"Big Banks" Bank of America Securities: Ganfeng Lithium's first-quarter profit far exceeds expectations, raising target price to 92 yuan

Bank of America Securities published a research report indicating that the lithium market in China was roughly in balance in the first four months of this year, with lithium carbonate prices maintained at RMB 150,000 to RMB 160,000 per ton, inventory stable at around 100,000 tons, and inventory days reduced to about 28 days. Driven by demand from electric vehicles and energy storage batteries, overall demand remains strong. Bank of America Securities has raised its forecast for lithium carbonate prices in China this year from RMB 140,000 per ton to RMB 145,000 per ton.

In addition, the bank stated that Ganfeng Lithium (01772.HK) is expected to achieve a net profit of RMB 1.6 billion to RMB 2.1 billion in the first quarter, reaching 31% of the bank's full-year forecast, significantly exceeding expectations. The strong performance is mainly attributed to robust lithium demand and a significant rebound in prices; increased upstream lithium resource capacity, and growth in lithium and battery business sales. The bank has accordingly raised its profit forecast for the group in 2026 by 13% to RMB 6.9 billion, and the profit forecast for 2027 by 27% to RMB 7.3 billion.

Based on higher lithium price forecasts, the bank has raised its profit forecasts for Tianqi Lithium (09696.HK) by 10% and 22% for the next two years, to RMB 5.4 billion and RMB 5.6 billion, respectively, and has raised its target price for its Hong Kong stock from RMB 57 to RMB 67.

The following are Bank of America Securities' ratings and target prices for the relevant industries:

Stock | Investment Rating | Target Price (HKD)

Ganfeng Lithium (01772.HK) | Buy | 80 HKD -> 92 HKD

Ganfeng Lithium (002460.SZ) | Buy | 85 RMB -> 98 RMB

Tianqi Lithium (09696.HK) | Buy | 57 HKD -> 67 HKD

Tianqi Lithium (002466.SZ) | Buy | 61 RMB -> 73 RMB

Huayou Cobalt (603799.SH) | Buy | 95 RMB -> 90 RMB