Zhejiang Huayou Cobalt Co., Ltd. (603799)

Equity Research Report　|　Industry: Energy Metals/Lithium Battery Materials　|　Report date: September 13, 2026　|　Closing price on Friday, September 11, 2026; certain technical-indicator snapshots are dated August 31 or September 4, 2026, and exact moving-average figures for September 11 were unavailable

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

1. Executive Summary

Huayou Cobalt currently exhibits a combination of earnings growth and share-price weakness. In the first half of 2026, revenue reached RMB 55.568 billion, up 49.39% year on year, while net profit attributable to shareholders reached RMB 3.507 billion, up 29.38%. However, net profit attributable to shareholders in the second quarter alone was only RMB 1.010 billion, down 30.76% year on year and 59.55% sequentially, indicating that revenue expansion has not yet fully translated into profit growth. The September 11, 2026 closing price was RMB 36.06, down approximately 46%–47% year to date, with an intraday low of RMB 35.40. The corresponding forward PE was approximately 9.73x and PB approximately 1.34x, although valuation figures vary across sources.

The company’s core competitiveness lies in its integrated industrial chain covering nickel, cobalt and lithium resource development; smelting and processing; ternary precursor and cathode-material manufacturing; and recycling. In 2025, the company generated revenue of RMB 81.019 billion and net profit attributable to shareholders of RMB 6.110 billion, representing year-on-year growth of 32.94% and 47.07%, respectively. Ternary cathode-material shipments exceeded 100,000 tonnes, up 108%; nickel-product shipments were approximately 292,500 metal tonnes, up 58.72%; and lithium carbonate shipments reached 54,400 tonnes, up 38.58%. Its Indonesian nickel intermediate capacity, cobalt resources in the Democratic Republic of the Congo and Zimbabwe’s Arcadia lithium mine support higher resource self-sufficiency and capacity expansion.

Growth is primarily driven by upstream capacity ramp-up, a higher self-sufficiency ratio for MHP feedstock, recovering metal prices, increased shipments of high-nickel cathode materials and overseas materials-capacity construction. The company has secured certain long-term cathode-material and precursor supply contracts and established long-term supply relationships with customers including EVE Energy and LGES. However, actual execution volumes and pricing mechanisms under these contracts remain uncertain. The ternary route is also exposed to competition from lithium iron phosphate and pressure on material-processing fees. Overall gross margin in the first half of 2026 was 19.59%, up 3.73 percentage points year on year, while the gross margin of overseas operations was 18.55%, below the 20.21% margin of domestic operations.

Recent operating pressure was concentrated in the second quarter. Finance costs increased sharply year on year to RMB 1.769 billion, R&D expenses rose to RMB 1.121 billion, and provisions were recognized for inventory impairment and bad debts. The Indonesia Huafei project reduced production from May, cobalt prices declined sequentially, and elevated sulfur prices also disrupted profitability. The company also has substantial external guarantees. As of August 31, 2026, total guarantees amounted to RMB 101.078 billion, triggering special risk warnings for exceeding 50% of the latest audited net assets and 100% of net assets, among other thresholds.

2. Company Overview

2.1 Basic Information

2.2 Main Businesses and Product Portfolio

• New-energy business (value-chain leader): ternary cathode materials and lithium cobalt oxide materials for electric vehicles, energy storage, consumer electronics, the low-altitude economy and embodied intelligence; raw materials are supplied internally by subsidiaries and procured externally; customers are lithium-battery manufacturers, served mainly through direct sales; pricing references market prices for nickel, cobalt, manganese and lithium metals, plus technology content and supply-demand conditions
• New-materials business (connecting upstream and downstream): ternary precursors and new nickel, cobalt and lithium materials; precursor feedstock is mainly self-supplied, supplemented by external purchases; customers are lithium-battery cathode-material manufacturers, served mainly through direct sales; pricing references nickel, cobalt and manganese metal prices; the annual report states that procurement prices for nickel and cobalt raw materials are set at a specified discount to market metal-trading prices
• Resource business (upstream): mining, beneficiation and initial processing of nickel, cobalt, lithium and copper; Indonesia is the main base for controlled upstream resources, producing mixed hydroxide precipitate (MHP), nickel matte and other nickel intermediates; Africa is the initial strategic base, producing crude cobalt hydroxide and electrowon copper; the lithium business covers mining and beneficiation of owned assets and initial processing, including spodumene concentrate, petalite concentrate and lithium sulfate
• Recycling business: Huayou Quzhou, Resource Recycling and Jiangsu Huayou are included in the first, second and fourth batches, respectively, of companies listed under the Ministry of Industry and Information Technology’s Industry Standard Conditions for the Comprehensive Utilization of Used New-Energy Vehicle Power Batteries

