According to the Zhixun Finance APP, Haitong International has released a research report stating that it has covered Ganfeng Lithium (01772) for the first time, giving it an 'outperform the market' rating. The company is expected to have operating revenues of RMB 26.213 billion, RMB 30.042 billion, and RMB 39.522 billion for 2024-2026, net profit attributable to shareholders of RMB 3.098 billion, RMB 4.703 billion, and RMB 6.136 billion, corresponding to EPS of RMB 1.54, RMB 2.33 and RMB 3.04 respectively. The target price is HKD 21.53.

Haitong International's main viewpoints are as follows:

A lithium industry giant with a complete industry ecological chain.

The company is a global leader and the largest lithium compounds and metal lithium producer in China. Ganfeng Lithium covers the commercialization process of extracting lithium from brine, ore, and recycling. It also has more than 40 lithium compound and metal lithium product lines. Through its unique vertically integrated business model, Ganfeng Lithium covers all aspects from upstream resource development to downstream product manufacturing, improving operating efficiency and profitability.

Multiple competitive advantages and constant exploration of new growth points.

Against the backdrop of a downward cycle in the lithium industry, the company has opened up new growth points through its integrated layout. The company not only continues to expand its lithium resource capacity in Australia, Argentina, Mexico, and other places, but has also stabilized its upstream raw material supply. At the same time, the company has consolidated its core competitiveness in the midstream lithium salt deep processing and metal lithium manufacturing through technological innovation and capacity optimization. In the downstream lithium battery and lithium recycling business areas, Ganfeng Lithium relies on the advantages of the entire industry chain to accelerate business expansion, including solid-state lithium batteries, power batteries, and actively participate in national large-scale photovoltaic energy storage projects. In addition, the company has become a leading company in the battery recycling industry by developing new processes for retired battery recycling and improving industrialization technology level.

The lithium price is greatly affected by supply and demand, but the long-term prospects are broad.

As a strategic resource, global lithium reserves are unevenly distributed, mainly in the Lithium Triangle in South America and Australia. With the development of new energy vehicles and energy storage systems, lithium demand has increased significantly, and supply has gradually diversify. Although there is currently an oversupply situation in the short term, in the long run, the potential demand for lithium is huge. In terms of costs, the cost support for the lithium price is still strong, and suppliers are promoting supply-demand balance by accelerating capacity clearing. In the future, with technological upgrades and cost control, the lithium industry is expected to achieve high-quality development and meet the continuously growing market demand.

Risk reminders: unexpected capacity construction, operating risks in overseas projects, and large fluctuations in lithium salt prices.