Having cultivated expertise in this field for many years, GEM Co., Ltd. (“GEM”, 002340.SZ) has been consistently expanding its presence in the circular economy. The Company has established an integrated circular economy operation model that covers three key businesses: critical metal resources, lithium-ion battery and end-of-life vehicle recycling, and new energy materials. In several niche material markets, GEM ranks among the global leaders. Recently, the Company submitted a listing application to the Hong Kong Stock Exchange, aiming to achieve dual listing on both A and H shares.

Three Key Businesses Form a Closed-loop Circular System, with Technology Enabling “Waste-to-Value”

GEM’s uniqueness lies in its full-chain closed-loop model built around the concept of a circular economy: “resource recovery — material remanufacturing — product application”. By organically integrating three key business modules of critical metal resources recycling, power batteries and end-of-life vehicles recycling, and new energy materials, the Company not only achieves efficient resource utilization but also significantly enhances the added value of products.

In terms of resource recovery, GEM leverages a global recycling network to carry out large-scale collection and dismantling of various resources, including waste-battery, end-of-life vehicles, and electronic waste. To date, the Company has formed partnerships with over 1,000 automotive companies and battery manufacturers worldwide, establishing a stable raw material recycling network and product sales channels. This not only ensures a steady supply of “Urban Mining” resources such as retired batteries and end-of-life vehicles, but also opens up vast market opportunities for new energy materials, positioning the Company as a central hub in the industry chain with risk-resilience significantly stronger than its peers.

In terms of material regeneration, GEM utilizes advanced processes to transform recycled resources into high-purity, high value-added intermediate products and new energy materials. As one of the early adopters of hydrometallurgical technology in the industry, the Company utilized this advanced technology to smelt limonite nickel ore, which could hardly be smelted through traditional pyrometallurgy. The process also enables the efficient smelting of other metal resources associated with laterite nickel ore, enhancing overall economic value while achieving recovery rates of up to 99% for nickel, cobalt, and tungsten. In terms of lithium-ion battery and end-of-life vehicle recycling, GEM has established a dual-track processing model of “cascade utilization + material regeneration”, achieving a recovery rate of 96.5% for lithium metal, significantly exceeding the industry average of 90%. More importantly, through technological innovation, GEM further processes recycled resources into high value-added critical new energy materials such as ternary precursors, cathode materials, and cobalt tetroxide, supplying to global battery manufacturers and vehicle OEMs. This truly achieves a complete closed loop process from recycling to application.

GEM’s three core businesses are mutually supportive and closely interconnected. The recycling of critical metals and power batteries jointly provides a stable metal supply for the production of new energy materials. Meanwhile, the materials business extends downstream, supplying to battery manufacturers and achieving value-added transformation. This turns green recycling into a profitable and sustainable industrial chain, creating a competitive barrier that is difficult for industry peers to replicate.

Leading in Multiple Segments and Seizing the Future Opportunities with a Global Expansion

Leveraging its technological barriers and industrial synergy advantages, GEM has established a globally leading position across multiple segments, emerging as a frontrunner in the new energy materials and resource recycling sector. According to Frost & Sullivan, GEM ranked first in China in the recycling of nickel, cobalt, tungsten resources in terms of recycling volume in 2024, as well as retired lithium-ion battery recycling volume from third parties. In the field of new energy materials, GEM was the second largest supplier of ternary precursors globally in terms of shipment volume in 2024, capturing a market share of 19.7%. At the same time, with a market share of 37.4%, it became the world’s largest supplier of high-nickel ternary precursors, with the shipment volume of its 8-series and 9-series high-nickel ternary precursor materials ranking first globally. In the cobalt tetroxide sector, the Company ranked second worldwide with a market share of 20.2%.

Looking ahead, GEM is embracing multiple market opportunities. The expansion of new energy applications is driving sustained growth in demand for critical new energy metals. According to Frost & Sullivan, from 2024 to 2030, nickel demand in China is expected to rise from 335.5 thousand tons in 2024 to 1,233.7 thousand tons in 2030, with the proportion of recycled nickel increasing from 17.2% to 31.1%; Demand for cobalt and tungsten in China will also grow in tandem, while the proportion of recycled cobalt and recycled tungsten will further increase. In addition, under the wave of retired power batteries, it is expected that by 2030, around 15% of the nickel, cobalt, and lithium required for new power batteries will come from recycling.

In the field of new energy materials, driven by emerging sectors such as EVs, 3C electronics, low-altitude aircrafts, and humanoid robots, market demand is expected to grow rapidly. In terms of shipment volume, from 2024 to 2030, the CAGR of lithium-ion battery cathode materials is expected to reach 24.2% while that of ternary precursors is projected at 21.6%. Among them, the penetration rate of high-nickel ternary precursors is expected to rise from 35.2% to 70.0%, and the shipment volume of cobalt tetroxide is expected to record a CAGR of 12.7%.

Confronting opportunities, GEM has formulated a clear development strategy. On the technology front, it plans to establish overseas R&D centers, increase R&D investment, and deepen the deployment of cutting-edge technologies in the field of new energy materials. On the capacity front, it will expand and upgrade existing production capacity, advance the expansion of its Indonesian base, and strengthen the “nickel resources — precursors — cathode materials” integrated nickel industrial chain. On the globalization front, it intends to set up marketing centers in Japan, South Korea, and Indonesia, enhance customer collaboration, and further expand its global business footprint.

GEM’s proposed listing in Hong Kong will provide GEM with broader access to capital and international markets, injecting stronger momentum into its dual growth engines of circular economy and new energy materials. Backed by robust technological barriers, a mature closed-loop model, and an expanding global footprint, the Company is well-positioned to maintain its leading edge in the circular economy sector and unlock greater growth flexibility.