2.3 Position in the Value Chain and Cost/Profit Structure

The company states that it is primarily engaged in the R&D, manufacturing and sale of lithium-battery materials, energy metals and energy materials. With lithium-battery materials as its core, and energy metals and energy materials as growth engines, it has built an integrated new-energy ecosystem covering nickel, cobalt and lithium resource development → green smelting and processing → ternary precursor and cathode-material manufacturing → resource recycling. Its operating model is overseas resources, international manufacturing and global markets. Its strategic approach is to control upstream resources, expand downstream markets and strengthen capabilities in the middle of the chain. In 2026, the company proposed the goal of “five years of hard work to build another Huayou.”

• Nickel (core input): the key input is Indonesian laterite nickel ore. The annual report states that supply is secured mainly through participating interests in mines and long-term supply agreements, supplemented by market-based procurement. Nickel ore is therefore not fully self-supplied and a substantial proportion is still purchased at market prices. However, the company produces its own intermediates through hydrometallurgy, providing lower-cost feedstock for domestic nickel and precursor operations. The annual report and broker research both emphasize a further increase in MHP self-sufficiency.
• Cobalt: owned copper-cobalt ore in the DRC plus cobalt produced as a by-product of Indonesian nickel hydrometallurgy. Company personnel reportedly referred to a cobalt-to-nickel by-product ratio of approximately 1:9; this originated from a stock-forum post and was not verified against the annual report, so it is for reference only. Self-supplied and externally purchased cobalt ore coexist.
• Lithium: the owned Arcadia mine plus lithium-salt capacity in Guangxi. Feedstock has shifted from externally purchased lithium salts toward self-produced lithium concentrate and lithium sulfate, supplemented by external purchases.
• Pricing mechanism (key point): the 2025 annual report explicitly states that procurement prices for nickel and cobalt raw materials are determined at a specified discount to market metal-trading prices. This means the company is a price-taker with respect to metal benchmark prices, while retaining some bargaining power over the discount. Gross margins are therefore driven mainly by metal-price fluctuations and the degree of vertical self-sufficiency, rather than by procurement-cost compression alone.
• Supplier concentration: a reliable figure for the purchase share of the top five suppliers in the 2025 annual report was not obtained during this research. Relevant pages were often JavaScript-rendered or incomplete in OCR. The data are unavailable and should not be estimated.
• Customers are lithium-battery manufacturers, with cathode and precursor products sold directly. End customers include LGES/LGC, POSCO/POSCO Chemical, CATL, EVE Energy, Samsung SDI, Tesla, Volkswagen, BMW, Hyundai, Stellantis, General Motors, Ford, Daimler, Renault, Nissan and Jaguar Land Rover. In consumer electronics, the company supplies the industrial chains of Apple, Huawei, OPPO, vivo, Samsung, HP and Dell in volume.
• Customer concentration (conflicting definitions): a repost of the annual report’s top-five customer revenue table by Chaguwang shows that the five largest customers accounted for RMB 39.353 billion, or 48.57% of revenue, as of December 31, 2025; the fifth-largest customer accounted for 6.31%. On December 31, 2024, the top five accounted for RMB 23.976 billion, or 39.34%. Another excerpt of the 2025 annual report reproduced by Jiufang Intelligence shows the five largest trading-business customers totaling RMB 57.048407 billion, or 7.04%; this appears to be a trading-business-only definition and should not be mixed with the company-wide figure. A private Xueqiu post claimed that the five largest domestic customers accounted for less than 12.8% of revenue in the 2025 annual report, but the source could not be independently verified and conflicts materially with the 48.57% figure. The more credible conclusion is that the company-wide top-five customer share was approximately 48.6% in 2025, up from 39.3% in 2024. Lower figures may apply to domestic or trading-business definitions. The latest annual-report table should be used.
• Structural bargaining dynamics: cathode and precursor pricing references nickel, cobalt, manganese and lithium prices, plus technical content and supply-demand conditions. This is a metal-price-linked, cost-plus model, allowing a considerable degree of price-risk pass-through to downstream customers, unlike annual price reductions in auto-parts supply. However, downstream battery leaders continue to pressure processing fees and per-tonne earnings, while competition between ternary and lithium-iron-phosphate routes weakens bargaining power in the ternary segment.
• Evidence of long-term volume commitments in 2025: 215,800 tonnes of cathode materials and 155,600 tonnes of precursors were covered by long-term supply contracts. The company signed a contract with EVE Energy for 127,800 tonnes of ultra-high-nickel cathodes from 2026 to 2035, supplied by the Hungarian plant. Media estimates put the contract value above RMB 21.0 billion, but this is not an amount disclosed by the company. The company signed orders with LGES for 76,000 tonnes of precursors and 88,000 tonnes of cathodes, and a memorandum with international customers for 79,600 tonnes of ternary precursors.
• A research note titled “Huayou Cobalt (603799) 2025 Annual Report Review: Revenue and Net Profit Both Increased Year on Year, Receivables Rose” was identified. However, the working-capital section was truncated and did not provide receivables as a percentage of net profit or revenue, receivables turnover days, prepayments or payables. These data should be supplemented using the latest annual report.
• The company-wide top-five customer share was approximately 48.57% in 2025, versus 39.34% in 2024. This figure comes from a single repost of the annual-report customer table and conflicts with the private Xueqiu claim of less than 12.8%. Supplier concentration remains unavailable.

