Key takeaway

In 2025, the company's net profit attributable to shareholders of the parent company was RMB1.567bn, +7% YoY. In 1Q26, net profit attributable to shareholders of the parent company was RMB0.555bn, +81% YoY and +22% QoQ. In 2025, sales volume of the company’s product series (ternary/phosphorus-based/cobalt-based/sodium-based) exceeded 420,000 tons, +38% YoY. In 2025Q4, benefiting from the peak season of lithium battery demand and rapid growth in production and sales of iron phosphate, shipment volume showed strong YoY and QoQ performance. Ternary precursors have ranked first globally in sales for six consecutive years, consolidating the company’s leading position. Meanwhile, shipments of phosphorus-based and sodium-based products grew rapidly. The iron phosphate business turned losses into profit in 25Q4. Sodium battery cathode materials also began to ramp up as lithium prices increased. As nickel prices rise, the company’s future nickel earnings are promising.

Event

The company released its 2025 annual report and 1Q26 report.

In 2025, the company recorded revenue of RMB48.14bn, +20% YoY, and net profit attributable to shareholders of the parent company of RMB1.567bn, +7% YoY. Net profit excluding non-recurring items was RMB1.449bn, +13% YoY.

Among them, in 2025Q4 the company recorded revenue of RMB14.842bn, +48% YoY and +24% QoQ. Net profit attributable to shareholders of the parent company was RMB0.455bn, +217% YoY and +20% QoQ. Net profit excluding non-recurring items was RMB0.425bn, +204% YoY and +14% QoQ.

In 1Q26, the company recorded revenue of RMB15.750bn, +46% YoY and +6% QoQ. Net profit attributable to shareholders of the parent company was RMB0.555bn, +81% YoY and +22% QoQ. Net profit excluding non-recurring items was RMB0.518bn, +97% YoY and +22% QoQ.

Quick Take

In 2025, sales volume of the company’s product series

(ternary/phosphorus-based/cobalt-based/sodium-based) exceeded 420,000 tons, +38% YoY.It is estimated that in 2025Q4 sales volume of all product series reached 125,000 tons, +40% YoY and +15% QoQ. In 25Q4, benefiting from the peak season of lithium battery demand and the rapid growth in production and sales of iron phosphate, shipment volume delivered strong YoY and QoQ performance. By product:

1) Ternary precursors: Shipments of ternary precursors are expected to reach 210–220k tons in 2025, +10% YoY. Domestic customers will contribute the core increment, while overseas customers will account for more than 60%. Shipments of ternary precursors in 1Q26 are expected to exceed 70k tons, +10% QoQ. The company’s ternary precursors have ranked first globally in sales for six consecutive years, reinforcing its solid leading position.

2) Cobalt series: Shipments of cobalt tetroxide are expected to be around 36k tons in 2025, +25% YoY. Benefiting from breakthroughs in high-voltage cobalt tetroxide technology, both shipments and market share will reach new highs. Shipments of cobalt tetroxide in 1Q26 are expected to approach 10k tons, basically flat QoQ. Ternary precursors and cobalt tetroxide benefited from export tax rebate cuts, leading to accelerated shipments and a less pronounced off-season.

3) Phosphorus series: The company has built production capacity of 200k tons of iron phosphate and 50k tons of lithium iron phosphate. It is also accelerating the development of the Kaiyang Xinchang phosphate mine, which holds about 98.44mn tons of proprietary resources, gradually improving the industrial ecosystem closed loop of “mine, chemical, and materials” in the phosphorus material chain. Shipments of iron phosphate are expected to reach 160–170k tons in 2025, more than doubling YoY. Shipments in 1Q26 are expected at 40–50k tons, -10% QoQ with a slight decline due to the off-season. Overall, the company will continue to rank first in market share in the external sales market.

4) Sodium series: Shipments of sodium materials are expected to exceed 1,000 tons in 2025. Sodium battery shipments in 1Q26 are expected to reach 700 tons, continuing to increase QoQ. Lithium price movements have accelerated the development of the sodium battery industry.

The company’s profitability remains stable, and nickel earnings begin to materialize in 1Q26. On a net profit basis, the operating profit per ton of ternary precursors and cobalt tetroxide is expected to remain stable at above RMB6000/ton, while iron phosphate has already turned profitable.

Regarding nickel, the company has firmly secured supply of more than 600mn wet tons of laterite nickel ore resources through equity participation, long-term agreements, and other forms. It has formed smelting capacity of about 200k tons of nickel metal from laterite nickel ore. The nickel products produced are used not only for internal supply of the company’s nickel-based materials but can also be flexibly sold externally as intermediate products or further processed into high-purity nickel plates depending on market conditions, taking the lead in achieving an ecological closed loop. The company’s nickel smelting output is expected to reach 160k tons in 2025, with attributable volume of around 100k tons. Attributable nickel smelting volume in 1Q26 is expected to exceed 20k tons. Nickel prices rose to around USD17000/ton in 1Q26, and the nickel segment has begun to contribute earnings.

Forecast net profit attributable to shareholders of the parent company for 2026–2028 at RMB3.01bn, RMB3.85bn, and RMB4.57bn, corresponding to PE of 18.6x, 14.6x, and 12.3x.

Risks

1) Lower-than-expected production and sales of downstream new energy vehicles: Lower-than-expected sales due to impacts like sluggish demand; lower-than-expected production due to sharp fluctuations in upstream raw material prices, power cuts, etc., which will further affect the shipment and profitability the company's related business.

2) The raw material prices may rise faster than expected: Since 2021, the prices of raw materials have shown high periodical volatility. The high upstream prices, combined with its volatility will affect terminal demand, and disrupt companies' performance in the short run.

3) Slower-than-expected progress of the company's key projects: For the company as a participant in the new energy sector, the progress of major projects is the key to supporting the revenue and profits, and is also a reflection of the company's growth potential. The slower-than-expected progress of major projects will affect its current and long-term performance.