Summary of the Conference Call for Hanrui Cobalt Industry Company Overview - **Company**: Hanrui Cobalt Industry - **Industry**: Cobalt and Copper Mining Key Points Business Operations and Capacity - **Indonesia Nickel Project**: A 20,000-ton high-ice nickel project is expected to start trial production in early April 2026, with a minimum output target of 10,000 metal tons and a profit margin of approximately $2,000 per ton [2][16] - **Congo Copper Operations**: The target for full production in Congo is set at 70,000 tons by 2026, with plans to add 50,000 tons of capacity. The company aims to increase the self-owned mine ratio to 60% and reduce raw material costs through heap leaching technology [2][3] - **Cobalt Business**: The company has not set an incremental target for cobalt due to slow quota execution but has secured approximately 3,000 tons of rights through agreements with local companies, covering about 45% of hydroxide cobalt production capacity [2][10] Cost and Profitability - **Congo Copper Smelting Costs**: The smelting cost has risen from $1,500 per ton to $1,800-$1,900 per ton due to power shortages and rising auxiliary material prices, reducing net profit per ton to around $700-$800 [2][5][6] - **Profit Margins**: The normal gross margin for Congo's electrolytic copper business is around 20%, with net margins in the low double digits. Current copper prices have dropped from $13,000 per ton to approximately $12,000 per ton, impacting gross profit by $200 per ton [5][6] Power Supply Solutions - **Power Shortages**: The main challenge in Congo is the power shortage, with companies increasing diesel generator usage, raising operational costs. The company has deployed a "photovoltaic + energy storage" microgrid system to cover 40% of its electricity needs [4][9] - **Future Plans**: The company plans to enhance the photovoltaic system and optimize energy storage to better match production electricity curves [9] Expansion Plans - **New Copper Capacity**: The company plans to add 50,000 tons of copper capacity, focusing on new sites near mines to reduce transportation costs and utilize lower-grade ores economically [7][8] - **Project Timeline**: The new copper project is in the feasibility study phase, with a target start in 2026, contingent on overseas investment approval [8] Cobalt Supply and Market Dynamics - **Cobalt Quota Solutions**: The company has signed agreements with three local companies for cobalt quotas, expecting to secure around 3,000 to 3,200 tons of cobalt production, which would cover about 30% of its hydroxide cobalt capacity [10][11] - **Cobalt Powder Market**: The gross margin for cobalt powder production is around 20%, with current prices allowing for a profit of approximately $8,900 per ton [12] Capital Expenditure and Financing - **Future Capital Expenditure**: The company plans to focus capital expenditures on the second phase of the Indonesia nickel project ($800-$900 million) and the Congo copper project ($150-$200 million), with financing through overseas investments and project cash flow [2][20] Hedging Strategies - **Hedging Approach**: The company employs a complete hedging strategy to lock in risks without speculative operations, particularly for copper, while the nickel hedging strategy is still under development [21] Additional Insights - **Geopolitical Impact**: Recent geopolitical factors have led to price increases for sulfur and diesel, significantly impacting copper smelting costs [4] - **Raw Material Supply**: The company is working on securing raw materials for its nickel project through long-term agreements and local mining partnerships [18] This summary encapsulates the key insights from the conference call, highlighting the company's operational strategies, financial outlook, and market dynamics in the cobalt and copper industries.

