LIANYOU METALS (7610) 2026Q1 法說會簡報

Disclaimer

This briefing and related information released concurrently are based on information currently available to the Company from various sources. Some information may be subject to future uncertainties, resulting in risks and uncertainties, and causing discrepancies between expected and actual conditions. The Company assumes no responsibility for updating or correcting any changes or adjustments to the actual situation if it differs significantly from the Company's current forward-looking statements regarding future prospects. The Company makes no express or implied representations or warranties, and the accuracy, fairness, or completeness of the information presented or contained herein should not be relied upon.

Company Overview

• Company Name: 聯友金屬 (LIANYOU METALS)
• Full Company Name: 聯友金屬科技股份有限公司 (LIANYOU METALS CO.,LTD)
• Founded on: 29th of May, 2018
• Stock Code: 7610
• Paid-in Capital: About 15.4 Million USD
• Chairman and CEO: Simon Wu
• Total Employees as of April 2026: 165
• Business Scope: Recycling of tungsten alloys into raw materials for the tungsten and cobalt supply chain.
• Mission Statement: 以堅實技術承載循環經濟,用創新思維重塑金屬價值,奠定永續未來的基石。(Leveraging solid technology to embrace the circular economy, reshaping metal value with innovative thinking, and laying the foundation for a sustainable future.)
• Presenter: David Yen, VP Business

Products & Technologies

Core Technology: Advanced Tungsten-Cobalt Refining Technology

• Tungsten Refining Process:
  • Input Materials: Secondary cemented carbide, Grinding scrap carbide
  • Existing Products: Sodium Tungstate
  • Future Upgrades (Products): Ammonium paratungstate > Tungsten oxide > Tungsten powder > Tungsten carbide
• Cobalt Refining Process:
  • Input Materials: Secondary cemented carbide
  • Process: Extraction and purification
  • Products: Battery-grade cobalt sulfate solution > Refined cobalt carbonate > Cobalt powder

Product Names & Technical Concepts

• Tungsten Products:
  • Sodium Tungstate (鎢酸鈉)
  • Ammonium Paratungstate (APT)
  • Tungsten Oxide (WO3)
  • Tungsten Powder
  • Tungsten Carbide
  • Tungsten Carbide Powder
  • Ferrotungsten
  • Tungsten wire (W-Wire)
  • Tungsten hexafluoride (WF6)
• Cobalt Products:
  • Cobalt Carbonate (碳酸鈷)
  • Cobalt Oxide (氧化鈷)
  • Sodium Tungstate (鎢酸鈉)
  • Cobalt Powder (鈷粉)
  • Cobalt(II) sulfate Solution (硫酸鈷液)
  • Battery-grade Cobalt Sulfate Solution
  • Refined Cobalt Carbonate
• Industry Terminology:
  • Circular Economy (循環經濟)
  • Toll Conversion
  • Buy-and-Sell Model
  • Dual-price system
  • Defense Industry Base Alliance (DIBC)

Innovative Business Models

• Dual-track business model: Core pricing engine and dual-track operation of 6-10% cobalt metal.
• Profit Calculation: International market price - Core cost
  • International market price: Subject to uncontrollable external fluctuations.
  • Core cost: Influenced by source of raw materials and core processing capabilities.
• Strategic Approach: A dual-track approach maximizes commercial value: "toll conversion" secures stable, low-risk margins, while a "buy-and-sell" model drives peak revenue and profit.
  • When raw material prices rise sharply and processing fees account for a smaller percentage of raw material value, customers are more willing to outsource material to Lianyou for toll conversion.
• Toll Conversion Model:
  • Income Source: Toll Conversion Revenue, Metal Recovery Yield (6-10% cobalt metal)
  • Pros: High gross margin and no price fluctuation risk.
  • Cons: Low absolute gross profit and low revenue contribution.
• Direct Sales Model:
  • Income Source: Buy-sell Price Spread (6-10% cobalt metal)
  • Pros: High revenue contribution and high absolute gross profit.
  • Cons: Low gross profit margin and exposure to price fluctuation risks.

Business Segments

Tungsten Business

• Upstream (Mining/Recycling): Tungsten Mines, Lianyou Metals (Recycling)
• Midstream (Smelting): Sodium Tungstate, Ammonium paratungstate, Tungsten Oxides, Tungsten Powder, Tungsten Carbide Powder, Ferrotungsten, Others, Cobalt Compounds.
• Downstream (Applications):
  • Mining tools (26% of Mining applications)
  • Hardmetals (14% of Industrial, 25% of Transportation applications)
  • Projectiles (11% of Defense applications)
  • Renewables, Battery, Oil/Gas, Fusion, Shielding (7% of Energy, Medical applications)
  • PCB tools (8% of Consumer Electronics applications)
  • Targets, WF6, Catalysts (9% of Semiconductors, Chemicals applications)
• Recycling and refining is a key component of the supply chain.

