HUAYOU COBALT(SH:603799) Huachuang Securities·2026-01-11 10:44Investment Rating - The report maintains a "Buy" rating for the non-ferrous metals sector, highlighting the initiation of a spring rally with significant price increases in metals [2]. Core Views - The spring rally is believed to have started, with aluminum prices showing strong elasticity. As of January 9, the SHFE aluminum closing price was 24,385 CNY/ton, a 6.4% increase from December 31, 2025. The report anticipates that aluminum prices may rise further due to rigid supply constraints and increasing demand in new sectors [3][4]. - The report emphasizes the positive outlook for the electrolytic aluminum sector, predicting average profits to exceed 7,500 CNY/ton, supported by improved cash flow and stable profitability among companies [4]. - A strike at the Mantoverde copper mine in Chile could impact copper production, potentially exacerbating supply tightness in 2026 [5]. Summary by Sections Industrial Metals - Aluminum Market: The report notes a significant increase in aluminum prices and a rise in profits, driven by supply constraints and new demand areas. The global aluminum inventory remains low, providing strong support for prices [3]. - Copper Market: The report highlights a rise in copper inventories and recommends several companies in the copper sector, including Zijin Mining and Western Mining [6]. New Energy Metals and Minor Metals - Cobalt Market: The report indicates that cobalt exports from the Democratic Republic of Congo are delayed, leading to a potential price increase. The average price of electrolytic cobalt rose to 460,000 CNY/ton, a 1.1% increase from December 31, 2025 [7][12]. - Company Performance: Huayou Cobalt's 2025 earnings forecast exceeds market expectations, with a projected net profit increase of 40.8% to 55.2% year-on-year [14]. Industry Data - Market Performance: The non-ferrous metals sector has shown strong absolute and relative performance over the past year, with a 110.2% increase over 12 months [9]. - Stock Market Data: The total market capitalization of the sector is approximately 457.86 billion CNY, with 126 listed companies [8].