- Buy Entry – 135 Target – 160 Stop Loss – 125
- GANFENG LITHIUM CO., LTD. is a China-based company principally engaged in the research, development, production and sales of deeply processed lithium products. The Company’s main products include lithium compounds, lithium metal and lithium batteries. The Company’s products are mainly used in electrical vehicles, chemicals and pharmaceuticals. The Company distributes its products in the domestic market and to overseas markets.
- Lithium carbonate reached a new high. Lithium carbonate prices in China rose to RMB204,500/tonne as of 9th December. As holiday seasons (from Christmas to Chinese new year) draws near, production is expected to slow down as refinery plants will be gradually under the annual overhaul (7 to 30 days). However, EV companies accelerated to stock up lithium carbonate inventories before the holidays. The strong demand for raw materials for batteries will continue to push prices higher at least till 1Q22.
- Overseas expansion approved. Recently, the board approved the acquisition of 50% equity interest in Netherlands SPV Company by GFL International Co., Limited, a wholly-owned subsidiary of the Company at a price of US$130 million with its own funds. The exploitation licence of Goulamina Spodumene Mine Project will be transferred to Netherlands SPV company. Ganfeng is considering the 2nd phase expansion of the Goulamina Spodumene Mine Project. The production capacity of the project will increase by 75% from 2.3 million tons to 4 million tons per annum; the production capacity of spodumene concentrate will also increase accordingly, compared to about 450,000 tons per annum, placing Goulamina Spodumene Mine Project among the largest producers globally.
- Updated market consensus of the EPS growth in FY22/23 is 40.3%/21.4% YoY respectively, which translates to 31.0x/25.5x forward PE. Current PER is 49.2x. Bloomberg consensus average 12-month target price is HK$205.31.
Lithium carbonate prices