Summary of Conference Call on Energy Metals and Lithium Industry Industry Overview - The energy metals sector, particularly electrolytic aluminum and lithium, is expected to outperform in Q4 2025, with electrolytic aluminum projected to perform better than copper in the short term [1][3] - Strong demand for energy storage is anticipated, with a projected growth of 90% in 2025, 50% in 2026, and 40% in 2027 [1][4] Key Insights and Arguments - Lithium carbonate demand is expected to reach 2 million tons, requiring an additional 400,000 tons of supply even with a 20% growth [2][11] - Current lithium prices and related stocks are expected to have limited downside due to strong demand and inventory reduction [5][4] - Companies like Tianqi Lithium and Ganfeng Lithium are projected to achieve profits of 7-8 billion yuan at a conservative price of 150,000 yuan/ton [1][7] - Yongxing Materials has a low cost of 50,000 yuan/ton, with a price-to-earnings ratio of only 8 at 150,000 yuan/ton [1][7] - Huayou Cobalt is expected to see revenues of 6 billion yuan in 2025, 8 billion yuan in 2026, and 10 billion yuan in 2027, with a market value projected to reach at least 160 billion yuan [1][8] - Shengxin Lithium Energy's total production capacity is expected to reach 100,000 tons, with a future market value exceeding 50 billion yuan [1][9] Investment Recommendations - Recommended companies for investment include: - Large caps: Ganfeng Lithium, Tianqi Lithium, Huayou Cobalt, and Salt Lake Co. - Small caps: Shengxin, Yahua, and Yongxing, which are considered to have high cost-performance ratios [12][2] - The overall sentiment towards the lithium carbonate industry is optimistic, with expectations of a tightening supply-demand situation in the coming years [11][12] Additional Important Points - The energy metals sector is currently in a consolidation phase, but there are still viable investment opportunities [3][6] - The market for nickel is also being positively impacted by production restrictions in Indonesia, which may enhance the performance of companies like Huayou Cobalt [8][7] - Companies like Cangge Holdings are progressing with multiple projects, indicating potential for future growth despite current high valuations [10]

Group 1 - Battery concept stocks weakened in early trading, with EVE Energy and Ganfeng Lithium both dropping over 4%, and Xinwangda falling over 3% [1] - Battery-related ETFs declined approximately 2% [1] Group 2 - Specific performance of battery ETFs includes: - Battery ETF (code 159755) at 1.130, down 0.026 (-2.25%) - Battery ETF Invesco (code 159757) at 0.935, down 0.021 (-2.20%) - Lithium Battery ETF (code 159840) at 0.904, down 0.020 (-2.16%) - Battery Leader ETF (code 159767) at 0.921, down 0.018 (-1.92%) - Battery ETF Fund (code 159775) at 0.943, down 0.017 (-1.77%) [2] Group 3 - Analysts believe that recent policy support has injected strong momentum into the battery industry, with the government continuously launching incentives for new energy vehicles, including trade-in programs, charging infrastructure development, and promoting new energy in rural areas, further unleashing consumer potential [1] - The gradual implementation of "anti-involution" policies is leading to more rational competition within the industry, which is expected to improve the overall profitability environment [1]

