Investment Rating - The report maintains a "Strong Buy" rating for the industry, indicating a positive outlook for investment opportunities in the sector [2]. Core Insights - Indonesia's resource nationalism is intensifying, with the government tightening mining policies to increase fiscal revenue amid significant budget deficits. This includes controlling RKAB supply, adjusting HPM pricing formulas, and conducting antitrust investigations to establish a global pricing system based on Indonesian mineral costs [4][10]. - The depletion of high-grade nickel resources is prompting a policy shift towards protecting reserves. The government has stopped approving new RKEF projects and is expected to favor low-grade nickel resources, aligning with the needs of the new energy industry [4][10]. - A significant reduction in RKAB quotas is anticipated for 2026, with estimates suggesting a drop to 250-260 million tons from 379 million tons in 2025, potentially leading to a supply gap of 40-50 million wet tons [4][10]. - The HPM pricing formula may be revised, which could increase costs for wet processing projects significantly, thereby raising the global marginal cost line for nickel products [4][10]. - The report suggests monitoring the implementation of Indonesian policies and recommends focusing on companies such as Huayou Cobalt, Liqin Resources, and Zhongwei New Materials [4]. Summary by Sections 1. Progression of Resource Nationalism - The Indonesian government is tightening RKAB quotas, signaling a reduction to 250-260 million tons for 2026, a 34% decrease from 2025 [10]. - The government is enhancing scrutiny of monopolistic risks in the Morowali Industrial Park (IMIP) and may adjust the HPM pricing formula to include by-products like cobalt [10][10]. 2. Supply-Side Changes - The report highlights the shift in focus from high-grade nickel to low-grade nickel due to the depletion of high-grade resources, with a projected supply gap in 2026 [4][10]. - The anticipated changes in RKAB quotas and HPM pricing are expected to create a structural shift in the industry, impacting supply and pricing dynamics [4][10]. 3. Investment Recommendations - The report advises investors to keep an eye on the specific implementation of Indonesian policies and suggests companies that may benefit from these changes [4].

Core Viewpoint - The company is set to fully release its nickel resource capacity by 2025, with significant increases in output and profitability driven by advanced production techniques and cost optimization [1] Group 1: Nickel Resource Capacity and Production - By 2025, the company's nickel resource MHP shipments are expected to exceed 110,000 tons, representing a year-on-year increase of over 110% compared to 2024 [1] - From July 2025, the company will maintain full production at a capacity of 150,000 tons per year, with expectations to sustain this level into 2026 [1] Group 2: Competitive Advantages and Profitability - The company utilizes high-pressure acid leaching (HPAL) technology for producing nickel-cobalt hydroxide (MHP), which offers lower costs and reduced carbon emissions compared to traditional pyrometallurgical methods, while effectively processing low-grade nickel laterite ores [1] - In 2025, the company anticipates producing nearly 10,000 tons of cobalt metal from its nickel resource projects, significantly contributing to the global supply of cobalt products and enhancing the profitability of MHP products [1] - Continuous optimization of production costs has been achieved by replacing traditional precipitating agents with active magnesium oxide, which increases the nickel and cobalt content in MHP products and reduces the moisture content of filter cakes, leading to dual breakthroughs in cost reduction and efficiency [1]

Core Viewpoint - The company anticipates significant growth in nickel resource shipments, with a projected increase of over 110% in 2025 compared to 2024, driven by the full release of production capacity and operational efficiency improvements [2]. Group 1: Nickel Resource Production and Capacity - In 2025, the company expects to ship over 110,000 tons of nickel resources (including equity interests), marking a year-on-year increase of over 110% from 2024 [2]. - The company will maintain full production at its 150,000 tons per year nickel resource capacity starting from July 2025, with expectations to sustain this level into 2026 [2]. Group 2: Profitability and Cost Structure - The company's nickel resource projects are positioned at an industry-leading profitability level, utilizing high-pressure acid leaching (HPAL) technology, which offers lower costs and reduced carbon emissions compared to traditional pyrometallurgical methods [2]. - The company plans to produce nearly 10,000 tons of cobalt metal in 2025 (including equity interests), enhancing the profitability of its MHP products and meeting core global cobalt supply needs [2]. - Continuous optimization of production costs has been achieved by replacing traditional precipitating agents with active magnesium oxide, which increases nickel and cobalt content in MHP products and reduces moisture content in filter cakes, leading to dual breakthroughs in cost reduction and efficiency [2].

