Core Viewpoint - Ganfeng Lithium announced the approval of a proposal for H-share refinancing by its sixth board meeting [2] Group 1 - The company held its sixth board meeting to discuss and approve the refinancing proposal [2]

Core Viewpoint - The article highlights the ongoing expansion trend in the lithium battery industry, driven by increasing demand for energy storage and advancements in technology, indicating a recovery in the sector [4][12]. Group 1: Expansion Announcements - Zhuhai Guanyu reported a revenue of approximately 6.1 billion yuan for the first half of the year, a year-on-year increase of about 14%, and plans to invest around 2 billion yuan in a new production line with a construction period of about 12 months [4]. - Ganfeng Lithium announced a placement of 40 million H shares at a price of 29.28 HKD per share, expecting to raise approximately 1.17 billion HKD, along with plans to issue convertible bonds totaling 1.37 billion HKD for loan repayment and capacity expansion [4]. Group 2: Expansion Trends - The year began with a wave of expansion, starting with Jiangsu Lanjun New Energy's project and a zero-carbon city agreement signed with CATL [6][8]. - In March, multiple companies in the lithium battery supply chain saw stock price increases, driven by CATL's rapid expansion plans, including a 40GWh capacity plan in Dongying [10]. Group 3: Demand Dynamics - The energy storage sector has seen over 230 new projects in the first half of the year, with total capacity exceeding 1500GWh, primarily driven by lithium battery storage [12]. - The increase in large-scale overseas energy storage projects is providing significant opportunities for leading companies to expand, supported by favorable policies [13]. - The production of high-voltage lithium iron phosphate and silicon-based anode materials is also on the rise, with several companies announcing new production lines and projects [13].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is expected to gradually increase its own resource output, with significant performance elasticity contributed by lithium price increases in the second half of the year [1] - The company's Q2 performance met expectations, with a revenue of 8.38 billion yuan, down 12.6% year-on-year, and a net profit attributable to shareholders of -530 million yuan, up 30.1% year-on-year [9] - The company anticipates lithium salt sales to reach 160,000 to 180,000 tons in 2025, a year-on-year increase of approximately 30% [9] - The Goulamina lithium project in Mali is expected to contribute additional output in the second half of the year, while the Mariana project is gradually ramping up production [9] - The company forecasts a net profit attributable to shareholders of 434 million yuan in 2025, with a year-on-year growth of 120.93% [1][9] Financial Summary - Total revenue for 2023 is projected at 32.972 billion yuan, with a year-on-year decrease of 21.16% [1] - The net profit attributable to shareholders for 2025 is estimated at 434.1 million yuan, with a significant recovery from a loss of 2.074 billion yuan in 2024 [1] - The earnings per share (EPS) for 2025 is expected to be 0.22 yuan, recovering from -1.03 yuan in 2024 [1] - The company’s total assets are projected to reach 100.832 billion yuan in 2024, increasing to 118.668 billion yuan by 2027 [10]

Group 1 - Hubei Fengchi New Energy Technology Co., Ltd. has been established, with Huang Tengfei as the legal representative [1] - The company's business scope includes online energy monitoring technology research and development, energy recovery system research and development, and manufacturing of electrical equipment [1] - The company is indirectly wholly owned by Ganfeng Lithium Co., Ltd. (002460) [1]

Group 1 - Hubei Fengchi New Energy Technology Co., Ltd. has been established with Huang Tengfei as the legal representative [1] - The company is wholly owned by Ganfeng Lithium Co., Ltd. (002460) [1] - The business scope includes online energy monitoring technology research and development, energy recovery system research and development, and manufacturing of electrical equipment [1] Group 2 - The registered capital of Hubei Fengchi New Energy Technology Co., Ltd. is 1 million yuan [2] - The company is located in Xianning City, Hubei Province, and is registered with the Xianning Market Supervision Administration [2] - The business operations are set to continue until at least August 21, 2025 [2]

