Summary of Conference Call on China Battery Materials Industry Overview - The lithium market is experiencing volatility due to potential supply disruptions from lepidolite mine suspensions and a stronger-than-expected battery production pipeline [1][2] - A demand-driven landscape is emerging, with expectations of a price and margin recovery in battery materials extending into 2026-27 [1] Key Insights - **Demand Growth Forecast**: Battery demand is projected to grow by 31% YoY in 2026, with Energy Storage Systems (ESS) and Electric Vehicle (EV) demand expected to increase by 45% YoY and 26% YoY, respectively [2][9] - **Destocking Trends**: Lithium destocking is estimated at ~15,000 tons during November 2025, with expectations that this trend will continue, favoring average selling price (ASP) increases and margin recovery in the lithium sector [3][19] - **Price Projections**: Forecasts for lithium prices (including VAT) are set at Rmb85,000/ton and US$890/ton during FY26 [3] Company-Specific Updates Ganfeng Lithium - **Rating Upgrade**: Ganfeng Lithium's stock rating has been upgraded to Buy, with a target price of Rmb85.51, reflecting a strong outlook due to robust battery demand and improving cost competitiveness from low-cost upstream resources [4][26][28] - **Financial Model Update**: FY25 EPS has been revised down by 16%, while FY26-27 EPS is revised up by 17% and 20%, respectively, indicating a positive outlook for the company's performance [27][34] Tianqi Lithium - **Rating Upgrade**: Tianqi Lithium's stock rating has also been upgraded to Buy, with a target price of Rmb71.69, supported by anticipated ASP and margin recovery due to strong battery demand [37][39] - **Financial Model Update**: FY25 EPS has been revised down by 29%, while FY26-27 EPS is revised up by 2% and 14%, respectively, reflecting a cautious yet optimistic outlook [38][45] Market Dynamics - **Supply Concerns**: The JXW mine's suspension has led to a decrease in lithium carbonate supply, but the resumption of operations is not expected to significantly alter the current destocking pattern [22][23] - **Backward Integration**: Battery manufacturers are increasingly integrating backward into lithium supply chains, indicating a potential upcycle in the lithium market [25] Additional Considerations - **Economic Factors**: The improving economics of ESS, particularly in China, are expected to support demand growth, with ESS projected to account for ~30% of total battery demand by 2030 [9][11] - **Investor Sentiment**: There are concerns regarding the sustainability of ESS demand growth, but industry checks suggest robust demand is likely to continue, driven by significant capacity expansions from major battery manufacturers [16][17] Conclusion - The lithium market is poised for recovery, driven by strong demand from the battery sector, particularly in ESS and EVs. Both Ganfeng and Tianqi Lithium are well-positioned to benefit from these trends, with upgraded ratings reflecting positive market sentiment and financial outlooks.

Core Insights - The 2025 (10th) Starting Point Lithium Battery Industry Annual Conference and Lithium Battery Golden Ding Award Ceremony will take place from December 17-19, 2025, in Shenzhen, focusing on new technologies and ecosystems in the lithium battery sector [2][3]. Industry Developments - In early 2025, BMW announced the upcoming installation of large cylindrical batteries in 2026, prompting a surge in the industry towards 46 series large cylindrical batteries [1]. - The Ministry of Industry and Information Technology released new safety standards for electric vehicle batteries, sparking widespread discussions on battery performance [1]. - Several companies have begun mass production of full-tab cylindrical batteries, which are expected to find applications in electric vehicles, tools, and smart homes due to their high rate and long lifespan advantages [1]. - Solid-state batteries continue to gain attention for their high safety and energy density, maintaining high interest levels in 2025 [1]. Storage Sector Trends - The cancellation of mandatory storage policies by the state has raised concerns about future demand for storage batteries [1]. - The 314Ah battery is gradually replacing the 280Ah as the mainstream cell, with companies like CATL and EVE Energy releasing cells with capacities exceeding 500Ah, indicating a trend towards larger capacity storage cells [1]. - The U.S. tariff policy imposed in 2025 has impacted the global storage industry [1]. Emerging Applications - The debut of humanoid robots at the Spring Festival Gala in early 2025 has spurred interest in batteries for humanoid robots, becoming a new focus for battery companies [1]. - Various local policies promoting low-altitude economies are accelerating the development of the eVTOL industry [1]. Material Innovations - The 9 series ultra-high nickel ternary cathodes are being widely adopted, while lithium manganese iron phosphate cathodes are being tested in commercial vehicles and two-wheeled vehicles [1]. - The application of silicon-based anodes in conjunction with full-tab technology is increasing [1]. Event Highlights - The conference will feature over 2000 attendees and 60+ keynote speakers discussing core issues and technological breakthroughs [3]. - The event will include nine specialized forums and the 10th Lithium Battery Golden Ding Award ceremony, recognizing outstanding contributions to the lithium battery industry [3][7]. - The event will also host the 2025 China New Energy Entrepreneurs Club Council meeting, facilitating direct connections among industry leaders [3]. Agenda Overview - The event will include specialized sessions on cylindrical battery technology, soft-pack batteries, new materials and processes, and storage battery technology [5][6]. - Key topics will cover advancements in fast-charging technologies, energy density improvements, and safety standards [5][6]. Award Information - The Lithium Battery Golden Ding Award aims to encourage innovation in the lithium battery industry and recognize outstanding brands [7]. - The award selection process will take place from September 1 to December 19, 2025, with various categories including technology innovation and customer trust [8][10].

