2 1 Shi Ji Jing Ji Bao Dao·2025-10-29 23:06Core Viewpoint - Ganfeng Lithium's significant turnaround in profitability is attributed to the positive change in fair value gains, with a net profit of 557 million yuan in Q3, marking a 364% increase year-on-year and achieving the highest quarterly profit in nearly two years [1][2]. Financial Performance - In Q3, Ganfeng Lithium reported revenues of 6.25 billion yuan and operating costs of 5.21 billion yuan, leading to a total cost of 6.277 billion yuan, which significantly narrowed the gap with revenues compared to the first half of the year [3]. - The company experienced a net fair value gain of 420 million yuan in Q3, a recovery from a loss of 53 million yuan in Q2, largely due to the rebound in the stock price of its associate company, Pilbara [1][5]. - The average price of battery-grade lithium carbonate increased from 60,000 yuan per ton in late June to a peak of 85,000 yuan per ton in August, contributing to improved revenue and cost dynamics for Ganfeng Lithium [2][3]. Market Conditions - The lithium market has shown signs of recovery, with domestic lithium salt futures and spot prices experiencing a phase of upward movement since October, which is expected to positively impact Ganfeng Lithium's Q4 performance [1][6]. - As of October 26, the weekly inventory of lithium products decreased by 2,292 tons, indicating a reduction in both upstream and downstream inventories, which supports the price stability in the market [8]. - The average price of domestic battery-grade lithium carbonate increased from 73,000 yuan per ton to approximately 79,000 yuan per ton, reflecting a positive trend in pricing [9][10]. Strategic Investments - Ganfeng Lithium holds a strategic 5.37% stake in Pilbara to secure lithium spodumene supply, which is considered a long-term investment and not classified as a securities investment [4]. - The stock price of Pilbara has increased by over 22% as of October 28, which is expected to further enhance Ganfeng Lithium's fair value gains [12][13]. Future Outlook - The ongoing strength in lithium prices suggests that Ganfeng Lithium's main business could see further improvements in Q4, as lithium products remain the largest revenue source for the company [11]. - The overall logic behind the company's Q3 profit growth is likely to continue, increasing the possibility of achieving profitability for the entire year [14].