Investment Rating - The report maintains an investment rating of "Outperform the Market-A" for the industry [4] Core Insights - The report highlights that sulfur prices have been on the rise since the second half of 2024, reaching a significant high of 3950 CNY/ton as of November 25, 2025, indicating a structural change in both supply and demand dynamics [1][26] - The report emphasizes that sulfur is primarily a byproduct of the petroleum and natural gas industries, and its pricing is heavily influenced by global supply and demand rather than domestic factors [1][27] - The ongoing geopolitical tensions, particularly the impact of the Russia-Ukraine conflict, have severely affected sulfur supply, with Russian exports plummeting from 3.9 million tons in 2019 to just 1.04 million tons in 2024 [2][37] - The demand for sulfur is expected to surge due to the rapid expansion of lithium iron phosphate production in China, which is projected to exceed 360,000 tons in 2025, significantly increasing sulfur consumption [3][39] Summary by Sections 1. Sulfur as an Industrial Byproduct - Sulfur is a crucial industrial raw material, primarily used in the production of sulfuric acid, which is a key indicator of industrial development [13][18] - The majority of sulfur is produced as a byproduct of oil refining, with 70.62% from petroleum and 25.53% from natural gas [14] 2. Sulfur Price Review - Historical price trends show three major price surges in 2008, 2022, and 2025, driven by global supply disruptions and increased demand [24][25] - As of November 22, 2025, sulfur prices reached 3985 CNY/ton, reflecting a year-on-year increase of 152.22% [26] 3. Supply Dynamics - Global refining capacity is expected to decline, limiting sulfur supply growth, with significant impacts from the ongoing conflict in Ukraine affecting Russian production [32][37] - The report forecasts a supply gap of -30/-513/-405 million tons for sulfur from 2025 to 2027, indicating a tightening market [49] 4. Demand Drivers - The demand for sulfur is projected to increase significantly due to the growth of the lithium iron phosphate sector, which is expected to account for 8% of sulfur demand by 2025 [39][42] - Indonesia's MHP production is anticipated to add 658,000 tons of sulfur demand, further straining global supply [42] 5. Related Companies - The report suggests focusing on companies involved in sulfur production and recovery, such as Sinopec and PetroChina, which are expected to benefit from rising sulfur prices [9]

Core Viewpoint - Greeenme's adoption of a cost-effective wet process for producing nickel-cobalt hydroxide (MHP) in Indonesia is expected to enhance product quality and reduce costs through the use of active magnesium oxide as a substitute for traditional precipitating agents [1] Group 1 - The company has significantly improved the nickel and cobalt content in MHP products while reducing the moisture content of the filter cake [1] - The cost advantage of magnesium oxide is anticipated to further drive cost reduction and efficiency improvements [1] - The company's research and development investment for the first half of the year amounted to 752 million RMB [1]

Group 1 - The Democratic Republic of Congo (DRC) has extended its cobalt export ban until October 15, leading to a significant increase in cobalt prices, which have risen nearly 40% this year [1][2] - Cobalt prices have increased from $14 per pound at the beginning of the year to $19.5 per pound by September 24, indicating strong demand and supply constraints [2] - The DRC accounts for 76% of global cobalt production, and the extended export ban is expected to reduce cobalt supply by approximately 141,600 tons, nearly half of the global cobalt production in 2024 [1][2] Group 2 - Companies in the cobalt supply chain, such as Luoyang Molybdenum and Huayou Cobalt, have seen significant stock price increases, with Luoyang Molybdenum up 10.87% and Huayou Cobalt up 7.85% as of September 25 [1][2] - Huayou Cobalt reported a revenue of 650 million yuan from cobalt products in the first half of 2025, benefiting from rising cobalt prices [3] - Greenme's cobalt recycling capacity exceeds China's cobalt mining output by 350%, and its nickel-cobalt production in Indonesia has increased by 125% year-on-year, mitigating the impact of the DRC's export ban [3] Group 3 - Analysts predict that the tightening supply of cobalt will lead to a global supply gap exceeding 300,000 tons over the next three years, supporting further price increases [2] - The demand for cobalt is expected to rise due to the growing electric vehicle market and technological advancements in sectors like 5G and AI, which will further support cobalt prices [3][4] - Companies with strong resource reserves and production capabilities, particularly in Indonesia, are expected to gain a competitive advantage as the DRC's export quota system is implemented [4]

