GEM has reported 1H25 revenue of RMB17.56bn(yoy+1.28%),an attributable net profit(NP)of RMB799mn(yoy+13.91%),and an ex-nonrecurring NP of RMB709mn(yoy+0.92%).In 2Q25,revenue reached RMB8.07bn(yoy-10.23%,qoq-15.07%)and the attributable NP was RMB288mn(yoy+17.29%,qoq-43.71%).In 1H25,multi-business synergies supported production and sales volume growth against the industry trend,with profitability improving across several products;maintain OVERWEIGHT.



Multi-business synergy with volumes up against the trend

In 1H25,volumes increased across multiple product lines.Nickel and cobalt:shipments from the Indonesia nickel resource project reached 43.977kt of nickel metal(including equity-method capacity),up by 112%yoy;the project produced 3.67kt of cobalt(by-product),up by 125%yoy,effectively offsetting the six-month cobalt export ban in the DRC.New-energy materials:shipments of ternary precursor for EV batteries reached 86kt in 1H25,a firm position among the global top two;Co？O？shipments were 14.59kt,up by 39%yoy;cathode material shipments were 12.40kt,up by 74%yoy.Tungsten recycling:recycled tungsten resource(WC-equivalent)shipments were 4.03kt,up by 17%yoy.EV battery recycling:dismantled/recycled EV batteries totaled 22.4kt in 1H25,increasing by 37%yoy.



Profitability:GPMs improving across most products

On the profitability front,in key metal-resource recycling,the 1H25 GPMs were 19.1%/13.86%/7.22%for nickel resources/cobalt recycling/tungsten resources(yoy-1.09pp/+3.09pp/+1.06pp).In EV battery recycling,the comprehensive utilization of EV batteries/end-of-life vehicle recycling GPMs were 10.13%/3.11%(yoy+0.25pp/+0.03pp).In NEV battery materials,ternary precursor/cathode materials/Co？O？recorded GPMs of 14.14%/9.07%/12.40%,yoy changes of-1.38pp/+2.36pp/+2.21pp.



Earnings forecasts and valuation

We revise up our net profit estimates by 1.49%/2.39%/1.41%to RMB1.60/2.48/3.78bn for 2025/2026/2027,with EPS of RMB0.31/0.48/0.74;the upside revisions mainly reflects minor adjustments to our expense assumptions.With peers trading at an average of 1.97x 2025E PB on Wind consensus and given the company’s deployment across key minerals(e.g.,tungsten,cobalt),we assign 2.16x 2025E PB on our 2025E BPS forecast of RMB4.04.We raise our target price to RMB8.72(prior RMB6.86,1.70x 2025E PB).



Risks:downstream demand below our expectations;policy changes.