On December 4, 2023, the Chinese company Yinstar (stock code: 301622.SZ) officially listed on the ChiNext board, marking a significant milestone since its establishment in 2011. The company successfully raised a total of 648 million yuan through an initial public offering (IPO) of 28.98297 million shares at an issuance price of 22.36 yuan per shareThe entire raised capital, after deducting issuance expenses, is earmarked for various projects outlined in its prospectusThese include:

- Expansion projects for high-end magnetic materials and components for consumer electronics and new energy vehicles- R&D center construction- Intelligent factory 4.0 platform construction- Supplementing working capital.

An individual investor could potentially earn as much as 63,800 yuan if they acquired shares during the IPO.

In the early trading session, Yinstar skyrocketed to 149.99 yuan per share, reflecting an astonishing increase of 570.8% at one point!

If successful IPO investors sold shares at this peak price, they could enjoy a profit of 63,800 yuan, making it an immensely rewarding investment opportunity.

By the end of the trading day, Yinstar still closed with a remarkable gain of 347.23%, priced at 100 yuan per share, giving it a total market capitalization of 11.6 billion yuan, ranking it 1,367th on the A-share market.

The actual controllers, Zhou Baoping and Fei Weimin, each hold shares in the company amounting to 17,778,239 shares and 13,957,140 shares, representing ownership stakes of 15.34% and 12.04%, respectively.

Based on today's closing price, the personal fortunes of Zhou and Fei have soared to 1.778 billion yuan and 1.396 billion yuan, respectively.

Suppliers of BYD and Foxconn

Yinstar specializes in the R&D, production, and sales of rare earth permanent magnetic material applications, focusing on the technological development of magnetic devices for various end-use scenarios

The company provides comprehensive solutions, including magnetic circuit design, precision machining, surface treatment, and intelligent assembly.

The magnetic devices produced by Yinstar are primarily utilized in consumer electronics, serving as functional components to enable features such as adhesion and signal transmission.

Over the past decade of deepening efforts in the consumer electronics sector, Yinstar has become a major supplier of rare earth permanent magnetic materials for numerous internationally renowned brands such as Apple, Microsoft, Xiaomi, Huawei, Lenovo, reMarkable, and Logitech.

According to its prospectus, the company's major clients include Foxconn, Luxshare Precision, BYD, Xinwei Communication, and Quanta Computer, all of which are contract manufacturers for these notable brands.

From 2021 to the first quarter of 2024, the sales revenue from Apple end-products accounted for 62.29%, 63.35%, 65.95%, and 67.42% of Yinstar's total revenue, respectively.

Notably, Apple's global market share for smartphones has been on an upward trajectory, increasing from 17.4% in 2021 to 18.8% in 2022, reaching 20.1% in 2023.

With the economy stabilizing and rebounding, along with the innovative applications of AI technology driving diverse usage scenarios and facilitating a new replacement cycle, the consumer electronics market has shown clear signs of recovery since 2024. Apple's operations continue to display industry-leading product innovation and sustained profitability, especially with the launch of Apple Intelligence likely to spur a replacement cycle across Apple's hardware product lines.

This presents additional growth potential for Yinstar's performance moving forward.

Magnetic component CAGR reaches as high as 89.28%

Magnetic component application devices represent the company’s largest source of revenue, with income growing from 2.8031 million yuan in 2015 to 462 million yuan in 2023, achieving a staggering compound annual growth rate (CAGR) of 89.28%.

The second-largest source of revenue comes from single magnetic application devices, which also demonstrate robust growth, with income increasing from 15.3822 million yuan in 2014 to 422 million yuan in 2023, marking a CAGR of 44.49%.

From the first to the third quarter of 2024, the revenue from magnetic components grew further by 50.55% to 488 million yuan, contributing 57.49% to total revenue; while single magnetic component revenue increased by 7.38% to 310 million yuan, accounting for 36.47% of revenue.

Notably, the gross profit margin for single magnetic components has reached 33.45%, a new high since 2019; the gross profit margin for magnetic components also increased by 1.69 percentage points year-on-year to 31.73%.

As a direct result of these advancements, Yinstar achieved revenue of 849 million yuan, net profit attributable to shareholders of 138 million yuan, and net profit excluding non-recurring items of 125 million yuan in the first three quarters of 2024, representing year-on-year growth of 28.11%, 29.66%, and 33.63%, respectively.

Another growth layer, expanding into automotive applications

China stands as the primary global supplier of rare earth permanent magnetic materials.

According to a report from Frost & Sullivan, in 2021, China's production of rare earth permanent magnetic materials accounted for 89.9% of the total global production, with high-performance neodymium iron boron magnet production representing 69.1% of the world total

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It is predicted that by 2025, China's rare earth permanent magnet production will reach 284,200 tons, constituting 91.62% of the world's total output; with sintered neodymium iron boron production projected to reach 271,800 tons, comprising 95.64% of the global supply.

Simultaneously, downstream product requirements are becoming more diversifiedBeyond consumer electronics, sectors such as new energy vehicles and energy-efficient household appliances are witnessing surging demands, leading to continuous innovation in features and products.

According to their prospectus, the company plans to deeply explore existing customer product lines while intensifying its expansion into automotive and industrial motor applications.

The funds raised through the high-end magnetic materials and components expansion project for consumer electronics and new energy vehicles is anticipated to produce an additional 50 million single magnetic application devices for consumer electronics, 6 million single magnetic application devices for new energy vehicle motors, and 24 million magnetic component application devices.

A report from Huajin Securities highlights that in 2020, the automotive sector was the second-largest application area for global high-performance neodymium iron boron permanent magnetic materials, accounting for 23.8%, which is three times that of the consumer electronics industry; with the ongoing electrification trend in the automotive sector expected to elevate demand for permanent magnetic materials significantly.