Core Viewpoint - Greenmei Co., Ltd. has submitted a listing application to the Hong Kong Stock Exchange, with JPMorgan, CITIC Securities, and CITIC Construction Investment International as joint sponsors. The company is already listed on the Shenzhen Stock Exchange [1]. Group 1: Company Overview - Greenmei is a leader in the recycling of critical metal resources and lithium-ion batteries, as well as a prominent player in the global new energy materials manufacturing industry. The company operates a comprehensive business model centered around a circular economy, focusing on three core areas: critical metal resources, lithium-ion battery and end-of-life vehicle recycling, and new energy materials [4]. - The company has established itself as a pioneer in the recovery of critical metal resources, including nickel, cobalt, tungsten, lithium, germanium, titanium, copper, manganese, gold, silver, and platinum. According to Frost & Sullivan, Greenmei ranks first in China for the recovery of nickel, cobalt, and tungsten resources based on projected recovery volumes for 2024 [4]. Group 2: Business Segments - In the lithium-ion battery and end-of-life vehicle recycling sector, Greenmei procures retired lithium-ion batteries from third parties and recycles batteries from scrapped electric vehicles (EVs). The company has established partnerships with over 1,000 automotive and battery manufacturers globally and has set up six lithium-ion battery recycling subsidiaries in China, all of which are included in the Ministry of Industry and Information Technology's whitelist. Greenmei ranks first in the domestic market for third-party retired lithium-ion battery recycling based on projected recovery volumes for 2024 [5]. - In the new energy materials sector, Greenmei supplies products such as ternary precursors and cathode materials for lithium-ion batteries, as well as cobalt oxide for 3C batteries. The company has established long-term stable partnerships with nine of the top ten lithium-ion battery manufacturers globally. Based on projected shipment volumes for 2024, Greenmei ranks second in the global supply of ternary precursors and cobalt oxide [6]. Group 3: Financial Performance - For the fiscal years ending December 31 and the six months ending June 30, the company reported revenues of 29.39 billion RMB, 30.53 billion RMB, 33.20 billion RMB, and 17.56 billion RMB for 2022, 2023, 2024, and the first half of 2025, respectively. The corresponding profits were approximately 1.33 billion RMB, 1.16 billion RMB, 1.33 billion RMB, and 842.77 million RMB [6][7].

Core Viewpoint - Greeenme's strategic expansion in Indonesia has led to significant growth in nickel resource production and sales, showcasing the company's successful implementation of innovative technologies in the green energy sector [2][5][8]. Group 1: Company Performance - In the first half of 2025, Greenme achieved a revenue of 17.561 billion yuan and a net profit of 799 million yuan, representing year-on-year growth of 1.28% and 13.91% respectively [5]. - The company's nickel metal output from its Indonesian projects reached 43,977 tons, a year-on-year increase of 112%, while cobalt production was 3,666.6 tons, up 125% [8]. Group 2: Technological Advancements - Greenme successfully overcame the technical challenges associated with extracting nickel from low-grade laterite ores using high-pressure acid leaching (HPAL) technology, establishing a unique technical and talent system [4][7]. - The company has developed a new nickel-cobalt precipitation agent that has reduced production costs by over 10% and improved the nickel-cobalt composite grade to 46% [7]. Group 3: Strategic Partnerships and Projects - Greenme has formed strategic alliances with local Indonesian companies, including the establishment of a joint venture with Indonesian miner Merdeka to produce new energy materials [6]. - The company is actively involved in the construction of the International Green Industrial Park (IGIP) in Indonesia, which aims to be a benchmark for green nickel manufacturing and support the global demand for green nickel [10][11]. Group 4: Industry Impact - Greenme's initiatives in Indonesia are seen as a model for sustainable development, contributing to the global transition towards green energy and enhancing the competitiveness of Indonesia's downstream nickel industry [10][11].