The company occupies an upper-middle to upstream position on the smile curve. Through Indonesian nickel development, hydrometallurgical MHP and nickel matte production, cobalt mines in the DRC, the Arcadia lithium mine in Zimbabwe and integrated smelting and processing, it captures upstream resource profits. It also extends downstream into ternary precursor and cathode-material manufacturing, although processing fees are pressured by leading battery customers and ternary materials have weaker bargaining power than lithium-iron-phosphate materials. Drivers of further margin improvement include inventory gains and product-price linkage from higher metal prices, lower costs from increased MHP self-sufficiency, product-mix upgrades from a higher share of 9-series ultra-high-nickel and premium cylindrical ternary products, and scale effects from lithium-mine production and the integrated closed loop.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

The latest financial report is the 2026 interim report as of June 30, 2026, disclosed on the evening of August 18, 2026: total operating revenue was RMB 55.568 billion, up 49.39%; net profit attributable to shareholders was RMB 3.507 billion, up 29.38%; adjusted net profit was RMB 3.311 billion, up 27.97%; basic EPS was RMB 1.86; weighted-average ROE was 7.05%; net operating cash flow was RMB 2.148 billion, up 32.76%; gross margin was 19.59%, up 3.73 percentage points; and the debt-to-asset ratio was 64.28%. In 2025, revenue was RMB 81.019 billion, up 32.94%; attributable net profit was RMB 6.110 billion, up 47.07%; adjusted attributable net profit was RMB 5.793 billion, up 52.64%; total profit was RMB 8.330 billion, up 49.16%; basic EPS was RMB 3.34; and the proposed dividend was RMB 0.50 per 10 shares, including tax, representing the company’s strongest annual performance. In 2024, revenue was RMB 60.946 billion, down 8.08%; attributable net profit was RMB 4.155 billion, up 23.99%; and adjusted attributable net profit was RMB 3.795 billion, up 22.71%. In 2023, revenue was RMB 66.304 billion and attributable net profit was RMB 3.351 billion; year-on-year data were not provided. Sources: China Securities Journal, Securities Daily, Xinhua Finance, CLS, Mysteel, Shanghai Securities News, Founder Securities research, Securities Star, and etnet.

Although attributable net profit for 1H2026 increased 29.38% year on year, 2Q2026 attributable net profit was RMB 1.010 billion, down 30.76% year on year and 59.55% sequentially. Adjusted net profit was RMB 1.240 billion, down 8.82% year on year, indicating revenue growth without profit growth. Broker and media explanations for the quarterly decline include: (1) finance costs up 94.06% year on year to RMB 1.769 billion, with foreign-exchange losses caused by currency volatility; (2) R&D expenses up 109.21% to RMB 1.121 billion; (3) impairment charges, including RMB 306 million for inventory and RMB 322 million for receivables; and (4) operational factors, including production cuts at the Indonesian Huafei nickel-cobalt project from May, sequentially lower cobalt prices and high sulfur prices caused by the Strait of Hormuz blockade. The 2Q2026 year-on-year decline of 30.76% is opposite to the 1H2026 increase of 29.38% because of the high base in the first quarter and the second-quarter impact of expenses, impairments and production cuts. The two bases should not be mixed.

