Investment Rating - The report suggests a cautious subscription for Zhongwei Co., Ltd. (2579.HK) [1] Core Insights - The company is a leader in the global market for nickel and cobalt pCAM used in lithium-ion batteries, with market shares of 20.3% and 28.0% respectively in 2024 [2] - The demand for the company's products is driven by applications in electric vehicles, energy storage systems, and consumer electronics, which have significant commercial potential [2] - The global nickel pCAM shipment is expected to grow to 3,103.7 thousand tons by 2030, with a compound annual growth rate (CAGR) of 21.6% from 2024 to 2030 [3] - The company's revenue for 2022, 2023, and 2024 is projected to be RMB 30,343.7 million, RMB 34,273.2 million, and RMB 40,222.9 million respectively, with net profits of RMB 1,539.4 million, RMB 2,100.5 million, and RMB 1,787.8 million [3] Summary by Sections IPO Details - The IPO price range is set at HKD 34 to HKD 37.8, with a total fundraising amount of HKD 3.6279 billion [1] - The total number of shares available for subscription is 10,422.54 million, with 90% allocated for international placement and 10% for public offering [1] Market Position - The company has maintained its position as the top supplier of nickel and cobalt pCAM for five consecutive years since 2020 [2] - The current IPO pricing reflects a significant discount compared to the A-share closing price, providing a safety margin for investors [4] - The estimated PE ratio for 2024 is approximately 23 times, indicating a moderate position within the industry [4] Industry Outlook - The industry for new energy batteries is in a growth phase, with substantial long-term growth potential [4] - The demand for cobalt pCAM is expected to accelerate, with shipments projected to reach 209.8 thousand tons by 2030, reflecting a CAGR of 12.7% from 2024 to 2030 [3]

Financial Performance & Projections - The Pre-Feasibility Study (PFS) shows a Net Present Value (NPV) of $5.5 billion [9], while the Initial Assessment (IA) indicates an NPV of $18.1 billion [9] - The PFS estimates a 27% Internal Rate of Return (IRR), and the IA projects a 36% IRR [47, 63] - The PFS anticipates steady-state production of 11 million wet tonnes of nodules per annum from 2031 to 2043 [47] - The PFS projects an EBITDA margin of 43% during steady-state production years, translating to $254 per dry tonne of nodules [56] - The company estimates C1 cash costs of $1,065 per tonne of nickel, including byproduct credits, placing it in the 1st quartile of the nickel cost curve [54] Resource & Production - The PFS focuses on the NORI-D area, with probable reserves of 51 million tonnes [10] and a total resource of 352 million tonnes [47] - The IA covers the TOML and NORI areas (excluding NORI-D), estimating a resource of 1,276 million tonnes [63] - The company anticipates first production in Q4 2027 [15] - The combined PFS and IA cover an estimated resource of 1.6 billion tonnes of nodules [65] Strategic Investments & Partnerships - Korea Zinc made a strategic equity investment of $85.2 million in exchange for 19.6 million common shares at $4.34 per share [25] - The company has a pro forma cash balance of $120.7 million as of June 30, 2025, and total liquidity of $165 million including borrowing capacity [72]