Magnetic Materials Industry Economic Research Report: PCO New Materials Ranks First with a 41.90% Gross Margin in Magnetic Materials

According to the Magnetic Materials Industry Economic Research Report published by YHResearch, the report provides an overview of the magnetic materials market, including its definition, classification, applications, and industry chain structure. It also discusses development policies and plans, manufacturing processes, and cost structures, while analyzing the current development status and future market trends of the magnetic materials market. In addition, the report analyzes the major production regions, consumption regions, and leading manufacturers in the magnetic materials market from both production and consumption perspectives.

1. Overview

Magnetic materials are functional materials capable of interacting with magnetic fields and becoming magnetized under the action of an external magnetic field. Based on their magnetic properties, they can be classified into soft magnetic materials, permanent magnetic materials, and specialized magnetic materials such as gyromagnetic and magnetic recording materials. They are widely used in power, electronics, new energy, and information storage applications.

China's magnetic materials market is characterized by globally leading production capacity, differentiated competitive landscapes across market segments, and increasingly pronounced tiered competition. Industry concentration continues to rise, resulting in a competitive structure led by major players alongside a large number of small and medium-sized manufacturers. In the rare-earth permanent magnet segment, Chinese companies account for the vast majority of global production capacity. First-tier companies such as Zhongke Sanhuan, Ningbo Yunsheng, JL MAG Rare-Earth, and Zhenghai Magnetic Material focus on high-value-added markets such as new energy vehicles and wind power, while competing with overseas companies for the high-end automotive-grade market.

Hengdian DMEGC and Long Magnetics have established scale advantages in ferrite magnetic materials. In the soft magnetic materials segment, Hengdian DMEGC, TDG Holding, and PCO New Materials are among the leading companies, while high-end high-frequency soft magnetic materials, amorphous materials, and nanocrystalline materials continue to face competition from overseas giants such as TDK. The low- and mid-end market is characterized by a large number of companies, intense product homogenization, and considerable pricing pressure. High-end products face barriers related to manufacturing processes, customer certification, and patents, while domestic substitution continues to advance. The industry is evolving toward higher performance, reduced rare-earth usage, and integrated components, with leading companies possessing technological capabilities, customer resources, and full-industry-chain advantages further strengthening their competitive positions.

Major listed companies in China's magnetic materials industry currently include JL MAG Rare-Earth, Zhenghai Magnetic Material, Zhongke Sanhuan, Ningbo Yunsheng, Hengdian DMEGC, Tianhe Magnetics, Innuovo, PCO New Materials, Earth-Panda, Long Magnetics, Galaxy Magnets, Zhongke Magnetics, BGRIMM Technology, Sinosteel New Materials, and TDG Holding.

In terms of listing segments, these 15 companies are widely distributed across the Shanghai and Shenzhen stock exchanges. The ChiNext market includes several growth-oriented technology companies such as JL MAG Rare-Earth, Zhenghai Magnetic Material, PCO New Materials, and Earth-Panda, while the STAR Market includes new-materials companies such as Earth-Panda. The Main Board is home to established industry leaders such as Zhongke Sanhuan, Ningbo Yunsheng, and Hengdian DMEGC. This differentiated distribution reflects differences in corporate development stages and financing requirements.

From a historical perspective, most of these companies were established around 2000 and completed their IPOs around 2010. However, a new wave of capitalization has emerged over the past five years. Tianhe Magnetics was listed on the Shanghai Main Board in 2025, while Zhongke Magnetics was listed on the ChiNext market in 2023, demonstrating that new participants continue to enter the public market.

2. Comparison of Business Strategies of Listed Magnetic Materials Companies

In terms of business positioning, the 15 major listed companies in China's magnetic materials industry exhibit a differentiated competitive structure characterized by "rare-earth permanent magnets as the dominant segment, diversified coexistence of ferrite and soft magnetic materials, and a combination of vertical industry-chain integration and horizontal business expansion."

Nine companies, including JL MAG Rare-Earth, Zhenghai Magnetic Material, Zhongke Sanhuan, Ningbo Yunsheng, Tianhe Magnetics, Innuovo, Earth-Panda, Galaxy Magnets, and Zhongke Magnetics, focus primarily on sintered NdFeB magnets or bonded NdFeB magnets, forming the largest group of companies in the industry.

Hengdian DMEGC and Long Magnetics focus on wet-pressed permanent ferrite magnets. Hengdian DMEGC has expanded its business beyond magnetic materials into photovoltaic and lithium-ion battery businesses, creating a dual-growth model of "magnetic materials + new energy." Long Magnetics has completed vertical integration from ferrite pre-sintered materials to magnetic powder cores and chip inductors, while expanding its overseas presence in Vietnam and Thailand.

