Summary of Ganfeng Lithium Co. Ltd. Conference Call Company Overview - **Company**: Ganfeng Lithium Co. Ltd. - **Industry**: Lithium Chemicals - **Market Cap**: Rmb62,756 million - **Current Stock Price**: HK$21.70 (as of March 28, 2025) - **Price Target**: HK$27.00, indicating a 24% upside potential Key Financial Results - **2024 Net Loss**: Rmb2.1 billion, at the low end of the preliminary loss range of Rmb1.4-2.1 billion [10] - **4Q24 Net Loss**: Rmb1.6 billion, with a recurring loss of Rmb530 million [10] - **Revenue for 2024**: Rmb18,201 million, with an estimated increase to Rmb20,927 million in 2025 [7] - **Lithium Chemicals Shipment Volume**: Grew 27% YoY to 130kt LCE in 2024 [10] - **Lithium Gross Profit Margin (GPM)**: Decreased by 2.1 percentage points YoY to 10.5% due to lower prices [4] Production and Inventory - **Lithium Chemicals Production**: Increased by 25% YoY [4] - **EV/ESS Battery Production**: Remained flat, with shipments up 8% YoY; inventory increased by 3.2 GWh to 6.5 GWh, representing ~80% of sales [4] - **Battery Segment GPM**: Declined by 6.3 percentage points YoY to 11.7% [4] Upstream Resource Updates - **CO Project**: Produced 25.4kt LCE in 2024, with plans to produce 30-35kt LCE in 2025 [5] - **Mariana Project**: Commenced production in February 2025, expected to supply LiCl from 2H25 [5] - **Goulamina Project**: Phase 1 (506kt SC) has commenced and is ramping up [5] - **Gabus Project**: Expected to ramp up gradually in 2025 [5] - **Potassic Salt Ore Project in Congo**: Under construction, with production expected to start by 2027 [5] Market Conditions and Challenges - **Lithium Prices**: Remain weak, with 1Q25 average at Rmb76k/t, down 0.2% QoQ and 24.5% YoY [3] - **Investment in Pilbara**: Fair value change loss impacted 4Q24 results, despite risk mitigation strategies [3] - **Headwinds**: Expected to continue into 1Q25 due to declining share prices of Pilbara and ongoing low lithium prices [3] Analyst Ratings and Outlook - **Stock Rating**: Overweight [7] - **Industry View**: Attractive [7] - **EPS Estimates**: Expected to recover from a loss of Rmb0.11 in 2024 to Rmb0.82 in 2025 [7] - **Valuation Methodology**: Base case 2025 P/E of 30.6x, in line with average of China lithium peers [11] Risks - **Upside Risks**: Shortages of lithium raw materials could constrain production, and EV market growth may exceed expectations [13] - **Downside Risks**: EV market demand could fall below expectations, and faster-than-expected global lithium supply growth may impact profitability [13] Conclusion Ganfeng Lithium Co. Ltd. is navigating a challenging market environment characterized by low lithium prices and production headwinds. However, the company is actively ramping up upstream resources, which may provide cost support in the future. The stock is rated as overweight, reflecting a positive outlook despite current challenges.

Core Viewpoint - Stardust Power Inc. reported its financial results for the year ended December 31, 2024, highlighting significant operational and financial developments as it positions itself in the lithium market to meet growing demand for energy independence and secure supply chains [1][4]. Full Year Business Highlights - The company successfully listed on Nasdaq in 2024 and acquired a 66-acre site in Muskogee, Oklahoma, for approximately $1.7 million [5]. - Key partnerships, including a non-binding agreement with Sumitomo Americas for a potential long-term supply of up to 25,000 metric tons of lithium carbonate annually, were established [5]. - The company is advancing its Definitive Feasibility Study (DFS) with Primero USA, nearing completion of its detailed process design package and updated cost estimates [5]. - New hires include Chris Celano as Chief Operating Officer and Martyn Buttenshaw to the Board of Directors, enhancing the company's leadership in the lithium sector [5]. Financial Highlights - For the year ended December 31, 2024, the company incurred a net loss of $23.8 million, compared to a net loss of $3.8 million for the prior period [4][6]. - Loss per share increased to $0.55 from $0.09, primarily due to higher administrative costs [11]. - Net cash used in operating activities totaled $9.7 million, up from $3.0 million in the prior period, driven by investments in operations and hiring [11]. - The company raised a total of $6.4 million in capital during the year, consisting of $2.8 million in equity and $3.5 million in debt [5]. Strategic Developments - The company broke ground on its lithium refinery site in Muskogee, Oklahoma, on January 22, 2025, marking a significant milestone [5]. - A licensing agreement with KMX Technologies was signed to access advanced VMD concentration technology, aimed at improving operational efficiency and sustainability [5]. - An equity raise in January 2025 generated $5.75 million through the issuance of common stock and cash warrants [5].

