GEM Co., Ltd. (002340)

Equity Research Report　|　Industry: Resource Recycling and New Energy Battery Materials　|　Report Date: September 13, 2026　|　As of the September 11, 2026 close; moving-average, MACD and RSI data as of September 11, 2026 06:50 GMT, shareholder-structure data as of June 30, 2026.

This report was automatically compiled and generated by AI based on publicly available information. It is for reference only and does not constitute investment advice.

1. Executive Summary

GEM reported revenue of RMB 37.124 billion in 2025, up 11.8% year on year, and net profit attributable to shareholders of RMB 1.580 billion, up 54.87%, representing a significant earnings recovery from 2024. However, revenue in the first half of 2026 increased only 2.43% to RMB 17.987 billion, while net profit attributable to shareholders rose 34.68% to RMB 1.076 billion. Non-recurring-item-adjusted net profit attributable to shareholders declined 32.50% year on year to RMB 479 million, and net cash generated from operating activities fell 58.02% year on year to RMB 608 million. This indicates a divergence between reported profit growth and the quality of core operations, which is currently the most decision-relevant fact.

The company’s core competitive strength lies in its closed-loop model of “urban mining + new energy materials manufacturing,” covering the recovery of key metals such as nickel, cobalt, lithium and tungsten, power-battery recycling, ternary precursor and cathode-material manufacturing, and extending toward resources and international markets through its Indonesian nickel-resource projects and overseas customer network. In 2025, revenue from new energy battery materials was RMB 19.962 billion, while revenue from key-metal extraction and recycling was RMB 12.934 billion. Power lithium-battery recycling and dismantling volume reached 52,576 tonnes, up 46% year on year, and high-nickel and high-voltage ternary precursors accounted for more than 90% of shipments.

The growth structure is changing. In the first half of 2026, revenue from key-metal recycling and extraction rose 33.78% year on year to approximately RMB 7.161 billion, while revenue from power-battery recycling increased 8.70% to approximately RMB 942 million. However, core manufacturing revenue from new energy materials declined 13.77% to approximately RMB 8.819 billion. Future earnings sensitivity will depend mainly on the stable operation of the Indonesian nickel projects, volume growth of high-nickel and high-voltage materials, expansion of power-battery recycling, and the pass-through between metal prices and product prices.

As of September 11, 2026, the company’s share price was RMB 6.24, below MA10, MA20, MA50, MA100 and MA200. MACD was negative, while RSI was 26.937 and in the traditional oversold zone. The short-term technical picture was weak, but conditions for a technical rebound existed. The company had repurchased approximately 15.4962 million shares for RMB 105 million, and also proposed to sell its stake in OKE Precision Cutting Tools and provide up to US$56 million in financial assistance to GEN, an associate in Indonesia. These matters may improve asset liquidity, but also introduce uncertainty related to non-recurring gains, related-party transactions and capital exposure.

2. Company Overview

2.1 Basic Information

2.2 Core Businesses and Product Portfolio

• Key-metal extraction and recycling: The company extracts more than 20 key metals, including nickel, cobalt, lithium, tungsten, copper, manganese, germanium, gold, silver and platinum, from waste batteries, nickel- and cobalt-containing industrial waste, tungsten waste, electronic waste, end-of-life vehicles and other resources. It produces high-purity raw materials, metal products and powder materials. Major products include nickel-cobalt intermediate MHP, nickel plates, cobalt tetroxide, cobalt powder, cobalt sheets, ammonium paratungstate (APT), tungsten carbide powder, recycled lithium carbonate, copper, germanium and rare and precious metals. The proportions of China’s primary cobalt, nickel and tungsten mining volumes represented by the company’s disclosed recycled resources have not been independently cross-verified item by item in this research.
• Power lithium-battery recycling: The business covers the collection of retired power batteries, flexible dismantling, recovery of nickel, cobalt, lithium and manganese, recovery of low-value components such as iron phosphate and graphite, cascade utilization, in-situ remanufacturing of battery materials, and the integration of recycled materials into the new energy battery-material system. In 2025, power lithium-battery recycling and dismantling volume was 52,576 tonnes, up 46% year on year. The company stated that this volume exceeded 10% of China’s socially retired power batteries; this proportion follows the company’s disclosed methodology.
• New energy battery-material manufacturing: Main products include ternary precursors, ternary cathode materials, cobalt tetroxide, recycled lithium carbonate, high-nickel, low-cobalt and high-voltage precursors, as well as certain precursors and cathode materials related to sodium-ion and solid-state batteries.
• 2025 revenue structure: New energy battery materials generated revenue of RMB 19.962 billion, accounting for 53.77% of total revenue; key-metal extraction and recycling generated RMB 12.934 billion, accounting for 34.85%; power lithium-battery recycling generated RMB 1.817 billion, accounting for 4.89%; trading and other businesses generated RMB 2.410 billion, accounting for 6.49%.
• 2025 revenue by major product: Ternary precursors generated RMB 11.502 billion, accounting for 30.98% of total revenue; cobalt tetroxide generated RMB 5.505 billion, accounting for 14.83%; cathode materials generated RMB 2.955 billion, accounting for 7.96%; nickel-resource MHP and nickel plates generated RMB 7.329 billion, accounting for 19.74%; cobalt recycling generated RMB 2.494 billion, accounting for 6.72%; tungsten-resource recycling generated RMB 2.438 billion, accounting for 6.57%; comprehensive power-battery utilization generated RMB 1.252 billion, accounting for 3.37%; end-of-life vehicle utilization generated RMB 565 million, accounting for 1.52%.
• Main industrial chain: Nickel- and cobalt-bearing waste and laterite nickel ore → nickel sulfate, cobalt sulfate and other crystals → electrolytic nickel and cobalt metal → ternary precursors → ternary cathode materials → power and consumer-electronics batteries → retired-battery recycling.

