"Kangbong Lithium, Strong Performance Expected Amid Rising Lithium Prices"

[Asia Economy Reporter Minji Lee] Gangbong Lithium's streak of strong performance is expected to continue. This is because both lithium prices and sales volume are rising simultaneously.

According to the industry on the 3rd, Gangbong Lithium recently announced that its Q4 revenue reached 4.11 billion yuan, marking a 152% growth compared to the same period last year. Net profit attributable to controlling shareholders surged 297% to 2.76 billion yuan. This marks the highest performance for three consecutive quarters.

Baek Seung-hye, a researcher at Hana Financial Investment, said, "During the same period, non-recurring gains increased by 175% quarter-on-quarter, contributing to the record-high quarterly net profit, including a significant increase in the stock valuation gains of Pilbara, a lithium mining company held by the firm." She added, "Excluding non-recurring gains, net profit was 1.48 billion yuan, recording the highest quarterly figure despite a high base in the previous quarter with a 150% increase."

During the same period, spot prices of lithium hydroxide and lithium carbonate, which showed a sharp rise, increased by 61% and 87% respectively compared to the previous quarter. This led to renegotiation of prices for more than half of the long-term lithium hydroxide contracts, raising the average selling price, and sales volume also increased based on solid demand. The price of spodumene in Q4 surged 117% quarter-on-quarter, causing cost pressure, but profitability decline was mitigated by utilizing existing inventory. The company-wide gross profit margin (GPM) in Q4 was 47%, higher than the previous record quarterly high of 46% in Q1 2018.

Gangbong Lithium is also expected to record its highest-ever performance in Q1 this year. The company’s provisional cumulative sales announced for February are forecasted at 3.6 billion yuan, with net profit at 1.4 billion yuan, representing a 260% and 300% increase respectively compared to the same period last year.

Active investment momentum is enhancing Gangbong Lithium’s investment appeal. Currently, the company is constructing secondary battery plants with 5GWh capacity in Zhangshi and 10GWh in Chongqing. At the same time, it is actively acquiring stakes in global lithium mines. Jung Haneul, a researcher at Samsung Securities, explained, "These moves are ultimately aimed at vertical integration from raw materials to secondary batteries," adding, "Rather than a strategic shift, it is a choice to improve the stability of raw material procurement and material supply."

Expansion of production capacity is also positive. Gangbong Lithium’s production capacity stands at about 28,000 tons of lithium carbonate and 70,000 tons of lithium hydroxide. According to the company’s plan, production capacity will be expanded to 300,000 tons by 2025. Researcher Jung Haneul said, "Active expansion of production capacity in the rapidly growing electric vehicle industry will lead to Gangbong Lithium’s future market dominance."

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