Core Conclusion - Morgan Stanley recently acknowledged previous misjudgments regarding the stock prices of Ganfeng Lithium (002460) and Tianqi Lithium (002466), upgrading their ratings from "reduce" to "neutral" [1][2] - The stock prices of Ganfeng Lithium and Tianqi Lithium have significantly outperformed lithium carbonate prices, with increases of 79% to 137% since July, compared to a 34% rise in lithium carbonate prices [3] Lithium Market Analysis - The strong performance of Ganfeng Lithium and Tianqi Lithium is attributed to robust demand for energy storage systems, supply disruptions due to mining license renewals in China, and positive developments in solid-state battery research [4] - Morgan Stanley has adjusted its lithium price forecast for FY2026 from 70,000 RMB/ton to 90,000 RMB/ton, anticipating that lithium supply will gradually increase as prices reach around 90,000 RMB/ton [2][4] Energy Storage Demand - Market expectations for global energy storage battery shipments in 2026 vary widely, with growth projections ranging from 20% to 80%. Morgan Stanley's analyst predicts shipments will reach approximately 770 GWh, a 30% year-on-year increase [5] - Since June, energy storage has accounted for over 25% of global battery production and 40% of lithium iron phosphate battery production, contributing to rising lithium prices and improved profit margins for battery manufacturers [5] Mining License and Supply Issues - The renewal of mining licenses in Jiangxi province is becoming clearer, with expectations for gradual capacity release from the Jiangxia mine, which has an annual capacity of approximately 45,000 to 50,000 tons [6] - Even with the anticipated supply from the Jiangxia mine, investors expect the global lithium market to remain in a shortage state through 2025 and 2026 [6] Company-Specific Insights Ganfeng Lithium - Ganfeng Lithium is a leading global lithium producer with key assets such as Mt Marion and Cauchari-Olaroz, and its battery business has seen rapid growth, contributing 40% to revenue by Q3 2025 [8] - Financial forecasts for FY2026 estimate revenue of 28.819 billion RMB, adjusted net profit of 1.794 billion RMB, and an adjusted EPS of 0.87 RMB, with an EBITDA margin of 19.5% [9] Tianqi Lithium - Tianqi Lithium holds a 26% stake in the Greenbushes mine, the lowest-cost spodumene source globally, and is the only Chinese lithium producer achieving self-sufficiency in mining, returning to profitability by Q3 2025 [11] - Financial forecasts for FY2026 estimate revenue of 16.996 billion RMB, adjusted net profit of 2.161 billion RMB, and an adjusted EPS of 1.32 RMB, with an EBITDA margin of 66.0% [11]

Core Viewpoint - The domestic market is increasingly recognizing the valuation of precious metals and non-ferrous resource stocks, with significant inflows of capital driving a strong upward trend in related assets [1][5]. Group 1: Market Performance - On November 13, 2023, the A-share market saw a comprehensive surge in precious metals and non-ferrous metals, with gold stocks ETF (159562) rising by 3.07% and non-ferrous metals ETF (516650) increasing by 4.06%, significantly outperforming the market [1]. - As of the close on November 13, domestic gold and silver futures rose by 1.56% and 5.48%, respectively, with silver reaching a historical high of 12,588 yuan per kilogram [4]. - The lithium metal sector led the A-share market with a 7.03% increase, while other non-ferrous metals like lead, zinc, nickel, and cobalt also saw gains of over 4% [6]. Group 2: Economic Drivers - The recent bullish trend in resource metals is supported by a favorable international macroeconomic environment, domestic policies, and industry factors, including the ongoing geopolitical tensions and the U.S. trade protectionism [11][12]. - The World Gold Council reported that 95% of surveyed central banks plan to increase their gold holdings in the next 12 months, indicating a strong demand for gold as a "super-sovereign currency" [12]. Group 3: Sector Growth - The lithium battery sector has experienced explosive growth, with domestic sales of new energy vehicles reaching 11.196 million units in the first three quarters of 2025, a year-on-year increase of 34.55% [16]. - The copper market is projected to face a supply shortage, with demand expected to reach 27.29 million tons by 2025, while supply growth lags behind at only 1.1% [17]. - The aluminum sector is characterized by China's dominance, accounting for over 60% of global production and consumption, which provides a significant cost advantage for Chinese aluminum companies [18]. Group 4: Investment Opportunities - The non-ferrous metals ETF (516650) has seen a substantial inflow of funds, with a net inflow of 1.755 billion yuan from August 14 to October 17, 2023, and a year-to-date share increase of 900.76% [24]. - The gold stock ETF (159562) has also performed well, with a year-to-date increase of 86.98%, benefiting from the rising gold prices and favorable tax policies for virtual gold investments [26]. - The overall performance of the non-ferrous metals sector has been outstanding, with 60 out of 90 non-ferrous concept stocks in the A-share market rising over 50% this year [19].