2.3 Position in the Upstream and Downstream Value Chain and Cost-Profit Structure

GEM spans waste-resource recycling, hydrometallurgy and metal extraction, new energy-material manufacturing, and power-battery recycling and remanufacturing. It extends upstream toward resources through its Indonesian MHP projects and recycling businesses, while also operating in the midstream materials-manufacturing segment, where it is affected by customer bargaining power and industry competition.

• Major inputs include used power batteries and battery-electrode scrap, nickel-, cobalt-, lithium- and tungsten-containing industrial waste, electronic waste, end-of-life vehicles, low-grade laterite nickel ore from Indonesia, sulfuric acid, hydrochloric acid, alkalis, extractants and other hydrometallurgical auxiliary materials, as well as electricity, steam, oxygen and environmental-treatment services.
• Used batteries and industrial waste are geographically dispersed and complex in origin, subject to price fluctuations and stringent compliance requirements. As compliant recyclers expand capacity, competition for battery black mass, used batteries and cobalt- and nickel-containing waste may intensify.
• Indonesian laterite nickel projects are affected by global nickel prices, Indonesian mining policies, ore grade, energy prices and the operating stability of hydrometallurgical projects. Prices of nickel, cobalt and lithium affect product prices, inventory value and profits.
• At the end of 2025, the company had prepayments of RMB 4.525 billion, up 73.01% from the beginning of the year. The annual report attributed the increase mainly to business expansion and higher advance payments for raw materials resulting from rising prices.
• The company has certain competitive advantages in waste-resource processing technology and scale, but lacks full pricing power over bulk metals such as nickel, cobalt and lithium. Its upstream bargaining position is therefore characterized as “partial resource-integration capability plus partial price-taking.”
• Major downstream customers and partners include CATL and its subsidiary Brunp Recycling, BYD, EVE Energy, Samsung SDI, LG Energy Solution, SK On, ECOPRO, the Apple supply chain, Panasonic, Toyota, China Minmetals and XTC New Energy Materials.
• GEM’s 2025 annual report stated that it had established cooperation with more than 1,100 automakers and battery manufacturers worldwide, and formed dedicated closed-loop cooperation relationships with CATL, BYD, EVE and Toyota. The relevant customer and cooperation relationships can be confirmed from the company’s annual report.
• Leading battery and automobile manufacturers have strong procurement bargaining power and may use long-term contracts, price linkages, annual price reductions, payment terms and quality-compensation clauses to compress suppliers’ margins. Ternary precursors remain a competitive midstream materials segment with relatively rapid price pass-through.
• High-nickel, high-voltage and core-shell-structure precursors, cobalt tetroxide and closed-loop resource-recycling capabilities have value in customer certification and supply-chain stability. GEM’s bargaining power in high-end products and dedicated closed-loop cooperation is stronger than that of ordinary, homogeneous precursor suppliers.
• Overseas revenue in 2025 was RMB 12.810 billion, accounting for 34.51% of total revenue and increasing 63.22% from 2024. Domestic revenue was RMB 24.314 billion, accounting for 65.49%. Overseas expansion also creates foreign-exchange, tariff, cross-border-compliance and overseas-project operating risks.
• As of December 31, 2025, accounts receivable were RMB 4.983 billion, inventories were RMB 10.043 billion, prepayments were RMB 4.525 billion, accounts payable were RMB 2.988 billion, notes payable were RMB 5.284 billion, and contract liabilities were RMB 741 million. Calculated simply using 2025 revenue of RMB 37.124 billion, year-end accounts receivable/revenue was approximately 13.4%, inventories/revenue approximately 27.0%, prepayments/revenue approximately 12.2%, and accounts payable/revenue approximately 8.0%. Accounts receivable declined from RMB 6.972 billion at the end of 2024 to RMB 4.983 billion at the end of 2025, while prepayments rose from RMB 2.616 billion to RMB 4.525 billion and inventories increased from RMB 8.773 billion to RMB 10.043 billion. This indicates improved downstream collections but a significant increase in upstream purchasing and inventory capital usage. This assessment is based on static year-end balance-sheet data and does not use management indicators such as accounts-receivable turnover days; it is not equivalent to a complete conclusion on customer bargaining power.
• This research was unable to directly extract and cross-check the sales proportion attributable to the top five customers and the procurement proportion attributable to the top five suppliers from the text of GEM’s 2025 annual report. Accordingly, incomplete ratios reproduced on online pages are not used; specific concentration should be determined from the original tables in the 2025 annual report and subsequent regulatory disclosures.