3.2 Earnings Forecasts

All 2026–2028 earnings forecasts come from single-company models by individual brokers and do not represent a multi-broker consensus. Different brokers’ 2026 attributable-net-profit forecasts range from RMB 7.26 billion to RMB 10.4 billion, reflecting substantial disagreement. The RMB 7.26/9.42/11.13 billion series published by CFI.cn on August 24, 2026 did not identify the institution, is single-source and deviates materially from most broker estimates; it should be treated cautiously and verified further. Western Securities’ forecast was issued on December 22, 2025, before the 2025 annual report; its 2025 forecast of RMB 5.752 billion was below the eventual actual figure of RMB 6.110 billion. Ping An Securities previously forecast RMB 7.75/9.00 billion for 2026–2027 and raised the figures to RMB 9.65/11.82 billion on April 16, 2026. Sources: Gelonghui, Securities Star, Sina Finance research pages and CFI.cn.

3.3 Valuation and Institutional Ratings

The PE figures disclosed by brokers are forward PEs based on the prices on their respective report dates. 2026 forecast PE is generally in the 12x–13x range, 2027 in the 9x–10x range and 2028 in the 8x–9x range. Known target prices include RMB 113 from Soochow Securities on January 7, 2026, based on 20x 2026 PE; RMB 87 from Soochow Securities on April 17, 2026, based on 16x 2026 PE; and RMB 78.98 from Western Securities on December 22, 2025. The wide range mainly reflects different report-date prices and PE assumptions. A cross-checked latest real-time share price, total market capitalization, PE (TTM) and PB was not obtained. Eastmoney and Tonghuashun quote pages were largely JavaScript-rendered and often returned “loading” or “no data,” while the final two real-time valuation searches were not completed because of tool limits. Valuation conclusions are therefore based mainly on broker-report dates rather than real-time data. For investment decisions, the current share price and market capitalization should be reconfirmed through a real-time source. For background only, Sina Finance showed a price of approximately RMB 54.80 on April 7, 2026, while Soochow Securities used a closing price of RMB 75.62 on January 7, 2026; the dates differ and are not directly comparable.

4. Recent News and Announcements

4.1 2025 Preliminary Earnings-Increase Announcement

The company expected 2025 attributable net profit of RMB 5.85–6.45 billion, up 40.80%–55.24%, an increase of RMB 1.695–2.295 billion. Adjusted attributable net profit was expected at RMB 5.6–6.3 billion, up 47.56%–66.00%, an increase of RMB 1.805–2.505 billion. The 2024 bases were attributable net profit of RMB 4.155 billion, adjusted net profit of RMB 3.795 billion and EPS of RMB 2.50. The preliminary growth drivers were above-target production at the Indonesia Huafei project, stable high production at the Huayue project, increased MHP self-sufficiency, recovering cobalt and lithium carbonate prices, management reform and cost reduction. These figures were unaudited preliminary estimates; the annual report governs.

4.2 2025 Annual Report

The annual-report summary was disclosed on April 8, 2026. The final audited attributable-net-profit figure was not obtained in this research, although it was expected to fall within the preliminary range of RMB 5.85–6.45 billion. The annual-report text should be used for confirmation.

4.3 1Q2026 Report

Revenue was RMB 25.804 billion, up 44.62%, including RMB 25,803,754,637.51. Attributable net profit was RMB 2.497 billion, up 99.45%, including RMB 2,497,278,226.82. Adjusted attributable net profit was RMB 2.07 billion, up 68.76%. Basic EPS was RMB 1.33. Based on estimated 4Q2025 attributable net profit of approximately RMB 1.894 billion, sequential growth was approximately 31%. The drivers were higher nickel, cobalt and lithium prices, the release of integration benefits and increased product sales.

4.4 1H2026 Data Pending Verification

Eastmoney’s business-composition page showed data as of June 30, 2026: cathode materials RMB 12.25 billion, nickel products RMB 10.80 billion, trading and other RMB 9.558 billion, nickel intermediates RMB 9.510 billion, lithium products RMB 4.025 billion, ternary precursors RMB 3.768 billion, cobalt products RMB 3.683 billion and copper products RMB 1.976 billion. This suggests that the 2026 interim report may have been disclosed around August 2026. A confirmed authoritative figure for 1H2026 attributable net profit was not obtained. This is a single-source, unverified item and should be checked separately.