PCO New Materials is a specialized benchmark company in the metal soft magnetic materials segment. It has developed three growth curves centered on metal soft magnetic powder cores and is advancing overseas production capacity development. TDG Holding focuses on soft ferrite materials and has established synergies among sapphire, piezoelectric crystal materials, and equipment manufacturing, forming an integrated "materials + equipment" business model.

Sinosteel New Materials has developed a diversified magnetic materials portfolio covering manganese tetroxide, permanent ferrite components, soft magnetic components, and metal magnetic powder cores, supplemented by testing and inspection services, thereby establishing an integrated new materials business matrix.

3. Comparison of Production and Sales Models

The 15 major listed companies in China's magnetic materials industry generally adopt a "make-to-order production + direct sales" model, while developing differentiated approaches in terms of customer structure, domestic and overseas sales, channel management, and supply-chain expansion.

First, direct sales are overwhelmingly dominant, with distributors serving primarily as a supplementary channel. For most companies, the direct sales ratio exceeds 90% and in some cases reaches 100%. JL MAG Rare-Earth, Zhenghai Magnetic Material, Tianhe Magnetics, Galaxy Magnets, and Sinosteel New Materials all have direct sales ratios of 100%. PCO New Materials has a direct sales ratio of 97.40%, Long Magnetics 97.97%, Earth-Panda 90.67%, and BGRIMM Technology more than 99.9%.

Only a small number of companies adopt distributor or consignment models for certain product categories or customers. Ningbo Yunsheng, for example, generated RMB 211 million in distributor sales, while consignment sales accounted for 42.96% of Zhongke Magnetics' business. This highly consistent channel structure is closely related to the highly customized and multi-specification nature of magnetic materials products, as well as their technology-driven sales characteristics, which require close R&D collaboration with downstream customers.

Second, customer concentration is generally high, with major-customer strategies playing a central role. The proportion of sales attributable to the top five customers was 45.08% for JL MAG Rare-Earth, 36.05% for Zhenghai Magnetic Material, and 43.67% for PCO New Materials. The industry as a whole therefore demonstrates relatively high dependence on major customers.

Companies generally implement key-account segmentation and resource allocation strategies. Zhenghai Magnetic Material, for example, has implemented "customer segmentation and resource concentration"; Zhongke Magnetics follows a "major customer strategy, prioritizing leading customers"; and Sinosteel New Materials implements both a "major customer strategy and brand strategy." Long Magnetics has disclosed that its customer certification cycle can extend to three to five years, highlighting the high barriers to entering mainstream supply chains and the strong customer retention characteristics of the industry.

Third, domestic and overseas sales structures differ significantly, with substantial differences in export capabilities. Tianhe Magnetics recorded RMB 1.313 billion in domestic sales and RMB 1.032 billion in overseas sales, while its overseas gross margin of 23.14% was significantly higher than its domestic gross margin of 7.00%, highlighting the premium available in overseas high-end markets.

Hengdian DMEGC generated 50.17% of its revenue from overseas markets, resulting in a relatively balanced domestic and international sales structure. Zhongke Sanhuan is a typical export-oriented company with a relatively high export ratio. Innuovo derives approximately 40% of its revenue from overseas markets, while Galaxy Magnets generates 74.57% of sales domestically and 25.43% overseas. BGRIMM Magnetics serves high-end markets across Japan, South Korea, Europe, and North America.

Some companies have already established global sales networks. Long Magnetics operates sales centers in Frankfurt, Osaka, and San Luis Potosi. JL MAG Rare-Earth uses a Hong Kong platform for overseas trade, while Ningbo Yunsheng continues to expand its overseas sales team.

4. Comparison of Revenue and Magnetic Materials Businesses

In terms of total revenue, Hengdian DMEGC leads by a wide margin with total revenue of RMB 22.586 billion. However, magnetic materials account for only 17.73% of its total revenue, making it a diversified industrial group primarily driven by its photovoltaic business.

The second tier consists of JL MAG Rare-Earth (RMB 7.718 billion), Zhenghai Magnetic Material (RMB 7.031 billion), and Zhongke Sanhuan (RMB 6.641 billion). These companies are specialized leaders with a high concentration in rare-earth permanent magnets. Their combined magnetic materials revenue exceeds RMB 20 billion, making them core participants in the industry.