GEM occupies a composite position characterized by “strong resource-recycling and smelting capabilities, substantial midstream materials-manufacturing scale, and relatively high downstream customer-certification barriers.” Compared with traditional waste-processing operations, it has greater technological and resource-integration value, but its midstream businesses such as ternary precursors remain exposed to customer price pressure and industry competition. The company does not rely solely on brand premiums, but maintains profitability through resource recycling, process technology, large-scale manufacturing, customer certification and value-chain integration. Future profit improvement will depend mainly on stable production at the Indonesian nickel-resource projects, a higher proportion of high-nickel and high-voltage materials, growth in power-battery recycling, improved economics for recovering low-value components, and smooth pass-through between raw-material and product prices.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

As of September 12, 2026, the latest periodic financial report was the 2026 interim report, announced on August 29, 2026. Net profit attributable to shareholders after deduction of non-recurring items was RMB 479 million in the first half of 2026, down 32.50% year on year; basic EPS was RMB 0.21, up 31.25%.

GEM’s first-half 2026 results featured low revenue growth, faster growth in net profit attributable to shareholders and pressure on non-recurring-item-adjusted profit. Net profit attributable to shareholders grew significantly faster than revenue, but non-recurring-item-adjusted net profit declined year on year, indicating divergent earnings quality and suggesting that part of the growth in attributable net profit was affected by non-recurring gains. Net cash generated from operating activities was RMB 608 million in the first half of 2026, down 58.02% year on year. Equity attributable to shareholders of the listed company at period-end was approximately RMB 21.646 billion, up 1.23% from the end of 2025. By business, key-metal recycling and extraction revenue was approximately RMB 7.161 billion, up 33.78%; power-battery recycling revenue was approximately RMB 942 million, up 8.70%; and core new energy-material manufacturing revenue was approximately RMB 8.819 billion, down 13.77%.

3.2 Earnings Forecasts

Earnings forecasts are as of September 11, 2026. Six institutions issued forecasts for the company’s 2026 performance during the preceding six months. These forecasts are drawn from excerpts of institutional research reports and are neither company commitments nor exchange-disclosed data. Forecasts vary considerably. Huaxin Securities’ forecast is notably higher than those of Western Securities, BOC International, Huatai Securities and Xiangcai Securities. The company’s sales-revenue targets are above RMB 48 billion for 2026, above RMB 60 billion for 2027 and above RMB 70 billion for 2028.

3.3 Valuation and Institutional Ratings

At the September 11, 2026 close, the company’s share price was approximately RMB 6.24, with a market capitalization of approximately RMB 31.84 billion and a price-to-book ratio of approximately 1.47x. P/E methodologies differ across platforms: Cai Bao Bang reported a trailing P/E of approximately 15.03x; Lixinger reported a P/E of approximately 17.42x and P/B of approximately 1.53x; and CFi reported a P/E of approximately 17.03x, non-recurring-item-adjusted P/E of approximately 27.86x and P/B of approximately 1.27x. Overall, current static or trailing P/E is approximately 15x–17x, while non-recurring-item-adjusted P/E is approximately 28x, making valuation relatively sensitive to non-recurring gains. Based on the central estimates of institutional earnings forecasts compiled by THS, 2026–2028 EPS is approximately RMB 0.39, RMB 0.56 and RMB 0.75, implying forward P/E multiples of approximately 16.0x, 11.1x and 8.3x. Based on BOC International’s EPS forecasts, the corresponding P/E multiples are approximately 16.9x, 12.2x and 8.8x. Valuation is not expensive, but it is predicated on continued earnings recovery and growth delivery. Key uncertainties include whether non-recurring-item-adjusted profit can recover, improvements in raw-material costs and capacity utilization at the Indonesian nickel projects, volume growth in key-metal and power-battery recycling, and the impact of non-recurring gains on full-year profit. Regarding target prices, Huatai Securities’ latest target price of RMB 6.86 implies limited upside from the RMB 6.24 closing price. THS’s institutional average target price of approximately RMB 8.33 and the overseas platform’s average target price of approximately RMB 6.42 differ substantially, so no single average should be used as the basis for a valuation conclusion.

