GEM(SZ:002340) HTSC·2025-08-29 08:17Investment Rating - The report maintains an "Accumulate" rating for the company [6] Core Views - The company achieved revenue of 17.561 billion RMB in H1 2025, a year-on-year increase of 1.28%, with a net profit attributable to shareholders of 799 million RMB, up 13.91% year-on-year [1][4] - The company experienced a synergistic growth in multiple business lines, with significant increases in production and sales volumes across various products [2] - The report highlights the improvement in gross margins for key metal resource recycling and new energy battery materials [3] Summary by Sections Financial Performance - In Q2 2025, the company reported revenue of 8.065 billion RMB, a decrease of 10.23% year-on-year and 15.07% quarter-on-quarter, while net profit was 288 million RMB, an increase of 17.29% year-on-year but a decrease of 43.71% quarter-on-quarter [1] - The company’s nickel metal shipments from its Indonesian project reached 43,977 tons, a 112% increase year-on-year, and cobalt production was 3,667 tons, up 125% year-on-year [2] Profitability - The gross margins for nickel, cobalt, and tungsten recycling were 19.1%, 13.86%, and 7.22%, respectively, with cobalt showing a year-on-year increase of 3.09 percentage points [3] - The gross margins for new energy battery materials, including ternary precursors and cathode materials, showed mixed results, with ternary precursors at 14.14% and cathode materials at 9.07% [3] Earnings Forecast and Valuation - The report raises the company's net profit forecast for 2025-2027 to 1.599 billion RMB, 2.479 billion RMB, and 3.775 billion RMB, respectively, with corresponding EPS of 0.31, 0.48, and 0.74 RMB [4][10] - The target price is adjusted to 8.72 RMB, reflecting a price-to-book ratio of 2.16 for 2025 [4][6]