The third tier includes Ningbo Yunsheng (RMB 5.464 billion), Innuovo (RMB 3.884 billion), TDG Holding (RMB 3.201 billion), and Sinosteel New Materials (RMB 3.130 billion), with revenue ranging from RMB 3 billion to RMB 5.5 billion. Their business structures range from diversified portfolios to highly focused operations.

Companies such as Tianhe Magnetics (RMB 2.345 billion), PCO New Materials (RMB 1.802 billion), Earth-Panda (RMB 1.645 billion), Long Magnetics (RMB 1.289 billion), BGRIMM Technology (RMB 1.307 billion), Galaxy Magnets (RMB 858 million), and Zhongke Magnetics (RMB 741 million) fall into the small- and medium-sized group with revenues between RMB 1 billion and RMB 2.5 billion. Most are specialized players focused on specific market segments.

In terms of the proportion of magnetic materials revenue in total revenue, Galaxy Magnets has a 100% share, making it the most pure-play magnetic materials company among the group. Zhenghai Magnetic Material (99.94%), PCO New Materials (96.52%), and Zhongke Sanhuan (96.03%) also maintain a high degree of focus on magnetic materials.

JL MAG Rare-Earth (91.07%), TDG Holding (88.01%), and Ningbo Yunsheng (88.44%) also derive approximately 90% of their revenue from magnetic materials.

By comparison, Hengdian DMEGC (17.73%), BGRIMM Technology (23.20%), and Sinosteel New Materials, where industrial raw materials and electronic components together account for approximately 58.5%, are diversified groups with magnetic materials representing only one of several business segments. In particular, although magnetic materials remain a traditional strength of Hengdian DMEGC, their relative contribution has declined due to the company's substantial photovoltaic revenue.

In terms of gross margin for magnetic materials, PCO New Materials ranks first at 41.90%, highlighting the technology premium of metal soft magnetic powder cores in high-end applications such as photovoltaic inverters and chip inductors.

Galaxy Magnets follows at 35.16%, while Long Magnetics records 32.01%. Their differentiated strategies in bonded NdFeB magnets and permanent ferrite materials allow them to achieve relatively high profitability. Hengdian DMEGC's magnetic materials business has a gross margin of 28.14%, demonstrating its cost and quality control capabilities in ferrite materials.

By contrast, traditional sintered NdFeB manufacturers generally record gross margins in the 11%-20% range: Zhenghai Magnetic Material at 13.01%, Zhongke Sanhuan at 11.20%, Innuovo at 16.32%, Earth-Panda at 19.40%, Tianhe Magnetics at 16.01%, and Ningbo Yunsheng at 18.35%.

Zhongke Magnetics' NdFeB business has a gross margin of only 8.26%, the lowest among its peers. However, its permanent ferrite magnet business achieves a gross margin of 24.10%, providing a complementary profit structure.

This clear gross-margin gradient demonstrates that magnetic materials are highly differentiated across product categories. Bonded NdFeB magnets, metal soft magnetic powder cores, and high-end ferrite materials can command significantly higher profitability than conventional sintered NdFeB processing due to their technological barriers and segment-specific pricing premiums.

5. Comparison of Production Capacity, Output, and Sales Volume

In terms of production capacity, output, and sales volume, the 15 major listed companies in China's magnetic materials industry show substantial differences in production scale, divergent growth rates in output and sales, and generally increasing inventory pressure. The industry is currently at a cyclical stage characterized by simultaneous expansion and adjustment.

First, production capacity demonstrates a fundamental gap between "ferrite at the hundreds-of-thousands-of-tons level" and "rare-earth permanent magnets at the thousands-to-tens-of-thousands-of-tons level."

Hengdian DMEGC has approximately 300,000 tons of magnetic materials production capacity, with output of 221,700 tons and sales of 218,300 tons, making it the clear leader in scale. This reflects the large-scale and mass-production characteristics of the ferrite materials business.

Long Magnetics has 60,000 tons of wet-pressed ferrite magnet capacity and produced 45,000 tons. Zhongke Magnetics has 20,000 tons of permanent ferrite magnet capacity and produced 23,100 tons, implying a capacity utilization rate exceeding 115%. These figures further demonstrate the mass-production characteristics of ferrite materials.

By comparison, rare-earth permanent magnet companies generally have production capacity ranging from several thousand tons to tens of thousands of tons. JL MAG Rare-Earth has 40,000 tons, Zhenghai Magnetic Material 30,000 tons, Ningbo Yunsheng 26,000 tons, Tianhe Magnetics 9,300 tons, and Zhongke Magnetics 2,000 tons of NdFeB magnetic steel capacity.

