CATL(SZ:300750) Guan Cha Zhe Wang·2025-08-12 03:35Core Viewpoint - The mining license for CATL's Yichun Jiangxiawo lithium mine, with an annual production capacity of 100,000 tons of lithium carbonate equivalent, has expired, leading to a production halt for at least three months, which will significantly impact lithium supply and prices in China [1]. Group 1: Supply Impact - The suspension of production at the Jiangxiawo lithium mine is expected to reduce domestic lithium supply by 8,300 tons per month, accounting for 8% of the monthly supply in China, shifting the supply-demand balance to a shortage [1]. - There are compliance risks associated with some lithium mines in Yichun, with a combined capacity of 185,000 tons LCE per year, representing 12.5% of global lithium supply. A complete shutdown could lead to a global lithium supply shortage [1]. Group 2: Price Outlook - With domestic lithium demand remaining strong and a decrease in overseas lithium salt imports, lithium prices are expected to continue rising [1]. - Morgan Stanley believes that CATL's contract lithium prices remain competitive compared to smaller battery manufacturers, and the cost increases can be passed on to automakers, maintaining an "overweight" rating with a target price of HKD 465 [1]. Group 3: Company Performance - The Yichun mine's capacity accounts for approximately 30% of CATL's total demand, but it has previously operated at low utilization rates, resulting in breakeven or slight losses [1]. - CATL had already recognized over RMB 3 billion in asset impairment losses in the third quarter of last year due to weak lithium prices, and the suspension of the Yichun mine may lead to an increase in lithium prices, enhancing the value of CATL's existing raw material inventory [1]. Group 4: Market Reaction - On the day of the news, CATL's stock price experienced a maximum decline of approximately 2.08% before recovering slightly, closing at CNY 262.76, down 0.34% [2].