Huayou Cobalt's 2025 performance hits a historic high, driven by a rebound in cobalt prices and resonant growth from new energy demand | Financial Report Insights

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Huayou Cobalt delivered its most outstanding annual report since its establishment in 2025. Driven by the rapid global growth in new energy vehicle sales, a strong rebound in cobalt prices, and the company's integrated industrial chain synergy, both revenue and profit recorded significant growth, and profitability continued to strengthen.

In 2025, Huayou Cobalt achieved operating revenue of 81.019 billion yuan, a year-on-year increase of 32.94%; net profit attributable to shareholders was 6.11 billion yuan, a year-on-year increase of 47.07%, and net profit excluding non-recurring gains and losses was 5.793 billion yuan, a year-on-year increase of 52.64%. It intends to distribute a cash dividend of 5.00 yuan (tax included) for every 10 shares to all shareholders.

The core driving force for this performance leap comes from a structural reversal in the cobalt market. The implementation of export control policies in major cobalt-producing countries such as the Democratic Republic of the Congo has led to a sharp decline in effective global supply. The supply and demand situation has swiftly reversed from a structural surplus to a supply shortage, and cobalt prices have surged accordingly.

At the same time, global new energy vehicle sales increased by 29.1% year-on-year to 23.542 million units, and lithium-ion battery shipments increased by 47.6% to 2,280.5 GWh, providing solid volume and price support for the company’s core lithium battery material business.

Strong Rebound in Cobalt Prices Becomes Key Profit Catalyst

The sudden change in the structure of the cobalt industry is one of the most significant external variables in this reporting period.

Impacted by export controls in major supplier countries, effective global cobalt supply in 2025 is about 120,000 tons, a sharp decrease from the previous year, while global cobalt demand is about 214,000 tons, up 4.4% year-on-year. The supply-demand pattern rapidly shifted from structural surplus to tight supply, sending cobalt prices into a strong, supply-driven upward cycle.

According to USGS data, cobalt mine production in the Democratic Republic of the Congo accounts for about 75% of the global total, and the highly concentrated supply structure has significantly amplified the impact of export control policies. Huayou Cobalt has deeply invested in cobalt and copper resource development in Africa, and its self-owned mining supply system has directly supported the company in benefiting from this round of cobalt price rebound.

Looking ahead, the company believes that with the development of technologies such as AI, 6G, and the Internet of Things, the power demand of single smart devices will increase sharply, which is expected to drive the consumer electronics market into a new round of growth; the commercial application of new technologies such as large cylindrical batteries and solid-state batteries will also further push batteries toward higher energy density iterations, driving the cobalt market into a new round of simultaneous growth in volume and price.

Core New Energy Lithium Battery Business Remains Highly Prosperous

The rapid expansion of the new energy vehicle and lithium battery industry chains has provided strong fundamental support for the company’s core business.

According to EVTank data, global new energy vehicle sales in 2025 reached 23.542 million units, a year-on-year increase of 29.1%, with 16.545 million units sold in China, a year-on-year increase of 29.5%; global lithium-ion battery shipments reached 2,280.5 GWh, a year-on-year increase of 47.6%, with 1,888.6 GWh shipped by China, a year-on-year increase of 55.5%.

However, the cathode materials market shows obvious structural differentiation.

According to ICC XINLUO lithium battery data, in 2025, global lithium iron phosphate production was 3.938 million tons, a year-on-year increase of 63.0%; ternary material production was 1.033 million tons, a year-on-year increase of 7.4%. Lithium iron phosphate, with its cost advantage, dominates the energy storage and mid-to-low-end vehicle markets, while ternary materials maintain a leading position in the high-end market due to their high energy density and low-temperature performance.

Huayou Cobalt’s ternary precursor products have entered the high-end electric vehicle industry chain on a large scale, including Tesla, Volkswagen, BMW, Hyundai, Stellantis, GM, Ford, etc., and has signed a supply framework agreement with Tesla.

The company believes that the accelerated industrialization of large cylindrical batteries and solid-state batteries, as well as the rapid development of emerging scenarios such as embodied intelligence, drones, and low-altitude economy, will open up broader growth space for ternary cathode materials.

Nickel Industry Under Pressure, Lithium Prices V-Shaped Rebound

In terms of nickel, global nickel supply in 2025 was 3.81 million tons, demand was 3.6 million tons, and the supply-demand mismatch caused nickel prices to fluctuate mainly at the bottom range throughout the year, with a substantial rebound at the end of the year driven by expectations of Indonesia’s RKAB quota policy tightening.

Indonesia’s highly concentrated nickel mine production pattern has made its quota policy trends a key variable affecting the global nickel supply-demand balance.

For lithium, according to Mysteel data, global lithium carbonate supply in 2025 was about 1.78 million tons, demand was about 1.678 million tons, with a surplus of about 103,000 tons. The surplus pressure was concentrated in the first half of the year, resulting in a V-shaped price trend for the whole year.

In the second half of the year, a rapid release of storage demand significantly boosted lithium carbonate demand, and the supply-demand pattern improved significantly. The company believes that the "power battery + energy storage" dual-engine will provide long-term support for lithium carbonate demand.

Integrated Layout Strengthens Profit Resilience, Cash Flow Under Pressure

Huayou Cobalt has built a full-chain integrated industry ecosystem covering nickel-cobalt-lithium resource development, green smelting and processing, ternary precursor and cathode material manufacturing, and resource recycling. The internal synergy effect provides strong buffering for profits amid large fluctuations in multi-metal prices.

From quarterly data, the company’s profits increased quarter by quarter. Fourth-quarter net profit attributable to shareholders hit 1.894 billion yuan, the highest among all quarters, up about 51% from 1.252 billion yuan in the first quarter, reflecting the resonance of cobalt price surge and recovery in new energy demand in the second half of the year.

However, net cash flows from operating activities were 4.012 billion yuan, down 67.73% year-on-year, hitting the lowest level in the past three years, showing the company faces some working capital pressure during its rapid expansion phase.

In terms of financial indicators, the asset-liability ratio fell from 64.38% in 2024 to 61.85%, and the interest coverage ratio rose sharply from 2.91 to 4.28, reflecting an improved debt structure. The company currently has several outstanding sci-tech innovation bonds with a total balance of over 5 billion yuan, which will mature gradually from 2026 to 2027.

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