[Huayou Cobalt] A leading integrated lithium-ion battery company with a market cap in the hundreds of billions of RMB: its Q1 net profit doubled, yet its stock price halved! Can being the industry’s undisputed No. 1 really not justify a P/E ratio of just 10x?

Indonesia’s new regulations impose separate taxes on cobalt and manganese co-produced with nickel ore. Huayou can absorb these added costs through its vertically integrated closed-loop system: all associated metals are supplied internally to its precursor factories and are not sold externally—thus avoiding double taxation. The newly levied taxes are converted into internal raw material costs rather than passed on to external customers. Moreover, Huayou Cobalt is actively partnering with Indonesian state-owned enterprises—including ANTAM (a major state-owned mining conglomerate), the national battery platform IBC, and EVE Energy—to jointly establish an industrial park. The total investment stands at $6 billion, covering the full industrial chain. Huayou holds a 70% stake in the materials segment, while Indonesian state capital holds equity in the mining and battery segments. This joint venture has secured dedicated nickel mining quotas and enjoys 10–15 years of corporate income tax exemptions and green-channel export approvals—effectively circumventing Indonesia’s export controls. Indonesia bans the export of raw materials and instead encourages local production of high-value-added materials. Huayou moved early to localize capacity: its Weda Bay facility hosts Indonesia’s first overseas high-nickel ternary precursor production line. It produces nickel-cobalt-manganese hydroxide mixtures in-house and directly converts them into precursors—consuming semi-finished goods locally and eliminating the need to export large volumes of crude nickel intermediates. Nevertheless, the company cannot fully insulate itself from Indonesia’s policy impacts. The Huafei HPAL project at Weda Bay voluntarily reduced operating capacity by half starting May 2026. High-cost externally sourced ore production lines were fully shut down; only lines fed by Huayou’s own supporting mines continue operating at full capacity. During this shutdown window, technical upgrades were carried out—including reductions in sulfuric acid and energy consumption per unit output, and optimization of HPAL leaching recovery rates—to offset a $300-per-ton cost increase triggered by the upward adjustment of ore taxation. Even so, industry experts estimate that Huayou’s nickel production cost per ton will rise by approximately $1,700–$3,000. Consequently, it is highly likely that the company’s Q2 performance will fail to sustain the robust growth seen in Q1. In Q1 2026, the company delivered truly outstanding results: quarterly revenue reached RMB 25.8 billion, up nearly 45% year-on-year; attributable net profit hit RMB 2.5 billion, nearly doubling year-on-year—a new quarterly profit record for the company and significantly exceeding market expectations. Yet despite this stellar performance, the stock price continued falling relentlessly—from RMB 80 down to RMB 40. The Q1 2026 growth drivers were exceptionally clear: prices of core metals—nickel, cobalt, and lithium—rose sharply during the quarter, becoming the primary source of profit growth. Specifically, MB standard-grade cobalt prices rose 119% year-on-year, and average lithium carbonate prices surged 104% year-on-year. However, for the 2026 interim report, some claim—based on a recent earnings call—that the company’s profits may fall short of RMB 4 billion. Whether this figure is accurate remains unconfirmed; definitive clarity awaits the official interim earnings preview or full report. In fact, Huayou Cobalt is far more than just a mining company. It is a lithium-ion battery materials giant spanning the entire value chain—from upstream cobalt/nickel/lithium resource extraction, through midstream metal refining and ternary precursor production, all the way to ternary cathode materials. It ranks among China’s most comprehensively integrated lithium-ion battery materials enterprises. As of end-2025, the company’s core products cover metal resources including cobalt, nickel, copper, and lithium, as well as key lithium battery materials such as ternary precursors and ternary cathodes. Its downstream customers include all major global power battery manufacturers and leading automakers.

Lithium battery listed companies earned RMB 4.2 billion!