4. Recent News and Announcements

4.1 Cumulative Share Repurchase Has Exceeded the Lower End of the Plan

On July 16, 2026, GEM approved a share-repurchase plan using its own funds or self-raised funds. The planned repurchase amount was no less than RMB 100 million and no more than RMB 160 million, at a price not exceeding RMB 10.60 per share. Repurchased shares are intended for equity incentives or an employee stock-ownership plan, with an implementation period of 12 months from approval by the board. As of August 31, 2026, the company had repurchased 15,496,194 shares, representing approximately 0.30% of current total share capital. The highest and lowest transaction prices were RMB 6.90 and RMB 6.60 per share, respectively, and total transaction value was RMB 105,037,309.50, excluding transaction fees. Cumulative repurchases have exceeded the lower limit of RMB 100 million but have not reached the upper limit of RMB 160 million. Because the repurchased shares are intended for equity incentives or an employee stock-ownership plan rather than direct cancellation, their long-term effect on total share capital differs from that of a cancellation-based repurchase. Investors should monitor whether repurchases continue toward the upper limit and the specific use of the shares.

4.2 Proposed Continued Sale of OKE Shares; Transaction Amount and Gains Remain Uncertain

On September 1, 2026, GEM announced that it proposed to continue selling no more than 7,790,507 shares of Zhuzhou OKE Precision Cutting Tools Co., Ltd. (688308), representing no more than 4.91% of OKE’s total share capital. Previously, in June 2026, the company sold 8,732,993 OKE shares through an inquiry-based transfer, for transaction proceeds of RMB 842,297,174.85, excluding transaction fees. The proposed sale is intended to optimize the asset structure, improve asset liquidity and capital-use efficiency, and meet future funding needs. As secondary-market prices and the actual number of shares sold remain uncertain, the company cannot yet determine the transaction amount or final profit. The transaction does not constitute a related-party transaction or a material asset restructuring, but remains subject to approval by the company’s second extraordinary general meeting of shareholders in 2026. This concerns GEM’s disposal of shares in another listed company and does not constitute a reduction by the controlling shareholder of GEM shares.

4.3 Proposed Financial Assistance of Up to US$56 Million to Associate GEN

GEM indirectly holds a 29% stake in PT GREEN ECO NICKEL (GEN), Indonesia. Because GEN is no longer included in the company’s consolidated financial statements, GEM’s previous operating loan to GEN passively became financial assistance, amounting to US$56 million. GEM HK and NEW HORIZON, GEM subsidiaries, propose to continue providing GEN with aggregate loans of no more than US$56 million in proportion to their shareholdings. The term will not exceed three years from the actual borrowing date, with an annual interest rate of no less than 5.5%. Interest will be settled annually, and principal and interest will be repaid in a lump sum at maturity. The facility may be used on a revolving basis during the authorization period. The matter constitutes a related-party transaction, has been reviewed and approved by the special meeting of independent directors, and will be submitted to the second extraordinary general meeting of shareholders in 2026. The arrangement can support the funding needs of the associate Indonesian nickel project and generate interest income, but it also increases GEM’s capital exposure to an associate outside the consolidated statements. Investors should monitor GEN’s operating cash flow, project profitability, nickel-price fluctuations and fund recovery.

4.4 Additional 2026 Estimated Daily Related-Party Transaction Quota of RMB 1.4 Billion with GEN

On September 1, 2026, GEM announced that, due to operating-development and centralized-procurement needs, it proposed to add a 2026 estimated daily related-party transaction quota of RMB 140 million for sales of sulfur, sulfuric acid, magnesium oxide and other raw and auxiliary materials to GEN, equivalent to RMB 1.4 billion. GEN’s original 2026 estimated quota for purchases of MHP from GEM was RMB 220 million, of which RMB 23.31808 million had been incurred as of the announcement date. After adding the sales quota for raw and auxiliary materials, the total estimated related-party transaction quota between the two parties for 2026 would be RMB 360 million, equivalent to RMB 3.6 billion. Transaction prices will reference market prices and be determined through negotiation, with settlement based on actual quantities and amounts. The proposal must be submitted to the second extraordinary general meeting of shareholders in 2026, and related shareholders must abstain from voting. The estimated quota does not equal actual revenue or profit. Investors should monitor pricing fairness, actual transaction amounts, accounts receivable and fund settlement.