Group 1: Military Industry New Materials - The price of electrolytic cobalt has increased to 436,000 CNY/ton, with a week-on-week change of +3.1%. The price ratio of electrolytic cobalt to cobalt powder is 0.76, also up by +3.1% [4] - Carbon fiber price remains stable at 83.8 CNY/kg, with a gross profit of -9.19 CNY/kg [4] Group 2: New Energy Vehicle Materials - The prices of lithium carbonate and lithium hydroxide are 171,900 CNY/ton and 162,600 CNY/ton, reflecting week-on-week increases of +19.6% and +12.4% respectively [5] - Sulfuric cobalt price is stable at 95,300 CNY/ton [5] - The prices of lithium iron phosphate and 523-type cathode materials are 52,400 CNY/ton and 193,800 CNY/ton, with week-on-week changes of +0% and +3.4% respectively [5] - The price of praseodymium-neodymium oxide is 890.57 CNY/kg, up by +4.8% [5] Group 3: Photovoltaic New Materials - The price of photovoltaic-grade polysilicon is 6.16 USD/kg, showing a week-on-week decrease of -0.5% [6] - EVA price remains unchanged at 9,650 CNY/ton, at a low level since 2013 [6] - The price of 3.2mm photovoltaic glass coating is stable at 24.0 CNY/sqm [6] Group 4: Nuclear Power New Materials - Prices for zirconium-related materials such as oxychloride zirconium and sponge zirconium remain stable, while uranium price is 69.71 USD/lb, reflecting a week-on-week increase of +9.8% [7] Group 5: Consumer Electronics New Materials - The price of cobalt oxide is stable at 363,000 CNY/ton, while lithium cobalt oxide is priced at 402.0 CNY/kg [8] - Silicon carbide price remains unchanged at 5,600.00 CNY/ton [8] - The prices for high-purity gallium, crude indium, and refined indium are 1,950.00 CNY/kg, 4,650.00 CNY/kg, and 4,750.00 CNY/kg, with week-on-week increases of +1.6%, +9.4%, and +9.2% respectively [9] Group 6: Other Materials - The prices of platinum, rhodium, and iridium are 609.00 CNY/g, 2,900.00 CNY/g, and 1,855.00 CNY/g, with week-on-week changes of +17.1%, +4.5%, and +0% respectively [10]

Market Overview - The Shanghai Composite Index closed at 4139.53, down 0.17%, while the Shenzhen Component Index fell by 0.68% to 14405.76 [1] - The ChiNext Index decreased by 0.52% to 1833.62, and the CSI 300 Index dropped by 0.71% to 4693.19 [1] - The overall performance of the A-share market showed a mixed trend with some indices declining and others slightly increasing [1] Sector Performance - The computing power leasing sector experienced a collective surge, with companies like Huasheng Tiancai (600410) achieving three consecutive daily limits, and others like Tuowei Information (002261) and Litong Electronics (603629) also hitting daily limits [2] - The tungsten mining sector strengthened, with Zhangyuan Tungsten (002378) achieving five limits in seven days, and Xiamen Tungsten (600549) showing significant gains [2] - The electric power sector performed strongly, with Ganneng Co. (000899), Yunnan Energy (001896), and Huayin Power (600744) all hitting rapid daily limits [4] Price Movements - Zhangyuan Tungsten raised its long-term procurement prices for February 2026, amid a global tungsten supply-demand imbalance that has led to a significant price increase [3] - Tungsten powder prices reached 1800 RMB/kg, marking a 41.7% increase within a month [3] - The price of rare earth metals, specifically praseodymium and neodymium, rose to 1.08 million RMB/ton, with neodymium oxide prices increasing to 882,500 RMB/ton [4] Hong Kong Market - The Hang Seng Index and Hang Seng Tech Index opened higher, with tech stocks like Kingsoft Cloud rising over 9% [5] - AI application stocks in Hong Kong saw significant gains, with SenseTime and Huya Technology both increasing by over 6% [5]

Group 1 - The tungsten index has experienced a significant surge, with companies like Zhangyuan Tungsten and Xianglu Tungsten seeing substantial stock price increases, including Zhangyuan Tungsten achieving five consecutive trading limits in seven days [1] - Zhangyuan Tungsten has raised its long-term procurement prices for February 2026, with 55% black tungsten concentrate priced at 730,000 yuan per standard ton, and 55% white tungsten concentrate at 729,000 yuan per standard ton, reflecting an increase from the previous month [2] - The price of tungsten powder has skyrocketed nearly fivefold over the past year, reaching 1,800 yuan per kilogram, with a month-on-month increase of approximately 41.7% [3] Group 2 - The global tungsten supply and demand imbalance has intensified since 2025, driven by policy controls and surging demand, leading to record-high prices for tungsten powder, cobalt powder, and tungsten carbide powder [3] - Companies such as Zhongtung High-tech, Xiamen Tungsten, Zhangyuan Tungsten, and Jiaxin International Resources are identified as relevant players benefiting from the rising prices in the tungsten market [3]