In the first half of the year, global new energy vehicle sales rose 35% year-on-year; China’s lithium battery installation volume exceeded 300 GWh, up 42% year-on-year; and China’s new energy storage installations grew 120% year-on-year. Policy support and improved economics have accelerated the rapid expansion of energy storage demand. China’s top-tier battery manufacturers achieved an overall capacity utilization rate above 80% for the first time since 2022, with some manufacturers’ premium production lines running at full capacity. Meanwhile, domestic lithium battery industry capital expenditures turned positive year-on-year in H1, rising 31.72%. Leading firms—including CATL and EVE Energy—are accelerating capacity expansions. In Q2 2025, the lithium battery industry’s full value chain saw revenue grow 11% year-on-year and attributable net profit surge 30.49% year-on-year. Profitability improved significantly across all segments—from upstream cathode materials to downstream battery manufacturing—validating both the authenticity and sustainability of demand. As a dual leader in cobalt and nickel, Huayou Cobalt benefits substantially from the broader industry’s demand recovery. First, cobalt—being a core material for power batteries—is riding the wave of sustained global NEV market expansion. Since the Democratic Republic of Congo (DRC), the world’s largest cobalt supplier, lifted its cobalt export ban and shifted to an export quota system, cobalt prices have risen markedly. As of October 17, domestic metallic cobalt prices ranged between RMB 367,000 and RMB 390,000 per ton, reflecting an overall supply shortage in the cobalt market. As a globally leading cobalt producer, Huayou Cobalt—leveraging its early-established mine assets in the DRC—stands to gain significant incremental earnings from this cobalt price upcycle. The company secures stable, low-cost cobalt supply from its own mines and maintains a robust procurement system, ensuring a distinct raw material supply advantage. Continuous technological innovation further lowers its production costs. In addition to its DRC cobalt sources, Huayou’s Indonesian nickel hydrometallurgical projects also yield cobalt as a by-product. Cobalt products are expected to continue delivering stable revenue and gross profit over the coming years, serving as a critical pillar of the company’s financial performance. Second, regarding nickel and lithium mining operations: the company has launched multiple nickel hydrometallurgical projects in Indonesia—including Huayue, Huafei, and Huake—with combined annual production capacity of approximately 245,000 tons (metal content) of nickel intermediates. The Pomalaa hydrometallurgical project—producing 120,000 tons of nickel metal annually—is scheduled to commence operations by end-2026; the Sorowako hydrometallurgical project—producing 60,000 tons of nickel metal annually—is slated for 2027. Upon completion, total hydrometallurgical capacity will double to 360,000 tons. A 50,000-ton annual sulfuric acid lithium project is expected to be completed by end-2025, enabling integrated mining and smelting—from spodumene concentrate to lithium salts—and further reducing lithium salt production costs. Third, concerning cathode materials: the first phase of Huayou’s Hungarian cathode materials plant—25,000 tons annually—is expected to be completed in 2025; the first phase of its 50,000-ton ternary precursor project in Indonesia (Huaneng) has already begun mass deliveries. Going forward, the company will further expand overseas production capacity to increase its global market share.

International Battery Metals Ltd. Reports Fourth Quarter and Full Year Fiscal 2026 Financial Results

Jun 17, 2026

International Battery Metals Ltd. reported fiscal 2026 financial results alongside significant advancements in its Direct Lithium Extraction technology, achieving 98% lithium recovery. The company is actively pursuing commercial agreements to deploy its modular DLE plants globally.

ACCESS Newswire

2026-04-08

Albemarle Corp. Stock Rises Wednesday, Still Underperforms Market

2026-04-09

UBS Group Issues Positive Forecast for Albemarle (NYSE:ALB) Stock Price

2026-04-13

Stanley Laman Group Ltd. Sells 7,590 Shares of Albemarle Corporation $ALB

2026-04-16

Greenwood Capital Associates LLC Sells 7,626 Shares of Albemarle Corporation $ALB

2026-04-18

Albemarle Corp. Hits Day High with 16.31% Surge in Stock Price