Core Viewpoint - The company, Tengyuan Cobalt Industry, has raised a net amount of 5.204 billion yuan through its initial public offering, primarily aimed at expanding production capacity and upgrading technology for cobalt and nickel products [2]. Group 1: Fund Utilization - The raised funds are allocated for projects including the annual production of 20,000 tons of cobalt and 10,000 tons of nickel, along with the technological upgrade of related production facilities [2]. - Specific construction projects include production lines for cobalt (39,500 tons), copper (30,000 tons), nickel (60,000 tons), manganese (21,820 tons), and lithium carbonate (20,000 tons) [2]. Group 2: Current Production Capacity - As of now, the company has achieved a production capacity of 31,500 tons for cobalt, 10,000 tons for nickel, 10,000 tons for manganese, 5,000 tons for lithium carbonate, and 60,000 tons for copper [2]. - The project benefits are expected to gradually materialize as production capacity is realized, with the company planning to advance capacity expansion in an orderly manner based on resource supply, market conditions, and product demand [2].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 5.75 billion yuan for the first three quarters of 2025, representing an 18% year-on-year increase, and a net profit attributable to shareholders of 750 million yuan, up 22% year-on-year. In Q3 alone, revenue reached 2.22 billion yuan, a 32% year-on-year increase and a 7% quarter-on-quarter increase, with a net profit of 280 million yuan, marking a 48% year-on-year growth [4][5] - The company is expected to achieve net profits of 1.014 billion yuan, 1.373 billion yuan, and 1.672 billion yuan for 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 20, 15, and 12 [5] - The company is advancing its integrated layout, with the Democratic Republic of the Congo's quota policy expected to support rising cobalt prices. The company has established processing capabilities for cobalt salts, electrolytic cobalt, and electrolytic copper, and is extending its reach into downstream markets [8] Financial Summary - For 2025, the company is projected to have a revenue of 7.661 billion yuan, a year-on-year growth of 17.1%, and a net profit of 1.014 billion yuan, reflecting a 47.9% increase year-on-year. The gross margin is expected to be 25.8% [7] - The company’s return on equity (ROE) is projected to increase from 7.8% in 2024 to 10.3% in 2025, and further to 12.2% in 2026 [7] - The earnings per share (EPS) is expected to rise from 2.33 yuan in 2024 to 3.44 yuan in 2025, and reach 4.66 yuan in 2026 [7]

Core Insights - The long-term demand for nickel is widely recognized, but the efficient development of low-grade nickel laterite ores remains a bottleneck for the industry [1] - Companies that can overcome technical challenges and align with Indonesia's transformation from a resource exporter to an industrial hub will gain a competitive edge in the nickel industry [1] - Liqin Resources has seen its stock price increase by over 130% in the past year, significantly outperforming the market, due to its integration of Chinese technology and Indonesian resources [1] Industry Dynamics - The global nickel industry is undergoing a dual transformation characterized by "supply-demand dynamics" and "technological iteration" [2] - Nickel prices fell to a near-term low of 115,000 RMB/ton in April due to U.S. tariffs, but have since stabilized between 120,000 and 130,000 RMB/ton [2] - Major companies like Norilsk Nickel and Glencore announced production cuts, with Norilsk's nickel output down 4% and Glencore's down 7% year-on-year [2] - The stainless steel sector is recovering, with China's crude steel production up 5.17% year-on-year, while the demand for battery-grade nickel remains strong due to the high nickel content trend in batteries [2] Technological Innovation - Liqin Resources has adopted the third-generation HPAL hydrometallurgical process, which is one of the most advanced technologies for processing low-grade nickel laterite ores [3] - This technology has achieved a rapid production ramp-up record within two months and significantly improved nickel-cobalt recovery rates, positioning it among the lowest-cost nickel-cobalt production projects globally [3] - During the industry downturn, Liqin's low-cost advantage allowed it to gain market share as high-cost capacities were forced out [3] Strategic Positioning in Indonesia - Liqin Resources exemplifies the integration of Chinese technology with global resources, aligning with Indonesia's shift from resource exportation to deep processing [4] - Indonesia's nickel-related product exports are projected to reach $33.9 billion in 2024, marking a historic high and validating the country's industrial upgrade strategy [4] - The company operates HPAL and RKEF projects in collaboration with Indonesian partners, ensuring a "mine-to-metal" integration [5] Environmental and Social Responsibility - Liqin Resources emphasizes green development, with the first wet tailings demonstration facility in Indonesia set to enhance resource utilization and address environmental concerns [6] - This initiative aligns with Indonesia's industrial upgrade requirements and supports the "Belt and Road" green development initiative [6] Competitive Advantages - Liqin Resources has built a dual-base supply network in Indonesia and the Philippines, ensuring stable supply and mitigating regional supply fluctuations [7] - The company employs a "wet and dry" technology synergy, producing battery-grade nickel sulfate and nickel iron to cater to both the new energy and traditional industrial markets [7] - The integration of ESG principles into operations enhances long-term customer loyalty and positions the company favorably in a market with increasing ESG scrutiny [8] Conclusion - Liqin Resources' strong performance in the Hong Kong stock market is attributed to its established ecological moat and strategic positioning in the nickel industry [9] - The company's global procurement network, dual technology approach, and long-term customer contracts have transformed it into an ecological platform connecting global nickel resources with end-user demand [9] - The current nickel price fluctuations serve as a test of the company's competitive strength, with its cost advantages and technological innovations poised to capture market share and drive growth [10]

Group 1 - Jinchuan Nickel Cobalt has completed its IPO counseling with CITIC Securities and CICC as advisors, but has not disclosed financial data or the total fundraising amount yet [2] - The company, established in 2013, is the largest producer in China's nickel-cobalt industry, with a post-investment valuation close to 70 billion yuan after a recent capital increase [5] - In 2024, Jinchuan Nickel Cobalt reported revenues of 37.479 billion yuan and a net profit of 5.849 billion yuan, with a significant year-on-year decline in both revenue and profit [5][6] Group 2 - The revenue from nickel products for Jinchuan Group showed a decline from 32.673 billion yuan in 2022 to 6.456 billion yuan in Q1 2025, while cobalt product revenues also decreased significantly [6] - The overall nickel market is facing oversupply and slowing demand growth, leading to fluctuating nickel prices, although there is potential for recovery due to emerging industries [7] - The cobalt market is experiencing severe supply-demand imbalances, with significant price drops, and non-listed companies face greater performance pressures without capital market support [8]