4.5 By-Election of Independent Director and Public Solicitation of Voting Rights by China Securities Investor Services Center

On September 1, 2026, GEM announced the resignation of an independent director upon expiration of the term and the proposed by-election. Mr. Xia Hongying was nominated as an independent director of the seventh board of directors. On September 2, 2026, the China Securities Investor Services Center publicly nominated Mr. Xia Hongying as an independent-director candidate and publicly solicited voting rights from all shareholders from September 2 through 17:00 on September 15. The company plans to hold its second extraordinary general meeting of shareholders in 2026 on September 18 to consider the by-election of the independent director, the sale of OKE shares, the provision of financial assistance to an associate and related-party transaction, the additional estimated 2026 daily related-party transactions, amendments to the articles of association, and amendments to the draft articles of association applicable after the issuance and listing of H shares. As of September 12, 2026, no final voting result had been identified.

4.6 First-Half 2026 Results Disclosed; No Third-Quarter or Full-Year Earnings Forecast Yet Issued

As of September 12, 2026, no new formal earnings forecast, earnings flash or explicit preannouncement of an earnings increase or decrease for the third quarter or full year of 2026 had been identified. The company’s latest formal results document was the interim report disclosed on August 29, 2026. Net profit attributable to shareholders in the first half of 2026 was RMB 1.076 billion, up 34.68% year on year, while revenue was approximately RMB 17.987 billion, up 2.43%. The interim report showed that the overseas nickel projects were affected in the first half by temporary production cuts, annual shutdown maintenance and tight sulfur supply, and that the nickel-resource business continued to experience operating volatility. These are formal interim financial data, not an earnings forecast or market projection.

4.7 All Pledged Shares of the Controlling Shareholder Released

On July 31, 2026, GEM disclosed that all shares pledged by its controlling shareholder had been released. Public trading alerts indicated that Shenzhen Huifengyuan Investment Co., Ltd., the controlling shareholder, released a pledge over 28.85 million shares on July 29, 2026, representing approximately 0.57% of the company’s total share capital and approximately 6.67% of its holdings. As of September 12, 2026, no recent announcement had been identified showing that the controlling shareholder had added pledges or made a large-scale reduction in September 2026.

4.8 Regulatory and Power-Battery Recycling Policy Developments

As of September 12, 2026, no reliable announcement had been identified indicating that GEM had been penalized by regulators, placed under investigation, received a major inquiry letter or been subject to other significant regulatory measures in September 2026. The Interim Measures for the Administration of the Recycling and Comprehensive Utilization of Used New-Energy Vehicle Power Batteries took effect on April 1, 2026. The company’s annual report stated that the policy would promote upgrades in technology, environmental protection, safety and traceability among power-battery recycling companies, while non-compliant recyclers would face further elimination. Overall, the policy is favorable to companies with scale, technology and compliant qualifications. The actual impact on the company’s results will depend on recycling channels, used-battery prices, metal prices and industry capacity utilization.

4.9 Solid-State Battery Technology Developments Discussed in Investor Relations Activities

On September 4, 2026, GEM disclosed an investor-relations activity record involving solid-state battery technology developments and laboratory cooperation. The company also cautioned that actual production and operations are affected by raw-material security, external conditions and multiple other factors, and that output remains uncertain. Relevant data should be based on the company’s subsequent formal announcements. Such investor communications do not constitute formal orders, capacity-commissioning announcements or earnings commitments and should not be used directly as the basis for earnings forecasts.

5. Share-Price Performance and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

GEM’s closing price was RMB 6.24 as of September 11, 2026, near the 52-week low of RMB 6.15 disclosed by third-party market-data sources. The share price remained weak throughout the latest trading week. On September 11, turnover value rose to RMB 422 million while the share price fell, showing some characteristics of a high-volume correction. Technically, the closing price was only slightly above MA5 but below MA10, MA20, MA50, MA100 and MA200. The moving-average system was broadly bearish; MACD was negative and RSI(14) was below 30, indicating short-term oversold conditions but no confirmed trend reversal.

5.3 Short-Term Outlook (Next Week, Scenario Analysis for Reference Only)

⚠️ Risk warning: The following is a subjective scenario analysis based on closing data as of September 11, 2026. It does not constitute investment advice or a definitive forecast of future share prices.

1. Key Technical Levels

2. Scenarios for the Coming Week (Subjective Weights, Not Statistical Probabilities)

• Low-level consolidation (relatively high subjective heuristic weight, approximately 50% to 60%; not a statistical probability): Price range of approximately RMB 6.18~6.35. Trigger conditions include holding the RMB 6.18~6.21 support area, turnover value remaining around RMB 300 million~RMB 400 million, and no significant weakness in industry sectors or new negative news. RSI(14) is oversold, but MACD remains negative and the moving-average system remains bearish. Technically, this is closer to weak consolidation than confirmed trend reversal.
• Further weakness (medium subjective heuristic weight; not a statistical probability): Price range of approximately RMB 6.15~6.22, with a potential break below the 52-week low in an extreme case. Trigger conditions include a high-volume break below RMB 6.18 followed by a break below RMB 6.15, continued net outflows of institutional capital, and turnover value clearly above recent normal levels while the price closes lower. If RMB 6.15 is lost, the short-term support structure would be damaged. Because the source materials do not provide lower valid recent support data, no unverified downside target is provided.
• Stronger technical rebound (low-to-medium subjective heuristic weight; not a statistical probability): Price range of approximately RMB 6.30~6.45. Trigger conditions include a return above RMB 6.28 and a high-volume break above RMB 6.35, with daily turnover value clearly above the recent normal range of RMB 300 million~RMB 350 million and simultaneous strength in new energy materials, resource recycling or battery-material sectors. A move above approximately RMB 6.35 around MA20 could be regarded as preliminary confirmation of short-term stabilization and recovery. A further break above RMB 6.40~6.45 could create room for a continued rebound toward MA50, but absent volume confirmation, investors should remain alert to a reversal after a sharp rise.

