Morgan Stanley: Tianqi Lithium's Q3 Preliminary Net Profit Meets Expectations, Maintains "Overweight" Rating

Stock News10-22

Morgan Stanley has released a research report stating that Tianqi Lithium (09696) announced preliminary net profit for the first nine months ranging between RMB 5.1 billion and RMB 6 billion, compared to RMB 180 million in the same period last year; recurring net profit ranged between RMB 5 billion and RMB 5.9 billion; the firm maintains its "Overweight" rating with a target price of HKD 44.3.

The firm estimates that Tianqi Lithium's third-quarter net profit ranged between RMB 860 million and RMB 1.76 billion, compared to RMB 2.37 billion in the second quarter, with the median of RMB 1.3 billion in line with the firm's expectations.

The firm attributes the quarter-on-quarter slowdown to declining lithium prices, which fell by RMB 23,700 per tonne on a quarterly basis, and notes that lithium prices declined faster than spodumene, which could also affect processing margins during a downturn cycle.

The firm expects this headwind to persist into the fourth quarter, with lithium prices falling by RMB 19,500 per tonne on a quarter-to-date basis.

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