4.5 Share Repurchase to Protect Company Value and Shareholder Interests

On July 20, 2026, the seventh Board of Directors approved the repurchase plan at its third meeting under Announcement No. 2026-056, disclosed July 21. The repurchase amount is at least RMB 600 million and no more than RMB 1.0 billion; the maximum price is RMB 50 per share; and the term is three months from board approval, from July 20 to October 19, 2026. The purpose is to “protect company value and shareholder interests,” not cancellation or equity incentives. The first repurchase occurred on August 20, involving 500,000 shares, or 0.03% of total share capital, at RMB 39.20–39.85 per share, for RMB 19.7279 million. By the end of August, cumulative repurchases reached 1.97053 million shares, or 0.104% of total share capital, at RMB 38.75–39.95 per share, with cumulative payment of RMB 77.5541 million. The actual trading range was significantly below the RMB 50 ceiling, and substantial room remained before the RMB 1.0 billion maximum. The pace was relatively slow and subsequent monthly progress should be monitored.

4.6 Cancellation of Restricted Shares Repurchased for Equity Incentives

The board approved the measure on June 11, 2025, and the second extraordinary shareholders’ meeting approved it on July 2. Due to departures of certain participants in the 2023/2024 incentive plans and failure to meet the company-level performance target for the second unlocking period of the 2023 plan, 3.17498 million shares were repurchased and cancelled, comprising 390,200 shares, 2,784,780 shares and 118,700 shares. Share capital changed from 1,701,522,003 shares to 1,698,347,023 shares. Registered capital was changed accordingly under Announcement No. 2025-074 dated July 3, 2025, and Implementation Announcement No. 2025-120 dated October 29, 2025. This was an incentive-related cancellation due to performance failure or employee departure and differs from the 2026 open-market repurchase for shareholder protection.

4.7 Shareholder and Controlling-Shareholder Pledges

Based on the latest records obtained, all dated to late 2025, Huayou Holding Group frequently pledged and released shares. On December 2, 2025, it released a pledge over 12.56 million shares, representing 4.07% of its holdings and 0.66% of total share capital, leaving 135.9 million pledged shares. On November 19, it pledged 32.0 million shares, representing 10.37% of its holdings and 1.69% of total share capital, bringing cumulative pledged shares to 148.4 million, or 48.09% of its holdings and 7.83% of total share capital. On November 10, it pledged 5.0 million shares, while cumulative pledged shares previously stood at 116.4 million, or 37.72% of its holdings. On November 6, it released 70.69 million shares across two pledges. Actual controller Chen Xuehua pledged 22.52 million shares on November 7, representing 27.30% of his holdings and 1.19% of total share capital; cumulative pledged shares reached 26.52 million, or 32.14% of his holdings and 1.40% of total share capital. He released 18.27 million shares on November 6. These figures are from a single Eastmoney list and were not checked against each original announcement. No 2026 updates were obtained. The controlling shareholder’s pledge ratio of approximately 48% of holdings is a risk point requiring monitoring.

4.8 Major Sales Contract with EVE Energy

Chengdu Bamo Technology, a subsidiary, signed a product-supply framework agreement with Huizhou EVE Energy. From 2026 to 2035, Chengdu Bamo’s Hungarian plant will supply approximately 127,800 tonnes of ultra-high-nickel ternary cathode materials to EVE Energy’s Hungarian plant, including approximately 126,500 tonnes from 2027 to 2031. Pricing will be negotiated under the agreed mechanism. The agreement does not constitute an earnings commitment, and the company stated that it would not have a material impact on current-period results. Actual sales volumes remain uncertain. Eastmoney’s “Company News” description is consistent with this account.

4.9 Other Contract and Cooperation Announcements

A September 30, 2025 announcement concerned a major sales contract. A December 27, 2025 announcement concerned a memorandum of understanding. On March 18, 2025, Tianjin Bamo, a subsidiary, signed a strategic cooperation agreement in solid-state batteries with Beijing Weilan New Energy. These three items were obtained from single sources and require verification.

4.10 External-Guarantee Update

In August 2026, the company provided guarantees totaling RMB 4.706 billion for 10 subsidiaries and 2 associates. This included RMB 3.612 billion for subsidiaries with debt-to-asset ratios above 70% and RMB 774 million for associates. As of August 31, 2026, external guarantees provided by the company and its controlled subsidiaries totaled RMB 101.078 billion, or RMB 1,010,777.206 million. The announcement flagged special risks because guarantees exceeded 50% of the latest audited net assets, total guarantees exceeded 100% of net assets and guarantees to entities outside the consolidated statements exceeded 30% of net assets. Expected 2026 guarantee limits were RMB 170.0 billion for subsidiaries, including no more than RMB 60.0 billion for subsidiaries with debt-to-asset ratios below 70% and RMB 100.0 billion for those above 70%, plus no more than RMB 10.0 billion for associates. The very large guarantee scale and excess over 100% of net assets represent a contingent-liability and financial-risk signal.