The difference in scale is fundamentally attributable to the high-value-added and customized characteristics of NdFeB magnets versus the large-scale and standardized nature of ferrite materials.

Second, output and sales growth rates vary significantly. Ferrite and certain rare-earth permanent magnet companies have experienced divergent market conditions.

In terms of year-on-year output growth, Zhongke Magnetics' permanent ferrite magnets led the industry with a 54.59% increase. Rare-earth permanent magnet companies including Zhongke Sanhuan (+26.41%), Earth-Panda (+24.80%), JL MAG Rare-Earth (+18.22%), and Zhenghai Magnetic Material (+16.67%) also maintained double-digit growth, indicating that leading companies continue to expand production capacity in response to demand from new energy vehicles and industrial motors.

However, Tianhe Magnetics' output declined by 11.26% year on year and sales fell by 10.63%. Hengdian DMEGC's magnetic materials output declined by 2.49%, while sales fell by 5.91%. Innuovo's NdFeB output increased by only 4.40%, while sales rose marginally by 0.91%. These figures indicate that some companies faced shipment pressure in 2025 due to weaker demand and intensified competition.

6. Comparison of R&D Investment

In terms of R&D investment, the 15 major listed companies in China's magnetic materials industry generally show a positive correlation between absolute R&D spending and revenue scale. However, R&D intensity, measured as R&D expenditure as a percentage of revenue, shows an inverse pattern in which small and medium-sized specialized companies tend to lead while large diversified groups rank lower.

This reflects significant differences in strategic priorities and resource allocation toward technological innovation across the industry.

First, absolute R&D expenditure is closely correlated with revenue scale. Hengdian DMEGC ranked first with R&D expenditure of RMB 736 million, consistent with its total revenue of RMB 22.586 billion.

JL MAG Rare-Earth (RMB 506 million), Zhenghai Magnetic Material (RMB 402 million), Ningbo Yunsheng (RMB 276 million), TDG Holding (RMB 227 million), Innuovo (RMB 170 million), PCO New Materials (RMB 152 million), Sinosteel New Materials (RMB 147 million), and Zhongke Sanhuan (RMB 145 million) invested between RMB 145 million and RMB 506 million in R&D, broadly corresponding to their respective revenue scales.

Companies with smaller revenues, such as Galaxy Magnets (RMB 50 million) and Zhongke Magnetics (RMB 26 million), also have relatively limited absolute R&D expenditure, indicating that R&D resource allocation remains constrained by overall profitability and cash-flow conditions.

Second, R&D intensity demonstrates a clear "specialization premium." PCO New Materials ranks first with an R&D intensity of 8.41%. As a specialized leader in metal soft magnetic powder cores, sustained high R&D investment represents a core competitive barrier supporting its technological leadership across its first- to fifth-generation iron-silicon technology platforms.

Earth-Panda (7.66%), TDG Holding (7.10%), JL MAG Rare-Earth (6.55%), Galaxy Magnets (5.84%), Zhenghai Magnetic Material (5.71%), BGRIMM Technology (5.59%), Long Magnetics (5.06%), and Ningbo Yunsheng (5.05%) have R&D intensities ranging from 5% to 8%, reflecting the industry's broad emphasis on technology-driven development.

Tianhe Magnetics (4.79%), Sinosteel New Materials (4.68%), and Innuovo (4.38%) fall within the 4%-5% range, representing a medium level of R&D intensity. Zhongke Magnetics (3.50%), Hengdian DMEGC (3.26%), and Zhongke Sanhuan (2.18%) rank relatively low.

7. Business Development Plans of Listed Magnetic Materials Companies

In terms of business development strategies, the strategic direction of the 15 major listed companies in China's magnetic materials industry can be summarized as a combination of "maintaining core businesses and pursuing moderate diversification, driving growth through both capacity expansion and technological upgrading, and simultaneously advancing global expansion and positioning in emerging application markets."

Each company is developing a differentiated growth path based on its resources and competitive position.

JL MAG Rare-Earth has established the vision of becoming "a global leader in the rare-earth permanent magnet industry." Under its "full-category magnetic materials solutions" strategy, the company is transitioning from a single-product supplier toward a comprehensive solutions provider. Its 2026 operating strategy explicitly calls for "the timely construction of 20,000 tons of new production capacity" and "active expansion into motor rotors for embodied robotics," combining capacity expansion with early positioning in emerging applications.

Zhenghai Magnetic Material follows a cost leadership strategy. On the technology side, it focuses on "staying one step ahead" and "balancing rare-earth resources," while using AI to accelerate the iteration of core technologies.

