Key Takeaways:
Huayou Cobalt (603799.SS) reported record 2025 net profit of 6.11 billion CNY, a 47.07% year-on-year jump, as rebounding cobalt prices and strong electric vehicle battery demand boosted its performance.
The results, disclosed in the company's annual report, represent the best performance since the company was listed.
Full-year revenue increased 32.94% to 81.02 billion CNY. Net profit excluding non-recurring items rose 52.64% to 5.79 billion CNY, showing strong underlying profitability. The company's asset-liability ratio improved to 61.85% from 64.38% a year earlier.
The earnings show Huayou's direct benefit from a reversal in the cobalt market, which shifted from a surplus to a supply deficit in 2025. The company's focus on high-nickel ternary materials for EVs positions it to capture further growth from premium automakers.
The rebound in cobalt was a core catalyst. According to the International Cobalt Association, global effective cobalt supply fell to approximately 120,000 tons in 2025 due to export controls in key producing nations, while demand grew 4.4% to 214,000 tons. This supply-demand imbalance drove prices higher, directly benefiting Huayou's resource development business in Africa.
In the lithium battery materials market, Huayou's strategic focus on ternary precursors paid off. While lower-cost lithium iron phosphate (LFP) materials saw faster volume growth, ternary materials maintained dominance in the high-performance market. Huayou supplies ternary precursor products to major automotive supply chains, including Tesla, BMW, and Ford.
The company's nickel business faced headwinds from a global supply surplus that kept prices in a low range for most of the year. In the lithium carbonate market, prices executed a V-shaped recovery in the second half of the year as demand from the energy storage sector accelerated, improving market fundamentals.
The strong performance highlights the company's successful vertical integration strategy, from upstream resource mining to downstream material production. Investors will watch for the impact of Indonesia's nickel quota policies and the pace of solid-state battery development, which could further increase demand for high-energy-density ternary materials.
This article is for informational purposes only and does not constitute investment advice.