Core Viewpoint - The company, Huarui Precision, emphasizes its strategic management of key raw materials and its long-term relationships with suppliers to ensure stable production and pricing [2]. Group 1: Raw Material Management - The main raw materials for the company include tungsten carbide powder, hard alloy bars, cobalt powder, and tantalum-niobium solid solution [2]. - The procurement department implements unified management for raw material procurement based on production plans and market conditions to maintain reasonable inventory levels [2]. - The company determines procurement prices through inquiries and comparisons with qualified suppliers, considering quality, price, and delivery time before placing orders [2]. Group 2: Supplier Relationships - The company has established long-term and stable cooperative relationships with suppliers of key raw materials such as tungsten carbide powder, hard alloy bars, cobalt powder, and tantalum-niobium solid solution [2].

Core Viewpoint - The stock price of Hanrui Cobalt (300618) has risen alongside the cobalt concept sector, primarily driven by tightening nickel supply from Indonesia, benefits from the company's projects in Indonesia, and the effects of industry chain linkage [1] Stock Performance - On February 11, 2026, Hanrui Cobalt's stock price increased as part of the cobalt concept sector, which rose by 2.51% on that day [2] Industry Policy and Environment - The Indonesian Ministry of Energy and Mineral Resources confirmed a significant reduction in nickel ore production quotas for 2026 to 260-270 million tons, down approximately 34% from 379 million tons in 2025. The quota for the world's largest nickel mine, Weda Bay Nickel, dropped sharply from 42 million tons to 12 million tons, leading to a continuous rise in nickel prices on the London Metal Exchange, with an intraday increase of 2.6% on February 11. The strengthening nickel prices provide cost support and performance improvement expectations for Hanrui Cobalt, which is positioned in the nickel resource sector [3] Company Project Progress - Hanrui Cobalt is constructing a "20,000 tons/year high-nickel matte project" in Indonesia, scheduled to commence production by the end of March 2026. This project utilizes a high-oxygen side-blowing process, with expected electrolytic nickel costs below $13,000 per ton. In the context of tightening supply in Indonesia, the low-cost capacity is anticipated to directly benefit from the profit expansion brought about by rising nickel prices [4] Industry Chain Status - Hanrui Cobalt's main business includes cobalt powder and electrolytic copper, but the company is entering the nickel industry chain through its Indonesian project, forming a diversified layout of "cobalt-copper-nickel." The rise in nickel prices typically resonates with cobalt prices, and the company's integrated industry chain can mitigate risks associated with fluctuations in individual metal prices. In Q3 2025, the company's revenue increased by 16.49% year-on-year, and the commissioning of the Indonesian project will further strengthen its position in the supply chain for new energy materials [5] Capital Movement - On February 11, the cobalt concept sector saw a net inflow of 4.507 billion yuan, reflecting market recognition of the tightening metal supply logic. Although Hanrui Cobalt experienced a net outflow of 64.08 million yuan on February 5, the new policies from Indonesia have shifted overall sentiment in the sector positively, driving individual stocks to rise [6]

Core Viewpoint - The company emphasizes its strategic management of key raw materials, ensuring stable supply and quality through long-term relationships with suppliers [1] Group 1: Raw Material Management - The main raw materials for the company include tungsten carbide powder, hard alloy bars, cobalt powder, and tantalum-niobium solid solution [1] - The procurement department implements unified management for raw material procurement based on production plans and market conditions to maintain reasonable inventory levels [1] - The company determines procurement prices through inquiries and comparisons with qualified suppliers, considering quality, price, and delivery time before placing orders [1] Group 2: Supplier Relationships - The company has established long-term and stable partnerships with suppliers of key raw materials such as tungsten carbide powder, hard alloy bars, cobalt powder, and tantalum-niobium solid solution [1]

