Ganfeng Lithium Group Co Ltd Class A

002460: XSHE (CHN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	¥36.20	Knwbzc	Ljqznyp

Ganfeng’s Strong Q4 As Guided; Cut FVE to HKD 56/CNY 48.50 on Lower Lithium Spot Prices

Vincent Sun

Mar 30, 2023

Narrow-moat Ganfeng's strong fourth-quarter net profit growth of 107% year over year was in line with its preliminary announcement. Significant profit growth was mainly due to record lithium prices, given robust demand for lithium compounds from new energy vehicle production. However, with year-to-date average lithium prices plunging more than 20% from a record fourth quarter last year, we reduce our fair value estimate to HKD 56 (CNY 48.50) from HKD 75 (CNY 66), which implies 2023 P/E ratio of 5.8 times. At the current price, H-shares are trading at 3-star territory, fairly valued, in our view.

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