4.11 Recent Governance Procedures

On August 18, 2025, an extraordinary shareholders’ meeting approved the cancellation of the supervisory board and revisions to the articles of association and other governance policies. On October 30, a notice was issued for the fourth extraordinary shareholders’ meeting held on November 19, which approved external financial assistance with 99.6890% of votes in favor. The sixth Board of Directors held its 38th meeting on April 6, 2026, and the 2025 annual shareholders’ meeting was held on April 28 to consider the 2026 guarantee limits. The seventh Board held its third meeting on July 20 to approve the repurchase plan, indicating that the board transition had been completed.

4.12 Financing Announcements

The company announced the issuance results of the eighth tranche of 2025 ultra-short-term commercial paper on December 17, 2025, and the first tranche of 2025 green technology innovation bonds on October 29, 2025. The source was a single Dazhihui announcement list.

4.13 Abnormal Share-Price Volatility

An announcement on October 10, 2025 addressed abnormal trading volatility. Public trading information for October 9 showed that the cumulative deviation in gains over three consecutive trading days reached 20%. Source: Sohu.

4.14 Convertible-Bond Event

“Huayou Convertible Bonds” (113641) were redeemed early and delisted. Redemption reminders were issued intensively in September 2025. Cumulative conversion reached 10% of pre-conversion share capital on September 16, and redemption results and share-capital changes were disclosed on September 30 and in October 2025.

4.15 Equity Sale

On September 9, 2025, the sixth Board of Directors held its 33rd meeting and passed a resolution concerning the sale of part of the equity interest in an associate. Source: Dazhihui, single source.

4.16 Uncertainties and Limitations

1. The latest announcement obtained was the external-guarantee update dated September 10, 2026, so the “current” date is treated as early September 2026. If the actual date is later, announcements from mid-to-late September should be added.

2. No authoritative figure for 1H2026 attributable net profit was obtained. Only Eastmoney’s June 30, 2026 business-composition data were available; these are single-source and unverified.

3. Several 2025 announcements appeared only in aggregated Dazhihui or Sohu lists, and the original texts were not obtained. Key amounts or terms may therefore be missing.

4. Share-pledge and release data came from an Eastmoney summary page, were not checked announcement by announcement and cover 2025 only. New 2026 changes are unavailable.

5. The 2025 preliminary earnings estimate was unaudited and should be used as a range reference rather than a final figure.

6. No major regulatory penalty or inquiry concerning the company in 2026 was identified. Regulatory and policy issues mainly involve the special guarantee warning, governance revisions and indirect industry effects such as DRC cobalt-export quotas and Indonesian nickel policy.

7. All prices and amounts are tied to their dates. The RMB 38.75–39.95 repurchase range refers to August 2026 transactions, while total guarantees are as of August 31, 2026.

5. Share-Price and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

5.3 Short-Term Outlook, Next Week

Scenario analysis for reference only.

6. Industry Structure and Competitor Analysis

6.1 Industry Overview

The company operates in the nickel subsegment of energy metals within the non-ferrous metal smelting and rolling-processing industry. Its businesses cover the R&D, manufacturing and sale of lithium-battery materials, energy metals and energy materials, with an integrated ecosystem spanning nickel, cobalt and lithium development → green smelting and processing → ternary precursor and cathode-material manufacturing → resource recycling.

