production lead.
• Green intelligent manufacturing: A separate 20,000 tpa project targets ~2027 completion, taking total capacity toward 60,000 tpa.
• Upstream security: Long-term supply ties with China Northern Rare Earth (light REEs) and China Rare Earth Group (heavy REEs) stabilize feedstock under China’s quota regime. A ~9.8% stake in Australia’s Hastings Technology Metals adds optionality outside China.

Customers: Blue-Chip Demand

JL Mag supplies magnets to top EV makers (e.g., Tesla, BYD, Toyota), 8 of the top 10 vehicle A/C compressor manufacturers, and 5 of the top 10 wind turbine OEMs. That spread diversifies revenue across EV drivetrains, HVAC, and wind power—and increasingly into robotics and UAVs, where JL Mag is piloting magnet assemblies for humanoid-robot joint motors and rotor components.

Technology Edge: High Performance, Less Heavy REE

A key technical lever is reducing dysprosium/terbium (scarce, costly heavy rare earths) while maintaining high-temperature performance. JL Mag’s low-HRE alloy and process work matters as EVs scale and OEMs target cost, efficiency, and supply resilience.

The Competitive Gulf: Why China’s Magnet Makers Win

Factors	Summary
Scale & speed	Chinese firms—JL Mag foremost—operate at order-of-magnitude larger capacities, enabling big-lot delivery schedules global OEMs require.
Vertical integration	Close coupling to China’s mining/separation giants yields supply security and cost stability. Western/Japanese peers often import Chinese oxides/metals at market prices.
Demand gravity	The world’s largest EV and wind markets are in China; local scale plus policy support compounds learning curves and capex efficiency.
IP parity	With core patents expired, Chinese producers have closed the quality gap. Automaker sourcing (including Japanese brands) confirms parity for most applications.

Bottom line: even with new Western projects, announced outputs typically sit in the hundreds to low-thousands of tonnes—years from challenging China’s entrenched scale.

Geopolitics: License to Ship, License to Lead

In 2025, China imposed export-license requirements on certain rare-earth magnet categories (notably HRE-dependent). Customs pauses jolted global OEMs reliant on Chinese magnets. JL Mag secured an export license by mid-year, becoming an early conduit for resumed overseas shipments.

Investor read:

• China’s licensing underscores policy risk, but also signals that leading, compliant exporters like JL Mag can be favored channels in tight regimes.
• The episode accelerated Western efforts to localize magnets—but multi-year buildouts won’t erase dependence soon. Near-term, JL Mag’s strategic importance is likely to increase, not decrease.

ESG: Cleaner Magnets, Not Greenwash

• Recycling at scale: In 2024, ~30% of JL Mag’s rare-earth inputs (2,575 t) came from recycled sources (scrap and end-of-life magnets)—well ahead of most peers.
• Carbon steps: First in the magnet industry to obtain PAS 2060 carbon-neutral certification for select products (SGS). Rooftop solar and efficiency upgrades lower process intensity.
• Compliance: ISO 14001 environmental management in place. Supply-chain traceability—especially HREs from Myanmar—remains an area for ongoing scrutiny across the industry.

Financials & Sentiment: Volume Up, Margins Rebuilding

• 2024 snapshot: Revenue RMB 6.76B (USD 930M, +1% YoY) on surging volume but lower selling prices (raw material deflation). Net profit RMB ~291M, down ~48% as price compression and inventory effects bit.
• Q1-2025 turn: As prices stabilized and utilization rose, net profit +~58% YoY with revenue up ~14% YoY—evidence that scale plus cost discipline can restore margins.
• 2025 guide & views: Management guides RMB 8–9B revenue; some analysts peg RMB 8.8B (+30% YoY). Consensus sentiment leans bullish given capacity adds, export license clarity, and strong EV/wind pipelines.
• Volatility check: Shares have moved sharply on headline risk (e.g., Tesla’s “rare-earth-free motor” research; export controls). Yet the broader market signal remains: PM motors with NdFeB are still the efficiency king, and major OEMs continue to increase magnetized motor adoption.

What Could Go Wrong (and Right)

Risks: Raw-material swings (NdPr/HRE), policy shocks (tariffs/controls), and long-term substitution attempts (ferrites, synchronous reluctance) could weigh on margins or growth.

Offsets: JL Mag’s scale, upstream ties, HRE-lean alloys, recycling, and multi-market customer mix are built to buffer volatility. Capacity to ~60,000 tpa lines up with a potential global magnet shortfall this decade if EV/wind growth tracks expectations.

Investor Takeaways (Retail-Friendly)

1. China’s magnitude wins the near term. JL Mag’s capacity and integration are in a different league—one expansion phase can rival a Western peer’s entire annual output.
2. Customers validate quality. Supplying top EV, wind, and HVAC names confirms performance and delivery reliability.
3. Policy cuts both ways. Licensing risk is real—but JL Mag’s quick approval highlights its role as a strategic shipper in a controlled system.
4. ESG is improving. 30% recycled feedstock and early carbon-neutral certifications matter to global OEMs.
5. Growth with bumps. Expect quarter-to-quarter swings, but the secular EV/renewables tide—and JL Mag’s capacity path—point up and to the right.

Bottom Line: JL Mag is not just another factory—it’s the keystone of a magnet empire powering the electrified economy. China’s scale advantage is overwhelming, and JL Mag sits at the apex: bigger plants, deeper integration, tighter customer ties. For investors seeking exposure to the EV and wind buildout, JL Mag offers a front-row seat to the magnetization of global industry—alongside the candid risks that come with geopolitics and commodities.  Moves by the West, without a comprehensive industrial policy with an Operation Warp Speed style of thrust, REEx forecasts the U.S. and West won’t achieve 50% market share for at least a decade.

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