Financial Data and Key Metrics Changes - For the first half of 2025, adjusted EBITDA was US$159.3 million, slightly above the US$155.7 million recorded in 2024, with profit after tax increasing by 80% to US$25.5 million from US$14 million in 2024 [3][11][42] - Gross profit reached US$114.8 million, up 19%, and operating profit was US$98.7 million, up 12% [7] Business Line Data and Key Metrics Changes - The Hangzhou mine produced over 11.5 million wet metric tons, with adjusted EBITDA of US$70.3 million, a significant improvement compared to 2024 [4][16] - RKF operations saw lower EBITDA due to higher costs and ore shortages, despite an improving NPI price [8][12] - HPAL operations performed well, with production above 2024 levels and stable cash costs, resulting in EBITDA margins around US$5,900 per ton [14][15] Market Data and Key Metrics Changes - NPI prices increased from US$11,290 to US$11,350, while cash costs rose from US$9,716 to US$10,117 due to higher oil prices [13][12] - The combined EBITDA for HNC and Syncreation increased by 20% to 27.7% in 2025 [15] Company Strategy and Development Direction - The company is focused on responsible and sustainable mining, with initiatives like the Nickel Industries Foundation for social and economic development in Indonesia [2] - Development of the Sampala project is progressing well, with expectations to host over 1 billion wet metric tons [6] - The company aims to achieve gold status in responsible mining ratings and is working on increasing production capacity at the Hengjai mine [5][19] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite challenges in nickel prices, highlighting strong growth in the mining sector [42] - The company anticipates further growth with the imminent release of an RKB that requires no CapEx for increased mine sales [42] Other Important Information - The company has deferred payments for E and C totaling US$126.5 million to January and April, allowing for further production and EBITDA [11] - The cathode plant is expected to be commissioned in October or November, with all key equipment fabricated and erected [17][34] Q&A Session Summary Question: Update on debt refinancing and other levers - Management confirmed entering a commitment letter for a US$100 million loan facility to support working capital and is evaluating alternative debt funding options [22][23] Question: Dividend withdrawal reasoning - Management stated that the withdrawal of the dividend is a case of prudent balance sheet management [25] Question: Update on VAT refunds - Management expects the US$110 million VAT refunds within the next six to twelve months and is in dialogue with the Indonesian government [27][28] Question: Timing for environmental study approval - Management expects the RKB approval for the Penguja mine by September and for Sampala by the end of the year [29] Question: Factors for commissioning the cathode plant - Management decided to delay commissioning due to high working capital draw and costs associated with MHP, aiming for October or November [34][36]

Investment Rating - The report recommends the industry [4] Core Insights - The RKEF project produced 30,463 tons of nickel pig iron (NPI) in Q2 2025, a decrease of 5% year-on-year and 4% quarter-on-quarter, primarily due to adjustments made to the ONI furnace [1][2] - The unit cash cost for NPI increased by 4% year-on-year to $10,348 per ton, driven by maintenance costs and rising electricity expenses [2] - The sales revenue for NPI in Q2 2025 was $346 million, reflecting a 6% decrease year-on-year [2] RKEF Project Summary - NPI production in Q2 2025 was 30,463 tons, with a contract price of $11,449 per ton, showing a 1% increase from the previous quarter [1][2] - The adjusted EBITDA for NPI was $33.7 million, down 24% from the previous quarter, with an adjusted EBITDA per ton of $1,107, a decrease of 20% [2][12] HPAL Project Summary - The Huayue nickel-cobalt project produced 20,750 tons of nickel and 1,877 tons of cobalt in Q2 2025, exceeding the rated capacity by 38% [3] - The unit EBITDA for HNC was $4,819 per ton, up 12% quarter-on-quarter, supported by rising MHP prices [5] Mining Operations Summary - The Hengjaya mine produced 5.92 million wet tons of nickel ore in Q2 2025, a 99% increase year-on-year [7] - The adjusted EBITDA for the Hengjaya mine was $41.4 million, a 33% increase from the previous quarter, driven by rising nickel ore prices [7] Financial Overview - Nickel Industries received $34.4 million in shareholder loan repayments in Q2 2025 [10] - The company also received $8.1 million in dividends from the Oracle Nickel project and $8 million from the Hengjaya mine [10][11]