Company Overview - Nanjing Canray New Materials Co., Ltd. is located at 527 Jiangjun Avenue, Jiangning District, Nanjing, Jiangsu Province, and was established on May 12, 1997. The company was listed on March 6, 2017. [1] - The main business involves the research, production, and sales of metal cobalt powder and other cobalt products, as well as copper products. The revenue composition is as follows: copper products 58.62%, cobalt products 40.46%, and others 0.92%. [1] Stock Performance - On February 5, Canray's stock fell by 5%, trading at 44.45 CNY per share, with a transaction volume of 340 million CNY and a turnover rate of 2.75%. The total market capitalization is 13.766 billion CNY. [1] Shareholder Information - Among the top ten circulating shareholders, a fund under Southern Fund holds a position in Canray. The Southern CSI 1000 ETF (512100) reduced its holdings by 15,700 shares in the third quarter, now holding 1.9719 million shares, which accounts for 0.73% of the circulating shares. [2] - The estimated floating loss for the Southern CSI 1000 ETF today is approximately 4.6143 million CNY. [2] - The Southern CSI 1000 ETF was established on September 29, 2016, with a latest scale of 78.996 billion CNY. Year-to-date returns are 8.01%, ranking 1412 out of 5566 in its category; the one-year return is 42.19%, ranking 1736 out of 4285; and since inception, the return is 23.52%. [2] - The fund manager of the Southern CSI 1000 ETF is Cui Lei, who has been in the position for 7 years and 92 days, managing total assets of 137.02 billion CNY. The best fund return during the tenure is 279.97%, while the worst is -15.93%. [2]

Summary of Conference Call Notes Industry Overview - The tungsten and cobalt prices have been on a continuous rise since 2025, positively impacting the prices of hard alloy-related products [1][2] - The price of tungsten powder has increased from a low range of 300-400 RMB/KG to a range of 1400-1500 RMB/KG, while cobalt powder has risen from 150-200 RMB/KG to 500-600 RMB/KG [1] Key Insights - Raw material costs account for approximately 40-50% of the total cost of hard alloys, with tungsten powder, cobalt powder, and tantalum-niobium solid solution making up about 90% of direct material costs [1] - The increase in hard alloy prices has led to significant price hikes in core products such as CNC blades, hard alloy products (e.g., mining alloy teeth), and rock drilling tools, resulting in a supply-demand imbalance for high-end production capacity [2] Investment Recommendations - The investment suggestion highlights key companies in the tool sector: - **Xinxin Co.** - **Oke Yi** - **Huarui Precision** - In the PCB drill needle sector, recommended companies include: - **Dingtai High-Tech** - **Zhongtung High-Tech** [3] Risk Factors - Potential risks include slower-than-expected recovery in the manufacturing sector and lower-than-expected manufacturing exports [3]

Group 1 - The A-share small metal sector showed strength, with the sector index rising by 3.59% as of the morning close on January 9, 2023, driven by significant price increases in tungsten and other rare metals [1] - Notable stocks in the sector included Yunnan Zhenye, Dongfang Tantalum, and Xiamen Tungsten, which reached their daily limit up, while other companies like Jinchuan Group and Huaxi Nonferrous also saw gains [1] - Tungsten prices have reached historical highs, with black tungsten concentrate priced at 485,000 yuan/ton, ammonium paratungstate (APT) at 710,000 yuan/ton, and tungsten powder at 1,130 yuan/kg, reflecting week-on-week increases of 5.4%, 6.0%, and 6.5% respectively [1] Group 2 - Analysts indicate that the tungsten market is supported by supply constraints due to lower ore grades, controlled mining volumes, and sellers' reluctance to sell, alongside a growing global demand for strategic resources [2] - The cobalt market is experiencing price increases due to export quota controls in the Democratic Republic of Congo and delays in domestic arrivals, with cobalt powder prices rising to 570 yuan/kg, a week-on-week increase of 10.7% [2] - The rare earth industry is witnessing price increases, with the rare earth industry index rising by 2.96% on January 9, driven by supply constraints, favorable macroeconomic conditions, and increasing downstream demand [2] Group 3 - The global rare earth industry is undergoing a transformation, with domestic supply consolidation and increased industry concentration, while overseas mines are actively developing, indicating a trend towards diversified global supply [3] - Demand for rare earths is stable in traditional sectors like electric vehicles and wind power, while emerging fields such as robotics and low-altitude economy are expected to provide long-term support for demand [3] - The supply-demand imbalance for strategic minor metals is tightening due to limited reserves, high extraction difficulty, and rapid growth in downstream demand from sectors like new energy and semiconductors [3]