3. Capital and Liquidity Background

Recent turnover ratios were approximately 0.92%~1.34%, with turnover value of approximately RMB 300 million~RMB 422 million. On September 11, turnover value was RMB 422 million and the turnover ratio was 1.34%, while the share price fell 1.58%. As of September 11, 2026, net institutional capital flow over the latest three days was approximately -RMB 129 million. The company had 431,896 shareholders as of June 30, 2026, and the top ten shareholders collectively held approximately 14.51%. The top ten shareholders included Hong Kong Securities Clearing, the Harvest CSI Rare Earth Industry ETF, the GF CSI New Energy Vehicle Battery ETF, the E Fund CSI Battery Theme ETF, state-owned investment companies and private funds. Holdings were relatively dispersed, so these data cannot confirm unified institutional control. The shareholder data are subject to quarterly disclosure lags, and the structure may have changed after the reporting period. Auxiliary data from THS as of July 16, 2026 also showed that the top ten tradable shareholders held approximately 731 million shares, representing 14.38% of the free float, and indicated a low level of institutional control. However, its indications regarding fund, social-security, trust and QFII holdings differ in methodology or update date from the company’s interim-report disclosures; the detailed disclosures in the 2026 interim report should therefore take precedence. Overall, GEM is not a small-cap stock with extremely low liquidity, but its large shareholder base, relatively low combined holding by the top ten shareholders and dispersed ownership mean that short-term rebounds depend heavily on incremental capital. When turnover value is insufficient, rebounds may lack sustainability, reverse after sharp rises or encounter weak order-book support.

A volume-confirmation signal to monitor is a sustained increase in daily turnover value to approximately RMB 500 million or more, together with a closing price above RMB 6.35. This could be regarded as relatively clear confirmation of capital participation and short-term trend recovery. If turnover expands but the share price continues to fall below RMB 6.18, the signal would be closer to high-volume exit or risk-release behavior.

4. Points to Monitor (Observation Framework Only, Not Trading Instructions)

• Observe whether the RMB 6.18~6.21 support zone holds, and whether the 52-week low near RMB 6.15 can be defended; this is an observation framework, not a trading instruction.
• Observe whether the closing price can regain and hold RMB 6.28 and RMB 6.35; this is an observation framework, not a trading instruction.
• Observe whether turnover value can expand continuously to approximately RMB 500 million or more and coincide with share-price gains; this is an observation framework, not a trading instruction.
• Observe whether net institutional capital outflows narrow and whether new energy materials and battery sectors recover in tandem; this is an observation framework, not a trading instruction.

The above scenario analysis is based on closing data and historical price and technical-indicator calculations as of September 11, 2026. Short-term share prices will also be affected by news, capital flows, the broader market and other factors. Technical indicators have inherent lags and limitations. This analysis does not guarantee future actual performance and does not constitute a buy or sell recommendation. Investors should independently assess the latest market information and bear investment risks themselves.

6. Industry Structure and Competitor Analysis

6.1 Industry Overview

GEM spans three industries: key-metal resource recycling, power-battery recycling and new energy battery materials. Its core competitive model combines resource access, recycling compliance, hydrometallurgy, materials manufacturing, customer certification and value-chain integration.