Cobalt Business

• Applications: Battery / Chemical / Process Manufacturing, EV Battery, Portable Devices, Catalyst, Pigments.
• Key Products: Battery-grade cobalt sulfate solution, Refined cobalt carbonate, Cobalt powder.

Clients & Markets

Tungsten Market Overview

• Tungsten Facts:
  • Melting Point: Highest melting point of any metal at 3422°C
  • Hardness: Hardest metal in existence (7.5 on Mohs hardness scale)
  • Density: 19.254 g/cm³, similar to Gold
  • Demand 2024: 117,000 metric tons
• China's Dominance:
  • 50% of global tungsten reserves.
  • 80% of global tungsten production.
  • Controls 80% of global midstream tungsten smelting and processing capacity.
• Global Tungsten Industry Overview (2024 Data):
  • Primary (concentrate) production: 71,000 t
  • Secondary (scrap) input: 37,500 t (8,500 t new scrap, 29,000 t old scrap)
  • Recycling input rate: 35%
  • Intermediates production (APT, AMT, WO3, W, WC, FeW): 108,500 t
  • Material in use: 98,000 t (+/- 2,000 t)
  • End-of-life recycling rate: 30%
  • Loss (production): 2,000 t
  • Loss (dissipation, dilution, discard): 67,000 t
• Tungsten End-Use 2025 (Total 119 kt):
  • Mining & Construction: 26%
  • Transport: 24%
  • Industrial Use: 14%
  • Defence: 12%
  • Chemical / Petrochemical: 8%
  • Consumer Durables: 8%
  • Energy: 7%
  • Medical & Pharmaceutical: 1%
• Tungsten Growth Contributors, Total Growth +2%:
  • Defence: +10%
  • Energy: +10%
  • Medical & Pharmaceutical: +3%
  • Mining & Construction: +3%
  • Industrial Use: +2%
  • Consumer Durables: +1%
  • Transport: -2%
  • Chemical / Petrochemical: -5%

Cobalt Market Overview

• Total market: 237 kt (2024)
• End-Use Distribution:
  • EV: 43%
  • Portable devices: 30%
  • Superalloys: 8%
  • Other: 9%
  • Cemented carbide: 4%
  • Catalyst: 3%
  • Ceramic pigments: 3%
• Supply Chain Risks:
  • DR Congo accounts for roughly 70% of global cobalt mining.
  • China controls 70% of the global Cobalt processing and refining.

Outlook & Strategy

Long-term Vision and Goals (Next Three to Five Years)

• 2025 (High-value cobalt products):
  • Battery-grade Cobalt Sulfate Solution
  • Refined Cobalt Carbonate
  • Cobalt Oxide
  • Cobalt Powder
  • Milestones: Capital threshold, Technical threshold, Product certification
• 2027 (In progress):
  • Ammonium Paratungstate (APT)
  • Tungsten Oxide
  • Tungsten Powder
  • Tungsten Carbide
• 2030 (Taiwan Metal Recycling Cluster):
  • Product expansion to alloys and sputtering targets.

Strategic Initiatives and Plans

• Securing Supply Chain: Leveraging recycling and carbon-reduction focus for a strong market advantage.
• Diversification: Capitalizing on China's tungsten export curbs by offering non-Chinese supply chain solutions.
• Cost Efficiency: Benefiting from US tariffs exclusion on tungsten and cobalt, and China's non-refundable VAT, which squeeze Chinese competitors' margins.
• Local Advantage: Utilizing Taiwan's industrial and semiconductor sectors to anchor increasing tungsten demand and a steady recycling supply.
• Dual-track business model: Maximizing commercial value through "toll conversion" for stable, low-risk margins and "buy-and-sell" for peak revenue and profit.

Competitive Advantages

• ESG and Carbon Credits: Lianyou Metals leverages its recycling and carbon-reduction focus for a strong market advantage.
• Non-China Supply Chain: China's tungsten export curbs force global manufacturers to diversify supply chains outside China.
• China's Export Controls: Effective February 4, 2025, China's tungsten export controls directly target the Western defense and semiconductor supply chains.
• Cost Advantage: China's non-refundable 13% VAT and US 25% import tariffs squeeze profit margins on Chinese tungsten products.
• US Tariffs Exclusion: US tariffs exclude tungsten and cobalt from additional duties.
  • US imposes tariffs on Chinese tungsten products (25% for all listed): APT, Tungsten oxide, Tungsten carbide, Tungsten powder, Tungsten bars, Tungsten filament, Mixture, Tungsten scrap, Cemented carbide, Alloy rods.
• China's Tighter Environmental Regulations: China's strict environmental controls have raised mining costs and capped total tungsten output.
• Stable Supply and Demand in Taiwan: Taiwan's industrial and semiconductor sectors anchor increasing tungsten demand and a steady recycling supply for the near future.