Core Viewpoint - The Hong Kong stock market experienced significant net selling from northbound capital, with a total net sell of 35.21 billion HKD on November 13, 2023, indicating a cautious sentiment among investors [1]. Group 1: Stock Performance - Alibaba-W (09988) saw a net inflow of 16.97 billion HKD, with a total trading volume of 99.09 billion HKD, reflecting strong investor interest [2]. - Xiaomi Group-W (01810) recorded a net inflow of 8.91 billion HKD, indicating positive market sentiment towards its stock [2]. - Tencent (00700) faced a net outflow of 8.68 billion HKD, highlighting investor concerns following its quarterly earnings report [2][6]. Group 2: Sector Trends - Semiconductor stocks, including Hua Hong Semiconductor (01347) and SMIC (00981), received net inflows of 868.1 million HKD and 760.6 million HKD respectively, driven by optimistic forecasts for the AI-driven semiconductor cycle extending until 2027 [5]. - The report from Morgan Stanley predicts global semiconductor revenue growth of 18% and 11% in 2026 and 2027, respectively, supporting the bullish outlook for Asian tech stocks [5]. Group 3: ETF Activity - The Hang Seng Index ETF (02800) and the Hang Seng China Enterprises Index ETF (02828) experienced significant net outflows of 62.26 billion HKD and 22.89 billion HKD, respectively, reflecting a broader market weakness [7]. - Despite the outflows, analysts maintain a cautiously optimistic view on the medium-term market outlook, emphasizing the importance of technology innovation and domestic demand [7].

Core Viewpoint - The domestic market is increasingly recognizing the valuation of precious metals and non-ferrous resource stocks, with significant inflows of capital driving a strong upward trend in related assets [1][5]. Group 1: Market Performance - On November 13, 2023, the A-share market saw a comprehensive surge in precious metals and non-ferrous metals, with gold stocks ETF (159562) rising by 3.07% and non-ferrous metals ETF (516650) increasing by 4.06%, significantly outperforming the market [1]. - As of the close on November 13, domestic gold and silver futures saw substantial increases of 1.56% and 5.48%, respectively, with silver prices reaching a historical high of 12,588 yuan per kilogram [4]. - The lithium metal sector led the A-share market with a remarkable increase of 7.03%, while other non-ferrous metals like lead, zinc, nickel, and cobalt also saw gains of over 4% [6]. Group 2: Economic Drivers - The recent bullish trend in resource metals is supported by various macroeconomic factors, including the end of the U.S. government shutdown, which has renewed hopes for a Federal Reserve rate cut in December [2][11]. - The ongoing geopolitical tensions, particularly since the onset of the Russia-Ukraine conflict, have heightened global risk aversion, driving investments into gold as a safe-haven asset [11][12]. - Central banks worldwide, including China, are increasing their gold reserves, with China's gold reserves reaching approximately 2,304.457 tons as of the end of October, marking a continuous increase for 12 months [12]. Group 3: Sector Growth - The lithium battery sector has seen explosive growth, with domestic sales of new energy vehicles reaching 11.196 million units in the first three quarters of 2025, a year-on-year increase of 34.55% [16]. - The demand for lithium is further fueled by the rise of energy storage solutions, with domestic lithium battery shipments nearly doubling year-on-year [16]. - The copper market is expected to face a supply shortage by 2025, with demand projected to reach 27.29 million tons, while supply growth lags behind at only 1.1% [17]. Group 4: Investment Opportunities - The non-ferrous metals ETF (516650) has seen significant inflows, with a net inflow of 1.755 billion yuan from August 14 to October 17, 2023, and a year-to-date share increase of 900.76% [24]. - The gold stocks ETF (159562) has also performed well, with a year-to-date increase of 86.98%, benefiting from the rising gold prices and favorable tax policies for virtual gold investments [26]. - Major non-ferrous metal companies, including Zijin Mining and Ganfeng Lithium, have experienced substantial stock price increases, with many achieving over 50% gains this year [19][21].

净买入阿里巴巴-W 13.75亿、小米集团-W 7.79亿； 净卖出盈富基金62.27亿、恒生中国企业22.89亿、腾讯控股8.75亿、信达生物4.19亿、赣锋锂业2.61亿。 据统计，南下资金已连续12日净买入小米，共计89.1582亿港元。(格隆汇) 来源：格隆汇APP 格隆汇11月13日｜南下资金今日净卖出港股35.21亿港元。其中： ...