6.2 Competitive Landscape

• The ternary-precursor industry has substantial capacity and intense competition. Product prices are highly correlated with nickel, cobalt and manganese raw-material prices. High-nickel, high-voltage, low-cobalt and core-shell-structure products have higher technical and quality requirements, but the industry remains a midstream materials-manufacturing segment with relatively rapid price pass-through.
• In 2025, GEM’s ternary-precursor shipments were 149,790 tonnes, of which high-nickel and high-voltage products accounted for more than 90%. The company has certain technological strengths in high-nickel, ultra-high-nickel, high-voltage and core-shell-structure products.
• The power-battery recycling industry is transitioning from disorderly competition toward compliance, scale and closed-loop value chains. Participants include specialized recyclers, battery companies and their recycling subsidiaries, new-energy vehicle companies, lithium-battery materials and mining companies, local state-owned enterprises and resource-recycling platforms.
• As of the end of 2025, GEM had built six power lithium-battery recycling plants in China. All had been included on the Ministry of Industry and Information Technology whitelist. It had also established joint-venture power-battery recycling plants in South Korea and Indonesia.
• According to 2024 industry market-share data based on the capacity of companies on the MIIT whitelist, Brunp Recycling and CATL-related capacity accounted for approximately 6.38%, GEM approximately 5.91%, and Ganfeng Lithium and Xien Recycling approximately 4.72%. The data came from a third-party industry research institution. The statistical methodology and scope of affiliated companies and capacity under construction are uncertain, and the figures are not formal market-share data from the exchange or MIIT.
• Core competitive factors in power-battery recycling include recycling channels and battery sources, MIIT-whitelist status and environmental-compliance capabilities, nickel, cobalt and lithium recovery rates, recovery of low-value components such as iron phosphate and graphite, in-situ material remanufacturing, dedicated closed-loop agreements, overseas recycling networks and battery-passport compliance capabilities.

6.3 Major Competitors

GEM’s comprehensive competitiveness comes from recycling channels, MIIT-whitelist plants, experience in multi-metal recycling involving nickel, cobalt and tungsten, Indonesian nickel-resource projects, hydrometallurgy, precursor and cathode-material manufacturing, and dedicated closed-loop cooperation with leading battery and automobile companies. Compared with CNGR Advanced Material, GEM has a longer value chain and stronger resource-recycling characteristics. Compared with Huayou Cobalt, GEM is more distinctive in urban mining, used batteries and tungsten-resource recycling. Compared with the Brunp Recycling/CATL system, GEM covers a broader range of recycled materials and has richer experience in independent third-party recycling networks and multi-metal recycling. Its main constraints include metal-price volatility, working-capital tied up in raw-material procurement and inventories, downstream customer bargaining power, insufficient sources of retired batteries, overseas-project ramp-up and policy-compliance risks.

7. Risk Factors

• Metal-price and margin volatility: The company’s revenue and profitability involve numerous metals, including nickel, cobalt, lithium and tungsten. Its 2025 gross margin of approximately 14.70% remained below the levels in 2021 and 2024. A decline in metal prices or ineffective pass-through between raw-material and product prices could affect product prices, inventory value and recycling-business profits.
• Indonesian nickel-resource project operating risk: GEM disclosed that its Indonesian nickel projects were affected in the first half of 2026 by temporary production cuts, annual shutdown maintenance and tight sulfur supply. The projects also face uncertainties related to Indonesian mining policy, ore grade, energy and raw-material costs, hydrometallurgical stability and nickel-price volatility.
• Pressure on non-recurring-item-adjusted profit and cash flow: Net profit attributable to shareholders rose 34.68% year on year in the first half of 2026, but non-recurring-item-adjusted net profit fell 32.50% and net cash generated from operating activities declined 58.02%. If non-recurring gains decrease while the core business remains insufficiently recovered, full-year earnings quality may be weaker than the reported growth rate suggests.
• Working-capital utilization risk: At the end of 2025, inventories were RMB 10.043 billion and prepayments were RMB 4.525 billion. Prepayments rose 73.01% from the beginning of the year, and inventories also increased. Higher raw-material procurement and inventory usage may increase funding pressure and cause inventory impairment or earnings volatility if metal prices decline.
• Competition and customer bargaining risk in new energy materials: Ternary-precursor revenue declined year on year in 2025. Industry capacity is substantial and competition is intense. Leading battery and automobile customers have strong procurement bargaining power and may use long-term price linkages, annual price reductions, payment terms and quality clauses to compress GEM’s margins.
• Power-battery sources and business-model risk: The company’s recycling and dismantling volume grew rapidly in 2025, but used-battery sources are dispersed, prices fluctuate and compliance requirements are stringent. As compliant companies expand, competition for black mass, used batteries and nickel- and cobalt-bearing waste may intensify. The economics of recovering low-value components such as iron phosphate and graphite also remain uncertain.
• Related-party transaction and fund-recovery risk: The company proposes to provide up to US$56 million in loans to GEN, an associate outside the consolidated statements, and add an estimated annual related-party transaction quota of RMB 1.4 billion for raw and auxiliary materials with GEN. Estimated quotas do not equal actual revenue or profit. Investors should monitor pricing fairness, GEN’s operating cash flow, project profitability and recovery of loan principal and interest.
• Overseas operations and cross-border-compliance risk: Overseas revenue was RMB 12.810 billion in 2025, accounting for 34.51% of total revenue. Overseas expansion exposes the company to foreign-exchange, tariff, cross-border-compliance, overseas-project operating and local-policy risks.
• Uncertainty related to non-recurring gains and asset disposals: The company proposes to continue selling no more than 7.7905 million OKE shares, but the transaction amount and final gain have not been determined. If disposal gains make a substantial contribution to profit, the gap between attributable net profit and non-recurring-item-adjusted profit may widen.
• Weak technical share-price risk: As of September 11, 2026, the share price was RMB 6.24, below multiple medium- and long-term moving averages. MACD was negative and net institutional capital outflow over the latest three days was approximately RMB 129 million. If the 52-week low near RMB 6.15 is breached, the short-term support structure may weaken further, while existing data are insufficient to confirm lower support levels.

