This acquisition shows the company's strategic intention to continue to expand and strengthen the main business of NdFeB rare earth permanent magnet materials. Both Magnet Components and Gaoke Magnetics are 75% of the company's holding subsidiaries. After the acquisition, they will become wholly-owned subsidiaries, which will help enhance the company's profitability. The neodymium iron boron products of Beijing Shengci Technology are important materials for coreless permanent magnet micro-motors. After the acquisition, the company will be able to expand into new downstream areas and enhance synergistic effects. According to the profit commitment of Magnet Components and Shengci Technology, the current acquisition corresponds to a 16-year commitment to net profit PE of approximately 10 times. Gaoke Magnetics reorganized its business due to the relocation of the original production base, and divested the original main production business to magnet components. The valuation is based on PB, which is about 1.13 times. The valuation level is basically reasonable. Shengci Technology is the main highlight of this acquisition, and the company will use its strength to expand the magnetic material market for micro and special motors. Shengci Technology was established in 1993. It owns two companies in Beijing and Qingdao, with a production capacity of 2,000 tons of magnetic materials. Shengci is a well-known enterprise in the subdivision field. It has unique expertise in the fields of ultra-thin-walled product precision processing, high anti-corrosion surface treatment and special-shaped product processing. It is the domestic leader in coreless oscillating motor magnets and flat motor magnets. The company’s main products with high remanence, high coercivity and high temperature resistance are excellent suppliers for variable frequency motors, automotive automation motors, and industrial It is widely used in fields such as dynamic control and machine tool servo motors. After the acquisition, the business of Shengci and Ningbo Yunsheng (600366) will be complementary, and the synergy of products and channels is significant. With Shengci's technology and process accumulation, the company is expected to make greater progress in the field of micro and special motors, especially Gain first-mover advantage in areas with huge market capacity such as automotive micro-motors and industrial robots (300024) servo motors, creating new growth points for the company. The integration of the magnet components and the Gaoke Magnetics business will help increase profitability, but the growth depends on the development of VCM magnets. After Gaoke Magnetics divested its main business from magnetic components, the business scope of the magnetic components company will be expanded from VCM magnetic steel production to automobiles, air conditioners, magnetic resonance and audio motors, etc., and the business can be more concentrated. VCM magnets for magnet components are mainly supplied to two major foreign high-end hard disk manufacturers with strong profitability. However, with the rise of solid-state hard drives, we expect that the demand for VCM magnets will inevitably decrease, so the future growth of magnet components will be inevitable. Look at the expansion in other areas.