6.2 Competitive Landscape

• Industry competition: competition between ternary cathode materials and lithium iron phosphate remains intense. Ternary materials have weaker bargaining power than lithium iron phosphate. In 2025, the company’s ternary cathode shipments exceeded 100,000 tonnes, up 108%; its market share exceeded 33% in 9-series ultra-high-nickel products and 60% in premium cylindrical ternary materials.
• Resource footprint: in Indonesia, the company has built the 60,000-tonne Huayue hydrometallurgy project, the 45,000-tonne Huake nickel-matte project and the 120,000-tonne Huafei hydrometallurgy project, and acquired the Qingtian pyrometallurgy project, totaling approximately 245,000 metal tonnes per year of nickel-intermediate capacity. The 120,000-tonne Pomalaa (KNI) hydrometallurgy project with Vale Indonesia and Ford is expected to be completed before the end of 2026. The 60,000-tonne Sorowako hydrometallurgy project with Vale Indonesia is progressing through the preliminary stage, while the 40,000-tonne Huaxing pyrometallurgy project has begun construction. More than 1.4 billion wet tonnes of Indonesian nickel resources have been secured.
• Cobalt and lithium resources: owned copper-cobalt mines in the DRC plus cobalt by-products from Indonesian nickel hydrometallurgy. Company personnel stated that annual cobalt capacity would exceed 30,000 tonnes in 2026, although this is unaudited and should be checked against the annual report. The Arcadia lithium mine in Zimbabwe is 100%-owned; resources increased from 1.5 million tonnes of LCE to 2.45 million tonnes of LCE, with grade rising to 1.34%. Its supporting 50,000-tonne-per-year lithium-sulfate project completed construction and entered trial production in 1Q2026. The company is acquiring Ghana’s Ewoyaa lithium mine, with an acquisition agreement signed according to the company’s investor-interaction platform on August 31, 2026.
• Overseas materials footprint: Phase I of the Hungarian cathode-material project, with 25,000 tonnes of capacity, entered production-line commissioning. Some production lines at the Korean Gumi cathode project, developed with LG, have entered operation.
• 2025 product shipments: ternary cathodes exceeded 100,000 tonnes, up 108%; nickel products were approximately 292,500 metal tonnes, up 58.72%, including 236,500 tonnes of Indonesian MHP, up 30%; cobalt products were approximately 46,500 tonnes, broadly flat; lithium carbonate was 54,400 tonnes, up 38.58%; precursor shipments grew slightly.
• Recycling: Huayou Quzhou, Resource Recycling and Jiangsu Huayou are included in the first, second and fourth batches, respectively, of companies recognized under the MIIT industry standards for used power-battery utilization.

6.3 Major Competitors

Huayou Cobalt has a significant vertical-integration advantage, covering nickel, cobalt and lithium development, smelting and processing, ternary precursor and cathode-material manufacturing and recycling. In 2025, ternary cathode shipments exceeded 100,000 tonnes, up 108%; 9-series ultra-high-nickel market share exceeded 33%; premium cylindrical ternary market share exceeded 60%; and Indonesian nickel-intermediate capacity totaled approximately 245,000 metal tonnes per year, with more than 1.4 billion wet tonnes of Indonesian nickel resources secured. Downstream customers include LGES/LGC, CATL, EVE Energy, Samsung SDI, Tesla, Volkswagen and BMW. The top-five customer share was approximately 48.57% in 2025 versus 39.34% in 2024. However, the research note did not provide detailed financial data for other industry participants, preventing a comprehensive financial comparison. The ternary segment also faces competition from lithium iron phosphate, while processing fees remain under pressure from leading battery manufacturers.

7. Risk Factors

• Metal-price volatility: revenue and profit from nickel, cobalt, lithium and copper are significantly affected by metal prices. Raw-material procurement prices are set at a discount to market prices. Falling cobalt, nickel or lithium prices could compress resource-side profits and trigger inventory impairment. In 2Q2026, cobalt prices declined sequentially and RMB 306 million of inventory impairment was recognized.
• Overseas project operating risk: earnings growth depends on Indonesian nickel intermediates, DRC cobalt resources and Zimbabwe’s Arcadia lithium mine. The Indonesia Huafei project reduced production from May 2026, and overseas projects remain exposed to ramp-up, feedstock, logistics and local operating conditions.
• Finance-cost and foreign-exchange risk: 1H2026 finance costs increased 94.06% year on year to RMB 1.769 billion, while currency volatility caused exchange losses. The company is expanding overseas while maintaining relatively high leverage. Higher financing costs, adverse currency movements or increased capital expenditure could pressure profit and cash flow.
• External guarantees and contingent liabilities: as of August 31, 2026, total external guarantees provided by the company and its controlled subsidiaries reached RMB 101.078 billion, including RMB 3.612 billion for subsidiaries with debt-to-asset ratios above 70% and RMB 774 million for associates. The guarantees triggered special warnings for exceeding 50% of audited net assets and 100% of net assets.
• Competition from ternary materials: the company focuses on ternary precursors and cathodes, but the ternary route continues to face lithium-iron-phosphate competition. Downstream battery leaders also pressure processing fees, so shipment growth may not translate proportionately into higher gross margins or net profit.
• Customer concentration and order-execution risk: according to a single reposted company-wide figure, the top five customers represented approximately 48.57% of 2025 sales, up from 39.34% in 2024. Long-term agreements with EVE Energy and others do not constitute earnings commitments, and actual volumes remain uncertain.
• Project investment and R&D risk: the company continues to develop Indonesian nickel projects, Hungarian and Korean materials projects and lithium resources. 1H2026 R&D expenses rose 109.21% year on year to RMB 1.121 billion. Delays in construction, commissioning or capacity ramp-up could result in capital lock-up, higher expenses or impairment.
• Share pledges and repurchase execution: based on late-2025 data, the controlling shareholder had pledged approximately 48.09% of its holdings and the actual controller approximately 32.14%. The latest 2026 pledge data were unavailable. Under the 2026 repurchase plan, the maximum amount is RMB 1.0 billion, but cumulative repurchases by the end of August totaled only RMB 77.5541 million, leaving execution uncertainty.