Core Viewpoint - The A-share market experienced a collective rise on November 13, with the Shanghai Composite Index reaching a 10-year high, driven by significant gains in energy metals and a positive outlook for the recycling of non-ferrous metals in China [2] Industry Summary - The non-ferrous metals industry in China is witnessing rapid growth, with production expected to increase from 14.5 million tons at the end of the 13th Five-Year Plan to 19.15 million tons by the end of 2024, reflecting an average annual growth rate of 7.2% [2] - By the end of 2025, production is anticipated to exceed 20 million tons for the first time, positioning the industry as a crucial solution to resource and environmental bottlenecks [2] Company Summary - Several companies in the energy metals sector, such as Yongxing Materials, Rongjie Co., and Shengxin Lithium Energy, saw their stock prices hit the daily limit, while Tianqi Lithium, Huayou Cobalt, and Ganfeng Lithium also experienced significant gains [2] - According to Dongfang Securities, the non-ferrous metals sector is entering a new cycle driven by supply-demand balance, with a focus on gold, lithium, rare metals, tungsten, and copper-aluminum [2]

Core Viewpoint - The lithium battery sector is experiencing a significant surge, driven by explosive growth in demand for power batteries and energy storage, with expectations of over 30% growth in lithium demand next year due to energy storage [1][5]. Group 1: Industry Dynamics - On November 12, 2025 World Power Battery Conference in Yibin, Sichuan, 180 projects were signed with a total amount of 86.13 billion yuan, covering key areas in green energy such as power batteries, new energy storage, and smart connected vehicles [4]. - The lithium battery industry chain is at a pivotal moment, with unprecedented development opportunities driven by a combination of technological revolution and market demand [6]. - The domestic energy storage market is expected to see a significant increase in installed capacity, projected to reach 300 GWh by 2026, driven by economic factors and market dynamics [5]. Group 2: Company Performance - Leading lithium mining companies such as Tianqi Lithium and Ganfeng Lithium are showing strong performance, with revenue from lithium products reaching 99.79% and 92.30% respectively [2]. - Various funds focused on new energy vehicles and rare metals have shown substantial returns, with the top-performing fund achieving a 39.55% return over the past year [3]. Group 3: Market Outlook - The overall industry sentiment remains positive, with a focus on the price trends of upstream raw materials, monthly sales, and relevant domestic and international policies [6]. - The lithium battery and related sectors are expected to continue to attract investment opportunities, particularly in light of the ongoing transition in the energy structure [6].

Investment Rating - The report recommends a "Buy" rating for the industry, predicting that the industry index will outperform the Shanghai Composite Index by 10% or more in the next six months [20]. Core Insights - The total lithium carbonate production for Q3 2025 is approximately 8,300 tons, with an expected annual production exceeding 30,000 tons [1]. - The unit cash operating cost for lithium carbonate in Q3 2025 is $6,285 per ton, reflecting a 3% increase quarter-over-quarter [3]. - The average realized price for lithium carbonate in Q3 2025 is approximately $7,522 per ton, with current market prices around $9,200 per ton [4]. - The PPG project is expected to have an annual production capacity of up to 150,000 tons of LCE, with a post-tax net present value of $8.1 billion and an internal rate of return of 33% based on a lithium carbonate price of $18,000 per ton [5][8]. - The company reported a net loss of $64.5 million in Q3 2025, significantly higher than the $2.4 million loss in the same period last year, primarily due to increased losses from the Cauchari-Olaroz project [13]. Summary by Sections Production and Sales - Q3 2025 lithium carbonate production is approximately 8,300 tons, a 2% decrease from the previous quarter, with a total production of about 24,000 tons for the first three quarters of 2025 [1]. - Q2 2025 total shipments were approximately 7,775 tons, reflecting a 10% decrease quarter-over-quarter [2]. Operating Costs - The unit total cash cost for lithium carbonate in Q3 2025 is $6,514 per ton, a 2% increase from the previous quarter [3]. Pricing - The average realized price for lithium carbonate in Q3 2025 is approximately $7,522 per ton, with market prices reflecting a recovery since July [4]. Expansion Plans - The Cauchari-Olaroz project is advancing a Phase II expansion plan, considering an increase of 45,000 tons/year in lithium carbonate capacity [10]. - The PPG project has a proven and probable resource of 15.1 million tons of LCE, positioning it among the largest undeveloped lithium brine resources [8]. Financial Performance - As of September 30, 2025, the company holds $64 million in cash and cash equivalents, with total assets of $1,078.7 million and total liabilities of $251.7 million [14][15].