Core Viewpoint - The company's 1H25 performance fell short of expectations, with significant declines in revenue and net profit due to falling lithium prices and increased financial costs [1][2]. Financial Performance - In 1H25, the company reported revenue of 8.376 billion yuan, a year-on-year decrease of 12.65%, and a net profit attributable to shareholders of -531 million yuan, down 30.13% year-on-year. The non-recurring net profit was -913 million yuan [1]. - For 2Q25, the company achieved revenue of 4.604 billion yuan, a year-on-year increase of 1.62% and a quarter-on-quarter increase of 22.07%. However, the net profit was -175 million yuan, and the non-recurring net profit was -671 million yuan, reflecting a significant year-on-year decline of 814.98% and a quarter-on-quarter increase of 176.91% [1]. - The decline in lithium prices led to a decrease in profits and investment income, with domestic battery-grade lithium carbonate prices at 70,000 yuan per ton, down 32% year-on-year. The gross profit from lithium business was 400 million yuan, down 48% year-on-year [1]. - Financial expenses increased to 720 million yuan, a year-on-year rise of 23%, primarily due to increased borrowings, resulting in a debt-to-asset ratio of 58.6%, up 12.23 percentage points year-on-year [2]. Business Segments - The lithium battery business showed growth, achieving a gross profit of 420 million yuan, up 57.7% year-on-year, with a gross margin of 14.17%, an increase of 4.29 percentage points year-on-year. This growth supported overall performance [1]. Development Trends - The integration of Argentine salt lake projects is progressing, with the company planning to develop the Pozuelos-PastoesGrandes salt lake basin through a joint venture with LAR, holding 67% and 33% stakes respectively [3]. - The Goulamina lithium mine in Mali is expected to be a significant source of hard rock lithium, with the first phase producing 506,000 tons of concentrate annually now in operation [3]. Profit Forecast and Valuation - The company maintains its profit forecast, with the current stock price corresponding to a 2026 P/E of 41.0 times for A-shares and 29.2 times for H-shares. The target prices for A-shares and H-shares have been raised by 8% and 29% to 41.60 yuan and 32.16 HKD, respectively, indicating an upside potential of 6% and 4% compared to current prices [4].

Core Viewpoint - Ganfeng Lithium (002460)(01772) experienced a decline of over 3%, trading at HKD 29.88 with a transaction volume of HKD 96.17 million, following the announcement of a share placement and convertible bond issuance [1] Group 1: Share Placement - Ganfeng Lithium announced a placement of 40.03 million shares, representing approximately 9.02% of the enlarged H-shares and about 1.95% of the total issued shares, at a price of HKD 29.28 per share, which is a discount of about 5.49% compared to the closing price on August 25 [1] - The expected net proceeds from the share placement are approximately HKD 1.169 billion [1] Group 2: Convertible Bond Issuance - The company also proposed to issue HKD 1.37 billion of 1.5% convertible bonds maturing in 2026, with an initial conversion price of HKD 33.67 per share, representing a premium of about 8.68% over the closing price on August 25 [1] - The convertible bonds can be fully converted into approximately 4.069 million H-shares, accounting for about 9.16% of the enlarged H-shares and approximately 1.98% of the total issued shares (excluding treasury shares) [1] - The expected net proceeds from the convertible bond issuance are approximately HKD 1.346 billion [1] Group 3: Use of Proceeds - The net proceeds from both the share placement and the convertible bond issuance are intended for loan repayment, capacity expansion and construction, working capital supplementation, and general corporate purposes [1]

Core Viewpoint - Ganfeng Lithium's stock has dropped over 3% following the announcement of a share placement and convertible bond issuance, indicating market reaction to the capital raising efforts [1] Group 1: Share Placement - Ganfeng Lithium announced a placement of 40.0256 million shares, representing approximately 9.02% of the enlarged H-shares and about 1.95% of the total issued shares [1] - The placement price is set at HKD 29.28 per share, which is a discount of approximately 5.49% compared to the closing price of HKD 30.98 on August 25 [1] - The expected net proceeds from the share placement are approximately HKD 1.169 billion [1] Group 2: Convertible Bonds - The company also proposed to issue HKD 1.37 billion of 1.5% convertible bonds maturing in 2026, with an initial conversion price of HKD 33.67 per share, representing a premium of about 8.68% over the closing price on August 25 [1] - The convertible bonds can be fully converted into approximately 4.0689 million H-shares, accounting for about 9.16% of the enlarged H-shares and approximately 1.98% of the total issued shares (excluding treasury shares) [1] - The expected net proceeds from the issuance of convertible bonds are approximately HKD 1.346 billion [1] Group 3: Use of Proceeds - The net proceeds from both the share placement and the convertible bond issuance are intended for loan repayment, capacity expansion and construction, working capital supplementation, and general corporate purposes [1]

