SMM4, March 16: Huayu Cobalt Industry disclosed that in the first quarter of 2020, it realized operating income of 4.424 billion yuan, an increase of 0.53% over the same period last year; realized net profit attributable to shareholders of listed companies of 183 million yuan, an increase of 1385.1% over the same period last year; and realized net profit attributable to shareholders of listed companies, net profit of deducting non-recurrent profit and loss was 132 million yuan, an increase of 693.42% over the same period last year.
Huayu Cobalt has previously said that the growth is mainly due to the company's high-end products, industrial integration of the implementation of the business strategy has achieved good results, with the relative stabilization of cobalt prices, promoted the rise in gross profit margin of cobalt products, at the same time, the gross profit margin and sales of copper products are also on the rise.
Huayu cobalt industry produced 28305 tons of cobalt metal products in 2019, an increase of 16.22% over the same period last year, 67695 tons of copper products, an increase of 84% over the same period last year, and 13164 tons of ternary precursor products, an increase of 2.6% over the same period last year.
The average price of MB cobalt fell by half in 2019 compared with 2018, resulting in a decline in Huayu Co's consolidated gross profit margin from 28.5 per cent in 2018 to 11.2 per cent in 2019. In addition, the company made provision for a drop in inventory price of 143 million yuan, and the gross profit margin of cobalt products fell from 34.7 per cent to 11.2 per cent. However, due to the sharp increase in production and sales of the company's copper products, revenue of copper products increased by 67% in 2019 from a year earlier, and gross profit margin increased by 9 percentage points to 32%.
Huayu cobalt industry believes that in terms of demand, the new energy vehicle industry will maintain rapid development. China has proposed to account for about 25% of the sales of new energy vehicles by 2025. Britain will ban the sale of fuel vehicles by five years to 2035. Germany has significantly increased subsidies for new energy vehicles, and the United States has also proposed a tax credit for buying cars. The global market share of new energy vehicles rose to 2.5% in 2019, up from 2.1%. With the rapid development of 5G industry, the demand for consumer electronics will reach the bottom. According to IDC, nearly 100m 5G intelligent terminals will be shipped in 2020, and by 2023, the annual shipment of 5G terminal products will exceed 400m units. The supply side of cobalt mine is less than expected, and the construction or shutdown of new construction, technical transformation and expansion of cobalt mine projects have also been delayed. The contraction of the supply side will have a certain supporting effect on the price.
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