Group 1 - A new company, South China Ganfeng Comprehensive Energy (Guangdong) Co., Ltd., has been established with a registered capital of 50 million yuan [1] - The legal representative of the new company is Huang Tengfei [1] - The business scope includes energy storage technology services, new energy technology research and development, online energy monitoring technology research and development, and energy recovery system research and development [1] Group 2 - The company is wholly owned by Ganfeng Lithium (002460) through indirect holdings [1]

Market Overview - The energy metals sector experienced a decline of 1.32% on November 12, with Boqian New Materials leading the drop [1] - The Shanghai Composite Index closed at 4000.14, down 0.07%, while the Shenzhen Component Index closed at 13240.62, down 0.36% [1] Stock Performance - Notable stock performances included: - Jidian Mining (600711) closed at 11.10, up 0.63% with a trading volume of 1.1145 million shares and a transaction value of 1.234 billion [1] - Ganfeng Lithium (002460) closed at 67.88, up 0.21% with a trading volume of 682,000 shares [1] - Boqian New Materials (605376) closed at 49.32, down 2.61% with a trading volume of 39,800 shares and a transaction value of 197 million [2] Capital Flow - The energy metals sector saw a net outflow of 744 million from institutional investors, while retail investors contributed a net inflow of 711 million [2] - The capital flow for specific stocks included: - Jidian Mining had a net inflow of 64.415 million from institutional investors [3] - Ganfeng Lithium experienced a net outflow of 67.128 million from institutional investors [3] - Boqian New Materials had a significant net outflow of 18.9704 million from institutional investors [3]

Investment Rating - The report maintains an "Increase" rating for the electric equipment industry, indicating a positive outlook for investment in this sector [1]. Core Insights - The overall holding in the new energy sector has increased, with significant rises in electric vehicles, photovoltaics, energy storage, industrial control, power grids, and wind power sectors [1][2]. - The proportion of holdings in the new energy vehicle sector rose to 5.28%, an increase of 1.13 percentage points compared to the previous quarter [1][19]. - The photovoltaic sector saw its holding proportion rise to 4.18%, up 1.43 percentage points, while the wind power sector increased to 3.46%, a rise of 0.14 percentage points [2][33]. - The energy storage sector's overall holding decreased to 5.60%, down 2.20 percentage points, with specific segments like temperature control and new energy storage showing increases [5][19]. Summary by Sections Overall New Energy Holdings Analysis - The proportion of new energy heavy holdings in total fund heavy holdings increased by 2.74 percentage points to 14.94% [14]. - The new energy sector's overall holding value accounted for 14.9% of total fund heavy holdings, indicating an overweight of 2.10 percentage points [19]. New Energy Vehicle Sector - The new energy vehicle sector's holding proportion rose to 5.28%, with upstream lithium mining and midstream components increasing, while complete vehicles and charging stations saw a decline [1][19]. - Upstream lithium mining holdings increased by 1.24 percentage points to 2.86% [24]. - Midstream holdings rose by 0.69 percentage points to 8.92%, with significant increases in structural components and lithium hexafluorophosphate [25]. Photovoltaic and Wind Power Sectors - The photovoltaic sector's holding proportion increased to 4.18%, with notable rises in silicon materials and battery holdings [33]. - The wind power sector's holding proportion rose to 3.46%, with increases across various components including complete machines and tower structures [2][19]. Industrial Control and Power Equipment - The industrial control and power electronics sector's overall holding increased to 6.21%, up 1.06 percentage points [4]. - The power equipment sector's holding rose to 1.81%, an increase of 0.33 percentage points [4]. Energy Storage Sector - The energy storage sector's overall holding decreased to 5.60%, with specific segments like temperature control and new energy storage increasing, while PCS holdings declined [5][19]. - Energy storage battery holdings increased by 2.04 percentage points to 7.97% [5].