Zhongke Sanhuan adheres to a strategy of "seeking progress while maintaining stability." It is developing high-performance products for strategic emerging sectors such as new energy vehicles, robotics, and the low-altitude economy, while establishing an integrated innovation system covering fundamental mechanism research through product commercialization.

Ningbo Yunsheng is using the phased commissioning of its 15,000-ton Baotou project as a key growth driver. A 5,000-ton capacity has already entered production, while the remaining capacity is scheduled to be commissioned in June 2026. At the same time, the company is strengthening its overseas sales team and increasing R&D investment.

As a newly listed company, Tianhe Magnetics is leveraging the geographic advantages of Baotou's rare-earth resources. Its production capacity is expected to increase from 9,300 tons to 12,300 tons, with a long-term target of 20,000 tons. The company is also placing considerable emphasis on its overseas sales structure, which generates higher gross margins.

Earth-Panda focuses on the two major sectors of industrial motors and the automotive industry, which together account for 77.83% of its core business revenue. The company is pursuing scale expansion and cost control, while its R&D expenditure increased significantly by 65.23% year on year due to its participation in national projects.

PCO New Materials is firmly advancing its "Wutong Tree" business strategy. Building on its strengths in metal soft magnetic powder cores, it is expanding applications of integrated molded inductors in AI server GPU power supplies, AI smartphones and PCs, and intelligent driving.

The company is also developing axial-flux motor cores for drones and robots, as well as magnetic fluid sealing technology for the semiconductor sector. At the same time, it is advancing overseas production line construction in Thailand and Hong Kong. Its high R&D intensity of 8.41% is intended to maintain technological leadership across successive generations.

Long Magnetics aims to surpass Japan's TDK in wet-pressed permanent ferrite magnets. While expanding production capacity to 60,000 tons, the company seeks to bring its technology close to or reach TDK's level. It is also actively developing a complete soft magnetic materials industry chain, with the goal of becoming a globally leading manufacturer of magnetic materials and components.

Hengdian DMEGC continues to coordinate its four major business segments: magnetic materials, photovoltaics, lithium-ion batteries, and components. Its magnetic materials business leverages a production scale of 300,000 tons to consolidate its traditional advantages. Global expansion, reflected in an overseas revenue ratio of 50.17% and year-on-year growth of 40.20%, has become a major source of incremental growth.

Innuovo continues to operate three major business segments in parallel: NdFeB magnets, motor products, and electric wheelchairs. Its core competitive advantage lies in the vertical integration between magnetic materials and its internally manufactured micro and special-purpose motors. The company is advancing a 5,000-ton annual production capacity expansion project for sintered NdFeB magnets, with approximately 60% of the project completed.

TDG Holding positions itself as a "leader in the electronic materials industry." It is firmly reducing its photovoltaic equipment business and accelerating the disposal of underperforming assets, while shifting its equipment business toward semiconductor and specialty crystal processing.

Its magnetic materials business targets high-end markets such as new energy vehicles, photovoltaics and energy storage, and artificial intelligence. The company is developing high-frequency, low-loss, high-saturation soft magnetic materials, as well as advanced metal soft magnetic, nanocrystalline, and amorphous materials.

Zhongke Magnetics is implementing a strategic framework built around "one center, two fundamentals, three strategies, and four capabilities." Following completion of its 20,000-ton annual production project for energy-efficient motor magnets and its 2,000-ton high-performance NdFeB magnetic steel project, the company plans further capacity expansion.

Upstream, it is building a vertically integrated supply chain based on self-produced ferrite pre-sintered materials. Downstream, it is developing an integrated, system-level portfolio of high-value-added products.

Sinosteel New Materials launched its "1234" operating plan for 2026. It is advancing a 1,000-ton NdFeB investment project and a 12,000-ton expansion project for battery-grade manganese tetroxide. The company is also promoting integrated coordination between its magnetic materials and elastomer materials businesses and restructuring its R&D system.

BGRIMM Technology is developing three core business lines: ferrite permanent magnet powder materials, permanent magnet products, and high-performance rare-earth permanent magnet materials. It is expanding upstream and downstream along the industry chain as well as into rare-earth functional materials, while promoting applications in mobile connectivity, high-end equipment, new energy, energy conservation and environmental protection, artificial intelligence, and robotics.

Galaxy Magnets is focusing on the construction of its subsidiary's Phase II plant and a self-consumption solar photovoltaic power generation project. Infrastructure improvements and green-energy supporting facilities are expected to provide a foundation for the company's subsequent development.