BofA Sets HKD24 Target, Forecasting 44% Profit Growth by 2027
Bank of America Securities initiated coverage on JL MAG RARE-EARTH (06680.HK) with a 'Buy' rating, establishing a target price of HKD24 for its H-shares. The bank also assigned a 'Buy' rating to the company's A-shares (300748.SZ) with a RMB36 target. This optimistic outlook is supported by projections for robust earnings expansion, with net profit forecast to grow by 30% in 2026 and 44% in 2027. BofA notes that the H-share target price implies a 2026-2027 price-to-earnings (P/E) ratio of about 27 times. This valuation is considered attractive when compared to humanoid robot and electric vehicle component peers, which trade at P/E multiples of 59 times and 40 times, respectively.
Robots and Heavy Trucks to Drive 9% CAGR in Magnet Demand
BofA's thesis hinges on accelerating demand for high-performance NdFeB magnets from next-generation industries. The bank forecasts a 9% compound annual growth rate (CAGR) for the global high-performance magnet market between 2025 and 2028. Two key sectors are expected to fuel this expansion: new energy heavy trucks and humanoid robots. New energy heavy trucks, which benefit from supportive government policies, use approximately three times the quantity of magnet material as a standard electric car. Simultaneously, the emerging humanoid robot market is projected to reach 1.2 million units in global shipments by 2030, creating a substantial new demand stream for the actuators and motors that rely on these powerful magnets.
Market Share to Hit 25% on Supply Chain and Customer Lock-In
JL MAG RARE-EARTH is positioned to capture an increasing portion of this market growth, with BofA expecting its global share to climb from 19% to 25% by 2028. This competitive strength is built on two strategic pillars. First, the company secures its upstream raw materials through long-term agreements with China's two largest rare earth suppliers, locking in prices at a discount of around 10% to spot rates. Second, the high-performance magnet industry is characterized by significant technical barriers and lengthy customer certification cycles. This creates strong customer loyalty, as clients like leading global EV and robot manufacturers engage in long-term development partnerships, effectively locking in JL Mag as a critical supplier.
