Daiwa Upgrades Ganfeng Lithium to "Outperform" with Target Price Raised to HK$85

Stock News03-30

Daiwa has released a research report upgrading its investment rating on Ganfeng Lithium (01772) from "Underperform" to "Outperform" in one move, citing improvements in the global lithium supply-demand balance. The target price has been significantly raised from HK$53 to HK$85, marking the first positive shift after maintaining a bearish stance from 2023 to 2025. The firm anticipates a global lithium supply shortage in 2026, primarily due to the early implementation of Zimbabwe's lithium export ban and the slower-than-expected resumption of production at CATL's lepidolite mine. Daiwa has increased its earnings per share forecast for Ganfeng Lithium by 213% to 583% for 2026–2027, reflecting higher lithium price assumptions. The valuation method has been switched to a price-to-earnings ratio, applying a target P/E of 17.3x, which is lower than the 20x for Ganfeng Lithium's A-shares (002460.SZ) to account for the lower liquidity of H-shares. Daiwa's lithium price forecast for 2026–2027 is set at RMB 130,000 to 145,000 per ton, more conservative than the market's optimistic expectation of RMB 200,000, mainly due to concerns over rising production in Africa and China.

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