Core Viewpoint - The company's 1H25 performance fell short of expectations, with significant declines in revenue and net profit due to falling lithium prices and increased financial costs [1][2]. Financial Performance - In 1H25, the company reported revenue of 8.376 billion yuan, a year-on-year decrease of 12.65%, and a net profit attributable to shareholders of -531 million yuan, down 30.13% year-on-year. The non-recurring net profit was -913 million yuan [1]. - For 2Q25, the company achieved revenue of 4.604 billion yuan, a year-on-year increase of 1.62% and a quarter-on-quarter increase of 22.07%. However, the net profit was -175 million yuan, and the non-recurring net profit was -671 million yuan, reflecting a significant year-on-year decline of 814.98% and a quarter-on-quarter increase of 176.91% [1]. - The decline in lithium prices led to a decrease in profits and investment income, with domestic battery-grade lithium carbonate prices at 70,000 yuan per ton, down 32% year-on-year. The gross profit from lithium business was 400 million yuan, down 48% year-on-year [1]. - Financial expenses increased to 720 million yuan, a year-on-year rise of 23%, primarily due to increased borrowings, resulting in a debt-to-asset ratio of 58.6%, up 12.23 percentage points year-on-year [2]. Business Segments - The lithium battery business showed growth, achieving a gross profit of 420 million yuan, up 57.7% year-on-year, with a gross margin of 14.17%, an increase of 4.29 percentage points year-on-year. This growth supported overall performance [1]. Development Trends - The integration of Argentine salt lake projects is progressing, with the company planning to develop the Pozuelos-PastoesGrandes salt lake basin through a joint venture with LAR, holding 67% and 33% stakes respectively [3]. - The Goulamina lithium mine in Mali is expected to be a significant source of hard rock lithium, with the first phase producing 506,000 tons of concentrate annually now in operation [3]. Profit Forecast and Valuation - The company maintains its profit forecast, with the current stock price corresponding to a 2026 P/E of 41.0 times for A-shares and 29.2 times for H-shares. The target prices for A-shares and H-shares have been raised by 8% and 29% to 41.60 yuan and 32.16 HKD, respectively, indicating an upside potential of 6% and 4% compared to current prices [4].

Group 1 - Lithium carbonate futures have dropped significantly, with a decrease of 2.23% on May 29, closing at 58,860 yuan/ton, marking a year-to-date low and a cumulative decline of 23.66% from the peak price of 80,000 yuan/ton at the beginning of the year [2] - The spot price for battery-grade lithium carbonate also fell, with a decrease of 1,000 yuan per ton on the same day, averaging 61,000 yuan/ton, which is also a year-to-date low [2] - The primary reason for the continuous decline in lithium prices is insufficient downstream demand, as global lithium resource and lithium salt production capacity continue to expand, leading to an oversupply in the market [2] Group 2 - The future outlook for lithium prices is challenging, with an increase in supply and stable downstream demand, making a significant rebound unlikely [3] - The price decline may lead to the elimination of high-cost, low-efficiency companies, promoting a competitive environment where resources concentrate in more competitive enterprises [3] - Ongoing low prices may increase merger and acquisition activities within the lithium industry, potentially raising industry concentration [3]

Core Viewpoint - The lithium carbonate transaction price continues to decline, indicating a persistent bottoming out phase in the market, with a clear oversupply expected post-2025 [1][7]. Price Trends - As of April 2, the average price of battery-grade lithium carbonate is 74,100 yuan per ton, down from 77,650 yuan per ton at the beginning of February, reflecting a significant narrowing of price fluctuations compared to 2024 [1]. - By the end of March, the main contract for lithium carbonate futures saw a weekly decline of 3%, hitting a new low of 72,420 yuan per ton since its listing [3]. Supply and Demand Dynamics - The supply side is increasingly robust, with both import volumes and domestic production rising. In the first two months of 2025, China's lithium carbonate imports surged by 47.5% year-on-year to 32,500 tons, primarily sourced from Chile and Argentina [4]. - Despite strong supply and demand in the spot market, the overall market remains quiet due to an oversupply situation, with material companies primarily replenishing inventory based on immediate needs [3][4]. Cost Pressures - The price of Australian spodumene concentrate fell to 835 USD per ton by the end of March, entering the cost range, leading to significant cash losses for 30% to 40% of global production capacity, particularly for high-cost projects [5]. - Domestic lithium salt manufacturers are also facing losses amid the declining lithium prices, prompting a shift towards accelerating the release of low-cost lithium carbonate production capacity [8]. Strategic Adjustments - Ganfeng Lithium believes that lithium prices are likely at a relative bottom. The company plans to focus on developing low-cost projects, aiming to keep the cost of quality projects below 50,000 yuan per ton [9]. - Ganfeng Lithium's Mariana lithium salt lake project in Argentina has commenced production, with expectations of stabilizing supply and reducing production costs in the second half of 2025 [9].