HUAXI Securities·2025-08-16 13:00Investment Rating - The report recommends a "Buy" rating for the lithium industry, predicting that the industry index will outperform the Shanghai Composite Index by 10% or more in the upcoming months [7]. Core Insights - The total lithium carbonate production for Q2 2025 is approximately 8,500 tons, reflecting an 18% quarter-over-quarter increase. The company is on track to meet its production target of 30,000 to 35,000 tons for the year 2025 [1][2]. - The unit cash operating cost for lithium carbonate in Q2 2025 is reported at $6,098 per ton, an 8% decrease from the previous quarter, indicating successful cost optimization measures and increased production [3]. - The average realized price for lithium carbonate in Q2 2025 is approximately $7,400 per ton, impacted by a global decline in lithium prices [3]. Summary by Sections Production and Sales - In Q2 2025, the total shipment of lithium carbonate is about 8,635 tons, showing a 21% increase compared to the previous quarter [2]. - The company achieved a total lithium production of approximately 15,700 tons in the first half of 2025, supporting its annual production goals [1]. Cost Management - The unit total cash cost for lithium carbonate in Q2 2025 is $6,366 per ton, down about 7% from the previous quarter [3]. - The report highlights the effectiveness of cost optimization initiatives implemented in Q2 2025 [3]. Expansion Plans - The Cauchari-Olaroz project is advancing an expansion plan to add 40,000 tons per year of lithium carbonate capacity, utilizing existing infrastructure and solar evaporation techniques [6]. - A comprehensive feasibility study is expected to be completed by the end of the year, assessing options for producing up to 150,000 tons of lithium carbonate using mixed direct lithium extraction (DLE) technology [8]. Financial Performance - In Q2 2025, the company reported a net loss of $4.1 million, compared to a net profit of $2.2 million in the same period last year. This loss is attributed to reduced financial instrument gains and increased equity incentive costs [11]. - As of June 30, 2025, the company holds $68 million in cash and cash equivalents, down from $73.9 million at the end of Q1 2025 [14].