Summary of Tianqi Lithium Conference Call Company Overview - **Company**: Tianqi Lithium (9696.HK) - **Industry**: Lithium production and chemicals - **Current Price**: HK$40.66 - **12-Month Price Target**: HK$21.50 - **Downside Potential**: 47.1% Key Financial Highlights - **1H25 Net Profit**: Rmb87 million, EPS of Rmb0.053 per share, compared to a net loss of Rmb5.20 billion in 1H24 [1] - **Recurring Net Loss**: Rmb209 million, improved from Rmb3.07 billion in 1H24 [1] - **Interim Dividend**: Nil for 1H25, same as last year [1] - **Market Capitalization**: HK$66.7 billion [6] - **Enterprise Value**: HK$84.0 billion [6] Earnings Estimates Revision - **Earnings Estimates**: Revised down by 6-48% for 2025-27E due to higher minorities, partially offset by higher gross profit from lithium ore and chemicals [2] - **Gross Profit (GP) Estimates**: Revised up by 4-15% for 2025-27E [22] Industry Insights - **Lithium Pricing**: Recent supply disruptions in China are expected to support spot lithium carbonate prices above current domestic marginal costs [2] - **Global Supply Risks**: The risk on current spot prices, which are 39% above the bottom in June, is viewed as downside due to excess global capacity [2] - **Valuation Analysis**: Bottom-of-the-cycle valuation suggests a theoretical valuation of Rmb16.0 per share at US$10.5k/t-LCE, or Rmb20.8 per share at US$16.0k/t-LCE [2][34] Revenue Breakdown - **Lithium Ore**: Contributed 67% of total gross profit; revenue down 7% YoY but 17% above estimates [23] - **Lithium Compounds**: Contributed 33% of total gross profit; revenue decreased by 36% YoY, inline with estimates [24] Operational Metrics - **Operating Cash Flow**: Rmb1.82 billion in 1H25, down 19% YoY [26] - **Free Cash Flow**: Remained negative at Rmb1.23 billion [26] - **Net Gearing**: Increased to 19% in 1H25 from 16% at the end of 2024 [27] Risks and Challenges - **Key Risks**: 1. Higher lithium product prices 2. Project execution risk 3. Raw material purchase risk 4. Uncertainty in government policy affecting EV adoption 5. Currency and country risks related to overseas assets 6. Slower growth in EV battery recycling 7. Positive outcomes from SQM Atacama renewal [29][36] Conclusion - **Rating**: Maintain Sell rating for Tianqi Lithium with revised 12-month target prices at HK$21.5/Rmb23.0 [2][35]

Summary of Ganfeng Lithium Earnings Review Company Overview - **Company**: Ganfeng Lithium (1772.HK) - **Market Cap**: HK$62.5 billion / $8.0 billion - **Enterprise Value**: HK$107.1 billion / $13.7 billion - **Industry**: Basic Materials, specifically lithium production Key Financial Results - **1H25 Performance**: - Net loss of Rmb536 million, or loss per share of Rmb0.266, compared to a net loss of Rmb759 million in 1H24 [1] - Recurring net loss of Rmb442 million, down from a positive recurring profit in 1H24 [1] - Total revenue decreased by 13% year-over-year to Rmb8.3 billion, 19% below estimates [25] - Gross profit of Rmb890 million, down 16% year-over-year and 30% lower than estimates [26] Pricing and Sales - **Lithium Pricing**: - Realized ASP for lithium hydroxide was US$7,942/t in 1H25, 13% below expectations [25] - Realized ASP for lithium carbonate was US$8,606/t in 1H25, down 32% year-over-year [37] - **Sales Volume**: - Lithium compound sales volume was 8% below estimates, with a significant drop in realized ASP contributing to lower revenue [25] Earnings Revisions - **2025E Earnings**: Recurring earnings cut by 28% due to lower realized ASP for lithium hydroxide and lower sales volume [2] - **2026-27E Earnings**: Revised up by 12-44% due to: 1. Lower production costs for integrated projects [2][23] 2. Higher self-sufficiency in spodumene supply [2][23] 3. Increased battery profit from new ESS plant operations [2][23] Industry Insights - **Market Dynamics**: - Recent supply disruptions from China are expected to support spot lithium carbonate prices [2] - Global excess capacity poses risks to current spot prices, which are 39% above the bottom in June [2] Valuation Analysis - **Target Prices**: - Revised 12-month price targets to HK$28.00 and Rmb30.50, down from HK$19.00 and Rmb21.40 [18][32] - **Valuation Metrics**: - Bottom-of-the-cycle valuation suggests a theoretical valuation of Rmb18.4/share at a spot lithium carbonate price of US$10.5k/t-LCE [2] - Current share price is HK$30.8/share for H and Rmb38.3/share for A [2] Risks - **Key Risks Identified**: 1. Fluctuations in lithium product prices [33][34] 2. Project execution risks [33][34] 3. Raw material purchase risks [33][34] 4. Policy risks affecting EV adoption [33][34] 5. Currency and country risks related to overseas assets [33][34] Operational Metrics - **Cash Flow**: - Operating cash flow declined by 92% year-over-year to Rmb300 million in 1H25 [29] - Free cash flow remained negative at Rmb1.9 billion [29] - **Balance Sheet**: - Net gearing increased to 73% by the end of 1H25, up from 64% at the end of 2024 [29] Conclusion - Ganfeng Lithium's performance in 1H25 was below expectations, primarily due to lower lithium prices and sales volumes. The company is adjusting its earnings forecasts for the coming years while navigating significant market risks and operational challenges. The revised target prices reflect a cautious outlook amid ongoing industry volatility.