HUAYOU COBALT(603799) 光大证券·2025-04-21 03:15Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The company achieved a revenue of 60.95 billion yuan in 2024, a decrease of 8% year-on-year, while the net profit attributable to shareholders increased by 24% to 4.15 billion yuan [1] - Nickel products accounted for 52% of the company's gross profit in 2024, with a significant increase in nickel product shipments by 46% year-on-year [2][3] - The company is expected to see stable growth in performance as nickel production capacity gradually releases, with net profit forecasts for 2025 and 2026 at 4.96 billion yuan and 5.98 billion yuan respectively [4] Summary by Sections Financial Performance - In Q1 2025, the company reported a revenue of 17.84 billion yuan, a 19% increase year-on-year, and a net profit of 1.25 billion yuan, up 139.7% [1] - The company’s nickel product shipments reached 184,000 tons in 2024, driven by the ramp-up of the nickel wet smelting project in Indonesia [2] - The company’s lithium battery materials saw a decrease in shipments due to a strategic shift to reduce low-margin products [2] Nickel Sector - The company has increased its nickel resource reserves through investments in Indonesian mines and has successfully ramped up production from its nickel wet smelting projects [3] - The total shipment of nickel intermediates reached nearly 230,000 tons, a 50% increase year-on-year [3] Lithium Battery Materials - The company has established a presence in Indonesia with projects for nickel sulfate and ternary precursors, with significant production milestones achieved [3] - The company is also collaborating with LG in South Korea and progressing with a cathode material project in Hungary [3] Profitability and Valuation - The company’s net profit is projected to grow at a compound annual growth rate (CAGR) of approximately 19.4% from 2025 to 2027, with a current price-to-earnings (P/E) ratio of 11 for 2025 [4][17] - The report highlights an expected improvement in gross margin, with projections indicating a gross margin of 17.2% by 2026 [19]