Financial Highlights

Quarterly Financial Performance (Last 5 Quarters)

Annual & YTD Financial Performance (Last 3 Years and Q1 2026)

Product Mix (Revenue Breakdown by Product Category)

Sodium Tungstate Shipment Volume Breakdown

Additional Data

Tungsten Supply Chain Crisis & Scarcity Concerns

• APT (Ammonium paratungstate) price trend: Sharp price increase, prices doubled within a year (2025/1 to 2026/5).
• Chinese Export Controls:
  • February 2025: Implementation of Chinese Export Controls.
  • November 2025: China reduces export of tungsten to Japan.
  • January 2026: China cuts all exports of dual-use tungsten goods to Japan.
• Impact on Production:
  • Japan, a major producer of 25% of global WF6, is cutting production due to tungsten shortages.
  • April 2026: Fuji Precision warned that tungsten shortages threaten 30% of its revenue, signaling significant downstream manufacturing risks and production cuts.
  • Supply remains tight, as tungsten was not discussed during two Trump-Xi meetings in 2025 and 2026.
• Chinese Mining Trends:
  • Despite a 3.45% increase in China's 2026 mining quota, domestic concentrate production dropped 17% early this year and is projected to fall 10% annually.
  • Stricter Chinese environmental standards have raised mining and smelting costs.
  • China's average tungsten ore grade fell 33% over two decades (0.42% in 2004 to 0.28% in 2024).
• Global Challenges:
  • High costs and low production rates plague non-PRC mines; new mining developments in Korea, Kazakhstan, and Australia remain too slow to offset China's production cuts.
  • Shortage of 8,000-10,000 tons of tungsten oxide (WO3) on the international market.
  • Most non-PRC tungsten group companies fail to meet own demand for APT and WO3 due to lack of raw materials, except for Berkshire Hathaway-owned IMC Group.

Tungsten Demand Growth Drivers

• Rapid growth in critical sectors:
  • Tungsten wire usage in silicon PV cutting rose from 40% to 82%.
  • Tungsten in Lithium-ion battery cathodes reached 1,500 tons, a 22% year-on-year increase.
  • Tungsten is rapidly expanding into wind, hydrogen, catalysis, and aerospace applications.
  • The AI boom is driving increased demand for PCB tools, WF6 and tungsten targets in the semiconductor industry.
• High-end manufacturing and defense sector drive growth:
  • Nuclear fusion development is driving demand for high-performance tungsten alloys (estimated at >10,000 tons).
  • U.S. calls for increased defense spending are boosting global tungsten demand.
• Global strategic reserves:
  • The U.S., EU, Japan, and South Korea have all classified tungsten as a critical mineral, incorporating it into their strategic reserves to ensure supply security.
  • China's export controls and geopolitical tensions have triggered a "stockpiling effect".

U.S. Defense Procurement Decoupling from Chinese Tungsten

• DFARS 252.225-7052: Restriction on the Acquisition of Certain Magnets, Tantalum, and Tungsten Effective Date 2025/11/10.
• Defense procurement ban: To take effect on January 1, 2027 (Restrictions on sourcing from China, Russia, Iran, and North Korea).
• Dual Pricing System: Forced to build non-Chinese supply chains, the military industry has elevated the strategic value of alternative tungsten suppliers, creating a "dual-price system" in Western markets (Premium pricing for Non-Chinese security supply chain prices vs. Benchmark pricing for China supply chain prices).
• US Strategy for Non-Chinese Supply Chains:
  • Local mines: Subsidies for production within the United States.
  • Overseas mine resources: Strategic investments in third-party countries such as Kazakhstan.
  • DIBC (Defense Industry Base Alliance) & US government funding: To establish independent recycling and smelting capabilities.
  • Allied Cooperation: Alliance to build a non-Chinese supply chain system.

Cobalt Supply Status

• DR Congo cobalt export restrictions:
  • Banned exports starting February 2025.
  • Replaced by an export quota system in October 2025.
  • The DRC quota will wipe out 44% to 46% of global cobalt supply, cutting 104,000–110,000 metric tons from a market that required 237,000 metric tons in 2024.
• Cobalt standard grade, in-whs Rotterdam price trend: Sharp price increase, prices doubled within a year (202405 to 202604).