8. Conclusion and Outlook

GEM possesses integrated capabilities in multi-metal recycling, hydrometallurgy, precursor manufacturing, power-battery recycling and leading-customer certification. Its value-chain integration is stronger than that of a pure precursor or pure recycling company. Policy support for compliant and scaled power-battery recycling, together with the company’s whitelist plants, overseas recycling network and dedicated closed-loop cooperation, should create long-term business opportunities. In addition, the key-metal recycling business maintained relatively rapid growth in the first half of 2026, suggesting that resource recycling may provide periodic earnings support.

However, the company remains in a period of continued investment in overseas projects, new-material capacity and recycling systems. Midstream materials businesses such as ternary precursors face intense competition and strong customer bargaining power. The decline in non-recurring-item-adjusted profit and operating cash flow in the first half of 2026, combined with increased inventories and prepayments and temporary production cuts, maintenance and tight sulfur supply at the Indonesian nickel projects, means that short-term earnings delivery still requires monitoring. Institutional forecasts generally point to profit growth in 2026–2028, but forecast ranges differ significantly. Whether future results meet expectations will depend on stable production at resource projects, recovery in the materials business and a reduced impact from non-recurring gains.

From a market-performance perspective, the share price is close to the 52-week low disclosed by third-party data. The moving-average system and capital flows are weak. RMB 6.15~6.18 is an important observation range, while around RMB 6.35 is the key level for monitoring short-term recovery. Fundamental improvement and technical recovery have not yet been confirmed in tandem. Investors should closely track non-recurring-item-adjusted profit, operating cash flow, Indonesian nickel-project operations, recycling-business volume growth, actual related-party transaction amounts and fund recovery.

Data Sources

• https://static.cninfo.com.cn/finalpage/2026-04-22/1225142250.PDF
• GEM Co., Ltd. 2024 Annual Report
• GEM (002340) Annual Data Analysis—AskCI Industry Research Institute Database
• Industry Deep Dive: 2025 China Battery-Recycling Industry Competitive Landscape and Market Share
• GEM (002340) Company Announcements—GEM: Summary of the 2026 Interim Report, Sina Finance
• First-Half Net Profit Attributable to Shareholders Increased Year on Year; Business Structure Diversified—Macroeconomic Research Report, Data Center, Eastmoney
• GEM: First-Half Net Profit Increased 34.68% Year on Year; Proposed Cash Dividend of RMB 0.32 per 10 Shares—Eastmoney
• GEM (002340) Earnings Forecasts—F10, THS Financial Services
• Earnings Forecast
• Xiangcai Securities Initiates Coverage of GEM and Assigns a “Buy” Rating
• Huaxin Securities—GEM (002340) Corporate Event Commentary: Steady Growth; Ultra-High-Nickel Products Accelerating—260512.pdf
• GEM (002340) Stock News—Sina Finance
• Huaxin Securities: Buy Rating for GEM
• GEM (002340) Analyst Consensus Estimates—Market Sentiment—Investing.com
• GEM (002340) Stock Information—Data Platform
• Historical P/E Trend of GEM—Year-by-Year Data Comparison | Cai Bao Bang
• GEM (002340) P/E, Valuation and Fundamentals—Lixinger
• GEM (002340)—Stock Quotes and Market Overview—CFi
• GEM Co., Ltd. 2025 Annual Report
• GEM (002340) Company Announcements—GEM: 2026 Interim Report, Sina Finance
• GEM (002340) Latest Developments—F10, THS Financial Services
• GEM (002340) Historical Top-Ranking Data
• GEM (002340) Block Trades and Capital Flows—Lixinger
• GEM (002340) Stock Chart—Real-Time Market Trend Analysis—Investing.com
• GEM (002340)—Historical Trading Data | Dabanke
• GEM (002340) Technical Analysis, Future Forecasts and Trading Suggestions—Investing.com

This report was automatically retrieved, compiled and generated by AI based on publicly available information. The information is as of the September 11, 2026 close; moving-average, MACD and RSI data are as of September 11, 2026 06:50 GMT, and shareholder-structure data are as of June 30, 2026. There may be differences in timeliness. Specific data should be based on the company’s formal announcements and authoritative data terminals. This report is for information organization and research reference only and does not constitute investment advice. Investors should make independent judgments and bear investment risks themselves.