Tianqi Lithium Industries Inc Class A

002466: XSHE (CHN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	¥81.40	Zhcrsw	Fgzrpqjm

Tianqi’s Strong Preliminary Results Reinforce Our Positive View; HKD 102 FVE Maintained

Vincent Sun

Jan 19, 2023

Narrow-moat Tianqi reported stronger-than-expected preliminary full-year results, with the midpoint of the company’s 2022 net profit 7% above our full-year estimate. Significant profit growth was mainly due to robust demand for lithium compounds for new energy vehicles, or NEVs, and the surge in lithium price. We maintain our fair value estimate at HKD 102 (CNY 92), which implies a 2023 price/earnings ratio of 6.5 times. The H-shares, at 36% discount to its A-shares and 37% discount to our fair value estimate, are attractive, in our view, but the A-shares are fairly valued.

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