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core View The current futures market shows high - level volatility, with continuous inventory reduction and good support from the consumer side. However, after the price increase, spot trading has weakened, and the downstream's acceptance of high prices is relatively limited. The resumption of production at the mine end is in progress, and it is expected to gradually resume production. Attention should be paid to the inflection points of consumption and inventory. If consumption weakens and the mine resumes production, the inventory may change from destocking to stockpiling, and the futures market may decline [5]. 3. Summary by Directory Market Analysis - On November 11, 2025, the main contract 2601 of lithium carbonate opened at 87,700 yuan/ton and closed at 86,540 yuan/ton, with a 1.38% change from the previous day's settlement price. The trading volume was 902,490 lots, and the open interest was 526,493 lots, a decrease from the previous trading day. The current basis is - 4,800 yuan/ton, and the number of lithium carbonate warehouse receipts was 2,8099 lots, a change of 608 lots from the previous day [2]. - According to SMM data, the price of battery - grade lithium carbonate is 80,600 - 84,000 yuan/ton, with a change of 1,550 yuan/ton from the previous trading day. The price of industrial - grade lithium carbonate is 79,600 - 80,600 yuan/ton, also with a change of 1,550 yuan/ton. The price of 6% lithium concentrate is 1,013 US dollars/ton, a change of 18 US dollars/ton from the previous day. The downstream material factories are cautiously waiting and only making rigid - demand purchases, and the market transactions are mainly based on post - pricing. The overall operating rate of lithium salt plants remains high, and it is expected that the domestic lithium carbonate production in November will be roughly the same as that in October. The power market and the energy storage market are both growing [3]. - Ganfeng Lithium announced that the PPGS lithium salt lake project in Argentina has obtained the "Environmental Impact Assessment Report", and it plans to submit an application to the Argentine government in the first half of 2026. The project has about 15.07 million tons of LCE proven + controlled resources and uses direct lithium extraction technology and solar evaporation pond technology [4]. Strategy - Unilateral: In the short term, it is advisable to wait and see. Pay attention to the inflection points of inventory and consumption and the resumption of production at the mine end, and choose the opportunity to sell hedging at high prices. - There are no suggestions for inter - period, cross - variety, spot - futures, and options trading [5].

Core Insights - JPMorgan has reversed its bearish stance on the lithium industry, acknowledging a significant underestimation of the explosive demand in the energy storage (ESS) market [1][3] - The bank upgraded its ratings for Tianqi Lithium and Ganfeng Lithium from "Underweight" to "Neutral," indicating a major correction in its outlook on the lithium market fundamentals [1][3] - JPMorgan expects a supply shortage in the global lithium market in 2025 and 2026, prompting a substantial increase in its lithium price forecast for 2026 from RMB 70,000 per ton to RMB 90,000 per ton, a nearly 30% increase [1][6] Energy Storage Demand - The surge in energy storage demand is identified as a key driver of stock prices, outweighing the negative impacts of supply factors such as the resumption of operations at CATL's mines [3][4] - Energy storage batteries accounted for over 25% of global battery production since June, with 40% of lithium iron phosphate (LFP) battery production attributed to this segment [4] - JPMorgan forecasts a 30% year-on-year increase in global energy storage battery shipments by 2026, reaching approximately 770 GWh, driven by policy incentives and ongoing deployment of grid-level projects [4] Supply Dynamics - The resumption of production at CATL's Jiangxi mine, with an annual capacity of approximately 45,000 to 50,000 tons of lithium carbonate equivalent (LCE), is expected to provide some relief to the current market tightness, but it will not be sufficient to fill the significant supply gap [5][6] - Even with the inclusion of the Jiangxi mine's output, the market is anticipated to remain in a state of shortage in 2025 and 2026 [6] - JPMorgan's supply forecasts remain largely unchanged, with slight increases in projections for 2029/2030, while noting that expansions in Australia and Chile may not fully offset delays in Brazil due to financing constraints [6] Price Target Adjustments - JPMorgan has raised its price targets for Ganfeng Lithium and Tianqi Lithium significantly, with Ganfeng's A-shares target increased from RMB 30 to RMB 65, and H-shares from HKD 22 to HKD 48 [6] - Tianqi Lithium's A-shares target has been adjusted from RMB 30 to RMB 54, and H-shares from HKD 28 to HKD 50, reflecting the revised outlook on lithium prices and market conditions [6]