Summary of China Lithium Research Call Industry Overview - The report focuses on the **China lithium industry**, particularly the supply dynamics and production forecasts for lithium carbonate and hydroxide in 2025 and 2026 [2][3][4]. Key Points and Arguments 1. **Increased Supply Forecasts**: - China's lepidolite/spodumene supply is expected to exceed previous expectations, leading to a **5.9% increase in 2025E** and **4.5% increase in 2026E** global lithium supply [2][3]. - The updated forecast for **China lithium lepidolite production** in 2025 is **194kt LCE**, a **22% YoY increase**, significantly higher than the previous estimate of **124kt LCE** [3]. 2. **Inventory Levels**: - As of February 2025, the total lithium feedstock inventory is approximately **1.5 months**, with lithium carbonate inventory also around **1.5 months**, indicating a healthy supply despite strong demand from LFP batteries [2][3]. - Lithium hydroxide inventory remains stable but has a higher inventory duration of nearly **4 months** due to weaker demand for NCM batteries [2]. 3. **Demand Growth**: - China’s lithium demand is projected to grow by **51.9% YoY** in March 2025, with total lithium carbonate and hydroxide output expected to increase by **26% and 29% MoM**, respectively [4]. 4. **Market Dynamics**: - The supply growth in March slightly outpaces demand, indicating a potential shift in market dynamics where supply increases may limit price improvements during peak season [4]. - The report notes that lithium names in China are trading stronger than the lithium price itself, driven by potential catalysts like solid-state batteries [5]. Stock Implications - The report provides a **pecking order** for lithium companies based on their performance and market conditions: - **Qinghai Salt Lake Industry**: Buy - **Tianqi Lithium**: Neutral - **Ganfeng Lithium**: Sell [5]. Risks and Considerations 1. **Upside Risks**: - Stronger-than-expected EV sales and better-than-expected ESS battery shipments could drive demand higher [27][29]. - Potential supply disruptions could also impact market dynamics positively [27]. 2. **Downside Risks**: - An increase in lithium supply could lead to lower prices, especially if demand does not meet expectations [27][28]. - A prolonged downcycle in lithium prices could delay recovery in the sector [28][31]. Conclusion - The China lithium market is experiencing significant changes with increased supply forecasts and strong demand growth. However, the balance between supply and demand will be crucial in determining future price movements and investment opportunities in the sector. The report emphasizes the importance of monitoring inventory levels and market dynamics closely to identify potential risks and opportunities.

Financial Data and Key Metrics Changes - For Q4 2024, the company reported net sales of $1.2 billion and adjusted EBITDA of $251 million, with year-over-year EBITDA improvements across all business segments [5][9] - Full year 2024 adjusted EBITDA reached $1.1 billion, consistent with outlook considerations due to productivity and cost improvements, higher volumes, and strong contract performance [5][10] - The company generated $700 million in cash from operations with an operating cash conversion rate exceeding 60%, above the target of 50% [5][20] Business Line Data and Key Metrics Changes - The Energy Storage segment experienced a 26% year-over-year increase in sales volumes, surpassing initial guidance of 10% to 20% growth [5][10] - Adjusted EBITDA improved year-over-year in all three business segments, driven by higher volumes and productivity [11][10] - Specialties 2025 net sales are projected to be between $1.3 billion and $1.5 billion, with adjusted EBITDA of $210 million to $280 million [14] Market Data and Key Metrics Changes - The lithium market pricing scenarios for 2025 include a new $9 per kilogram scenario, updated $12 to $15 per kilogram, and $20 per kilogram scenarios, with improved outlooks across these ranges [7][12] - Electric vehicle registrations increased by 25% year-over-year in 2024, with significant growth in grid storage demand, which rose nearly 50% year-over-year [23][25] - China remains the key driver of global demand, with a 37% year-over-year increase, representing about 65% of market demand [26] Company Strategy and Development Direction - The company is focused on optimizing its conversion network, improving cost and efficiency, reducing capital expenditure, and enhancing financial flexibility [6][29] - Strategic initiatives include placing the Chengdu Lithium Conversion Facility into care and maintenance and shifting capacity at the Zhengzhou facility from hydroxide to carbonate [7][30] - The company aims to achieve breakeven free cash flow in 2025 through cost and productivity improvements [8][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term drivers of the lithium market, emphasizing the importance of lithium in the energy transition [22] - The company anticipates a modest volume-led recovery in specialties, driven by strength in pharmaceuticals, automotive, and oilfield applications [18] - Management highlighted the need for a globally diversified conversion network to adapt to market conditions and maintain competitive advantages [30][34] Other Important Information - The company concluded Q4 with available liquidity of $2.8 billion, including $1.2 billion in cash and cash equivalents [18][19] - The company expects operating cash flow conversion to exceed 80% in 2025, driven by working capital improvements and a $350 million customer prepayment [20][21] Q&A Session Summary Question: Contract mix and long-term agreements - The remaining 50% of sales not on long-term agreements primarily follows spot mechanisms, with no significant recent renegotiations of long-term contracts [42][44] Question: CapEx reduction and resource investments - The CapEx reduction primarily focused on conversion investments, with a more targeted approach on high-quality, low-cost resources [45][46] Question: Market influence of CapEx cuts and maintenance actions - The company does not expect its actions at Chengdu to significantly influence the broader market, as it is a smaller facility [48] Question: Tax guidance for 2025 - The wide range in tax guidance is driven by various scenarios influenced by lithium prices and pre-tax income [49][51] Question: Free cash flow breakeven in 2025 - Achieving breakeven free cash flow depends on executing the plan, with pricing being a potential risk factor [53][54] Question: Realized lithium prices and market conditions - The company does not disclose exact pricing spreads between spot and contract sales [57] Question: Supply curtailments and market dynamics - Approximately 25% of global lithium supply is believed to be underwater, with about half of that curtailed [59] Question: Energy storage capacity under long-term contracts - About 50% of energy storage capacity is under long-term contracts, with the other half being spot contracts [97][98] Question: Grid storage market outlook - The grid storage market is expected to continue growing, with lithium-based solutions becoming more prevalent [90][92]