Group 1 - Ganfeng Lithium (SZ 002460) announced on August 26 that its sixth board meeting was held on August 25, 2025, to review the proposal for general authorization of H-share issuance [1] - For the first half of 2025, Ganfeng Lithium's revenue composition was as follows: 56.78% from non-ferrous metal smelting and rolling processing, 35.52% from lithium batteries and cells and their direct materials, and 7.7% from other sources [1]

Summary of Ganfeng Lithium Earnings Review Company Overview - **Company**: Ganfeng Lithium (1772.HK) - **Market Cap**: HK$62.5 billion / $8.0 billion - **Enterprise Value**: HK$107.1 billion / $13.7 billion - **Industry**: Basic Materials, specifically lithium production Key Financial Results - **1H25 Performance**: - Net loss of Rmb536 million, or loss per share of Rmb0.266, compared to a net loss of Rmb759 million in 1H24 [1] - Recurring net loss of Rmb442 million, down from a positive recurring profit in 1H24 [1] - Total revenue decreased by 13% year-over-year to Rmb8.3 billion, 19% below estimates [25] - Gross profit of Rmb890 million, down 16% year-over-year and 30% lower than estimates [26] Pricing and Sales - **Lithium Pricing**: - Realized ASP for lithium hydroxide was US$7,942/t in 1H25, 13% below expectations [25] - Realized ASP for lithium carbonate was US$8,606/t in 1H25, down 32% year-over-year [37] - **Sales Volume**: - Lithium compound sales volume was 8% below estimates, with a significant drop in realized ASP contributing to lower revenue [25] Earnings Revisions - **2025E Earnings**: Recurring earnings cut by 28% due to lower realized ASP for lithium hydroxide and lower sales volume [2] - **2026-27E Earnings**: Revised up by 12-44% due to: 1. Lower production costs for integrated projects [2][23] 2. Higher self-sufficiency in spodumene supply [2][23] 3. Increased battery profit from new ESS plant operations [2][23] Industry Insights - **Market Dynamics**: - Recent supply disruptions from China are expected to support spot lithium carbonate prices [2] - Global excess capacity poses risks to current spot prices, which are 39% above the bottom in June [2] Valuation Analysis - **Target Prices**: - Revised 12-month price targets to HK$28.00 and Rmb30.50, down from HK$19.00 and Rmb21.40 [18][32] - **Valuation Metrics**: - Bottom-of-the-cycle valuation suggests a theoretical valuation of Rmb18.4/share at a spot lithium carbonate price of US$10.5k/t-LCE [2] - Current share price is HK$30.8/share for H and Rmb38.3/share for A [2] Risks - **Key Risks Identified**: 1. Fluctuations in lithium product prices [33][34] 2. Project execution risks [33][34] 3. Raw material purchase risks [33][34] 4. Policy risks affecting EV adoption [33][34] 5. Currency and country risks related to overseas assets [33][34] Operational Metrics - **Cash Flow**: - Operating cash flow declined by 92% year-over-year to Rmb300 million in 1H25 [29] - Free cash flow remained negative at Rmb1.9 billion [29] - **Balance Sheet**: - Net gearing increased to 73% by the end of 1H25, up from 64% at the end of 2024 [29] Conclusion - Ganfeng Lithium's performance in 1H25 was below expectations, primarily due to lower lithium prices and sales volumes. The company is adjusting its earnings forecasts for the coming years while navigating significant market risks and operational challenges. The revised target prices reflect a cautious outlook amid ongoing industry volatility.