Group 1 - The global power battery installation volume from January to September 2025 is approximately 768.3 GWh, representing a year-on-year growth of 35% [1] - In the same period, global sales of new energy vehicles reached about 14.237 million units, a year-on-year increase of 26%, with a penetration rate of 22.1% [1] - The China Securities New Energy Vehicle Industry Index, which tracks 50 listed companies involved in the new energy vehicle sector, reflects the overall performance of leading companies in the industry [1] Group 2 - The top ten weighted stocks in the China Securities New Energy Vehicle Industry Index as of October 31, 2025, account for 53.56% of the index [1] - The top ten stocks include CATL (10.10%), Huichuan Technology (8.28%), BYD (-0.26%), and others, with varying weightings and daily price changes [2] - The New Energy Vehicle ETF closely tracks the China Securities New Energy Vehicle Industry Index and has shown a recovery in trading, with a maximum intraday increase of over 2.5% [1][4]

Core Insights - Ganfeng Lithium's stock dropped by 2.34% on November 11, with a trading volume of 5.323 billion yuan, indicating market volatility [1] - The company reported a net financing outflow of 7.2611 million yuan on the same day, with a total financing and securities balance of 4.251 billion yuan [1] - Ganfeng Lithium's revenue for the first nine months of 2025 reached 14.625 billion yuan, reflecting a year-on-year growth of 5.02%, while net profit increased by 103.99% to 25.52 million yuan [2] Financing and Securities - On November 11, Ganfeng Lithium had a financing buy-in of 593 million yuan, with a financing balance of 4.237 billion yuan, accounting for 3.88% of its market capitalization [1] - The company's financing balance is above the 90th percentile of the past year, indicating a high level of leverage [1] - The short selling activity on the same day included a repayment of 8,000 shares and a sale of 2,900 shares, with a short selling balance of 1.43975 million yuan, also above the 90th percentile of the past year [1] Shareholder Structure - As of September 30, 2025, Ganfeng Lithium had 372,500 shareholders, an increase of 31.18% from the previous period, while the average number of circulating shares per shareholder decreased by 23.77% to 3,243 shares [2] - The company has distributed a total of 6.162 billion yuan in dividends since its A-share listing, with 3.933 billion yuan distributed in the last three years [3] - Major shareholders include Hong Kong Central Clearing Limited, which holds 69.1199 million shares, and several ETFs, with some reducing their holdings [3]

Core Viewpoint - JPMorgan Chase & Co. has reduced its stake in Ganfeng Lithium Co., Ltd. by selling 1,092,220 shares at an average price of HKD 49.7455 per share, amounting to approximately HKD 54.33 million, resulting in a decrease in their ownership percentage from 8.19% to 7.95% [1][2]. Summary by Relevant Sections - **Share Reduction Details** - JPMorgan Chase & Co. sold 1,092,220 shares of Ganfeng Lithium on November 6, 2025 [1]. - The transaction was executed at an average price of HKD 49.7455 per share, totaling around HKD 54.33 million [1][2]. - **Current Holdings** - After the sale, JPMorgan's total holdings in Ganfeng Lithium are now 35,502,261 shares [1]. - The ownership percentage has decreased from 8.19% to 7.95% following the reduction [1].