"Kangbong Lithium, Strong Performance and Stock Price Expected to Continue in the Second Half"

Stock Price Rises 36% This Month
Positive Impact from Global Electric Vehicle Sales Increase

[Asia Economy Reporter Minji Lee] As Gangbong Lithium is expected to deliver results exceeding market expectations for the first half of the year, there are forecasts that its stock price will continue to rise due to increased lithium demand driven by the expansion of global electric vehicle sales.

According to the Shenzhen Stock Exchange on the 18th, Gangbong Lithium's stock price rose about 36% from 121.090 yuan to 165.000 yuan since the beginning of this month. This reflects expectations for improved second-quarter earnings as electric vehicle demand remains strong.

Gangbong Lithium, the largest mining company in China simultaneously listed on the Shenzhen Stock Exchange and the Hong Kong Stock Exchange, has been developing all-solid-state batteries since 2016. The company's expected net profit for the second quarter is analyzed to grow up to 656% year-on-year, reaching 800 million to 1.1 billion yuan. This is expected to significantly exceed the first-quarter forecast range of 300 million to 700 million yuan.

The higher forecast for second-quarter net profit is due to rising lithium prices and increased investment value in lithium mining companies held by the company. As of the end of last month, the price of lithium hydroxide in China rose 27% compared to the previous quarter, and lithium carbonate prices have remained high since last year. The stock price of Pilbara, an Australian lithium mining company in which the company has equity investment, rose about 40% in the second quarter.

The increase in demand for secondary batteries for eco-friendly vehicles and energy storage systems (ESS) is expected to drive global lithium demand and boost the company's performance. In June last year, China’s electric vehicle sales reached 230,000 units, a 172% increase compared to the same period the previous year. The electric vehicle penetration rate was about 15%. By brand, BYD recorded the highest sales with 41,000 units (17% market share), followed by Tesla with 33,000 units (14%), and Shanghai GM Wuling with 30,000 units (13%). Juyoung Park, a researcher at Kiwoom Securities, said, “Although the growth rate of sales is expected to slow down due to the high base of a 74% increase in electric vehicle sales in the second half of last year compared to the same period the previous year, considering that demand is usually higher in the second half, the growth trend of the Chinese electric vehicle market is expected to continue this year.”

Supply is also slowing, and tight lithium supply and demand are expected to continue until 2025. Cheolgun Jo, a researcher at NH Investment & Securities, said, “Supply growth is slow due to delays in expanding production at mines in South America caused by the COVID-19 pandemic,” adding, “Based on better financial soundness and excellent fundraising capabilities compared to local competitor Tianqi Lithium and global competitors, the company is expected to show strong earnings growth.”

Looking at the stock price trend, Gangbong Lithium is expected to experience increased volatility in the short term due to the rapid rise in its stock price. This is because the price-to-earnings ratio (PER) is at the upper end of the band due to the sharp increase in stock price. Researcher Juyoung Park said, “Although the earnings momentum based on solid electric vehicle demand and strong lithium prices is expected to continue, increased volatility is anticipated due to the short-term rapid rise in stock price.”

This content was produced with the assistance of AI translation services.