- RE-ITERATE Buy Entry – 100 Target – 115 Stop Loss – 93
- 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.
- A large lithium mining project commenced operation. The company and its subsidiary Litio Minera Argentina kicked off this week the construction phase of their Mariana lithium project, located in Argentina’s northwestern Salta province. Based on a feasibility study completed in 2019, the Mariana project has a measured and indicated resource of 4,410,000 tonnes of lithium carbonate equivalent and an inferred resource of 786,000 tonnes of LCE. Once fully operational, total production should reach 20,000 tons of lithium chloride per year.
- Stellar 1Q22 results. Operating income jumped by 233.9% YoY to RMB5.4bn. Net profit attributable to shareholders of the listed company jumped by 640.4% YoY to RMB3.5bn. Net profit attributable to shareholders of the listed company after deduction of non-recurring gains and losses jumped by 956.4% YoY to RMB3.1bn.
- Lithium carbonate prices remained at high levels. Lithium carbonate prices in China were at 486,500 yuan/tonne in early June, rising from the three-month lows of 457,700 that held through May amid a rebound in demand projections as strict Covid lockdowns in Shanghai were relaxed. The recent fiscal stimulus for the automobile sector was expected to boost EV sales, propelling demand for lithium and related EV battery raw materials.
- The updated market consensus of the EPS growth in FY22/23 is 133.9%/7.8% YoY, respectively, translating to 10.1×/9.4x forward PE. The current PER is 15.2x. Bloomberg consensus average 12-month target price is HK$159.6.