8. Conclusion and Outlook

Huayou Cobalt’s medium- and long-term growth remains supported by its integrated resource–smelting–materials–recycling model. Indonesian nickel-intermediate capacity continues to expand, the Arcadia lithium mine and supporting lithium-sulfate project are progressing, Hungarian and Korean materials capacity is being developed, and high-nickel cathode materials have strong niche competitiveness. If resource self-sufficiency rises, overseas capacity ramps successfully and nickel, cobalt and lithium prices remain favorable, the company could expand earnings through shipment growth, product-mix upgrades and lower unit costs.

However, current performance is highly sensitive to metal prices and project operations. Attributable net profit rose 99.45% year on year in 1Q2026 but fell 30.76% in 2Q2026, indicating substantial earnings elasticity. Key items to monitor include the production stability of Indonesian projects such as Huafei, finance costs and foreign-exchange effects, impairment provisions and the actual execution of high-nickel ternary-material orders. Broker forecasts for 2026 attributable net profit range from approximately RMB 7.26 billion to RMB 10.4 billion, a wide spread that should not be treated as a unified market consensus.

From a market perspective, the share price is in a period of weakness. The September 11, 2026 closing price had fallen substantially from the 52-week high of RMB 82.17. On-bid volume exceeded off-bid volume, and major funds recorded net outflows, indicating continued short-term sensitivity to earnings volatility and financial risk. Future assessment should combine operating cash flow, leverage and guarantee scale, overseas-project progress, metal-price movements and the demand structure for ternary materials, rather than relying solely on a low PE or a single year of earnings growth.

Data Sources

• Huayou Cobalt (603799) 2025 Management Discussion and Analysis
• 603799 Huayou Cobalt
• Zhejiang Huayou Cobalt Co., Ltd. 2025 Annual Report Summary
• Huayou Cobalt (603799) Operating Summary
• Media Coverage: Huayou Cobalt
• Huayou Cobalt (603799) F10 Information
• 603799 Huayou Cobalt—Core Themes
• China Securities Journal—Zhejiang Huayou Cobalt
• Huayou Cobalt Core Themes
• Huayou Cobalt F10 Information
• Zhejiang Huayou Cobalt Co., Ltd. 603799
• Huayou Cobalt (sh603799)
• Huayou Cobalt Company Overview
• Announcement on Listing of Zhejiang Huayou Cobalt RMB Ordinary Shares
• Huayou Cobalt Securities Information
• Huayou Cobalt 2025 Annual Report Summary
• Huayou Cobalt 2026 Share Price
• Zhejiang Huayou Cobalt Technical Analysis
• Huayou Cobalt Shareholder Funds Flow
• Huayou Cobalt 2025 Annual Report
• Huayou Cobalt 2026 Interim Earnings
• Huayou Cobalt Repurchase Update
• External-Guarantee Progress Announcement
• Major Sales Contract Announcement
• 2025 Preliminary Earnings-Increase Announcement
• Huayou Cobalt 1Q2026 Report
• MarketWatch: 603799 Stock Price
• SSE:603799 Technical Analysis
• Huayou Cobalt Market Data

This report was automatically researched, compiled and generated by AI based on publicly available information. Information is current through the close of Friday, September 11, 2026. Certain technical-indicator snapshots are dated August 31 or September 4, 2026, and exact moving-average figures for September 11 were unavailable, so timing differences may exist. Specific figures should be checked against formal company announcements and authoritative data terminals. This report is provided solely for information and research reference and does not constitute investment advice. Investors should make independent judgments and bear their own investment risks.