Ningbo Yunsheng Plans to Increase Capital by 200 Million Yuan to Advance 15,000-Ton High-Performance Rare Earth Permanent Magnet Materials Project

[Financial News] Ningbo Yunsheng Co., Ltd. (Stock Code: 600366) announced on March 18 that the company plans to raise 200 million yuan to increase its capital in its controlling subsidiary, Baotou Yunsheng Rare Earth Magnet Materials Co., Ltd. (“Baotou Magnet”). The funds will be used specifically to increase the capital of its wholly owned subsidiary, Baotou Yunsheng Technology Development Co., Ltd. (“Baotou Technology”), to implement the annual production of 15,000 tons of high-performance rare earth permanent magnet materials intelligent manufacturing project.

The announcement shows that the capital increase will be funded by the company’s 2022 non-public offering of shares. In November 2022, the company completed a non-public issuance of 103 million shares, raising a total of 1.045 billion yuan, with a net amount of 1.033 billion yuan after issuance costs.

Overview of the Capital Increase Plan

The company plans to inject 200 million yuan into Baotou Magnet, which can be paid in one lump sum or in installments, all of which will be used for Baotou Technology’s high-performance rare earth permanent magnet materials intelligent manufacturing project. After the capital increase, Baotou Magnet’s registered capital will change from 1 billion yuan to 1.215 billion yuan, and Baotou Technology’s registered capital will change from 485 million yuan to 685 million yuan, with the company’s shareholding ratio remaining unchanged.

Operational Status of the Target Companies

As a controlling subsidiary, Baotou Magnet achieved operating revenue of 2.628 billion yuan and net profit of 18.6279 million yuan in 2025; as of the end of 2025, total assets were 1.591 billion yuan, owner’s equity was 1.095 billion yuan, and the asset-liability ratio was 31.19%.

In 2025, Baotou Technology, as a wholly owned subsidiary of Baotou Magnet, achieved operating revenue of 275 million yuan, with a net loss of 10.6483 million yuan; as of the end of 2025, total assets were 673.3 million yuan, owner’s equity was 411.1 million yuan, and the asset-liability ratio was 38.88%.

In 2025, operating revenue was 27.484 million yuan, with a net loss of 1.0648 million yuan; in 2024, operating revenue was 0.4 million yuan, with a net loss of 855,650 yuan.

Shareholding Structure Changes

After the capital increase, the shareholding structure of Baotou Magnet remains unchanged, with Ningbo Yunsheng still holding 92.94% of the shares, and Ningbo Yunsheng Magnet Materials Co., Ltd. holding 7.06%. Baotou Technology remains a wholly owned subsidiary of Baotou Magnet.

Project Significance and Risk Reminder

The company states that this capital increase aims to ensure the smooth implementation of the fundraising projects, further enhance the company’s billet production capacity, promote the implementation of the company’s strategic plan, and is in line with the use plan of the raised funds. The company has conducted a prudent feasibility study on the project, but investors should be aware that if market environment, industry policies, technological levels, and other factors differ from expectations, the actual benefits of the project may be lower than anticipated.

This transaction has been approved by the company’s Audit Committee and the 16th meeting of the 11th Board of Directors, and does not require shareholder approval. It does not constitute a related-party transaction or a major asset reorganization.

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