瑞银-中国锂：已过峰值但被超卖-China Lithium Off the peak but oversold-20260921

a§

GlobalResearch

21September2026

ChinaLithium

Offthepeakbutoversold

CuttingChinalithiumpriceassumptions

FollowingUBSGlobalCommodityteam'scutstoitsgloballithiumpriceassumptions,wefurthercutourChinalithiumpriceassumptiontoRmb120k/t(fromRmb200k/t)for2027Eaccordingtoourdetailedcostcurveanalysisofsupplydemandunderthebasecasescenario(demand/supplyup15%/22%YoY),butstillabovewhat'spricedin(i.e.Rmb100k/t).WethinkthecurrentmarketislikelyoverlyconcernedaboutthepotentialdestockingofChinaBESSbatterywhileignoringthedownsideriskinsupplyattributedbytheanti-corruptioninvestigationinJiangxi.Hence,wecutourChinalithiumstocks'earningsestimatesandpricetargetbutreiterateourBuyratings.

ConcernonChinaESSbatterydestockingremainsakeydownsiderisk

China'sbattery-relatedlithiumdemand(basedoncathode/electrolyteproduction)hasrisen~60%YoYin8M26,outpacingthe~45%YoYgrowthimpliedbyend-marketdemandfromEVsalesandBESSinstallations(Figure4).Oursupplychainanalysisindicateslowtomoderateinventoriesacrosslithiumchemicals,cathodes,batteriesandOEMs,butelevatedinventoriesatBESSintegratorsanddownstreamchannels.ThekeydownsideriskisslowerconversionofBESSprojecttenderingintoinstallations,whichcoulddrivedestockingandweighonbatteryproductionin2027E(seedetailshere).WeforecastBESSbatterydemand,accountingfor~30%oftotallithiumdemand,togrow30%YoYin2027Eversus64%in2026E,reflectingdestockingrisksandahigherbase.Consequently,weexpecttotallithiumdemandgrowthtomoderateto15%YoYin2027E,supportingalithiumpriceofRmb120k/tLCEbasedontheglobalcostcurve.Incontrast,thecurrentmarketispricinginalithiumpriceofRmb100k/tLCE(i.e.18-20xPEonpurelithiumproducers,Figure25),whichimplies~10%lithiumdemandgrowthontheglobalcostcurve.

Chinese-controlledsupplyin2027Emayfacedownsiderisk

UBS'sbasecaseassumes22%YoYgrowthingloballithiumsupplyin2027E,withlimitedincrementaloutputfromJiangxilepidoliteandcontinuedexportsofallZimbabweanspodumeneproduction.However,weseedownsideriskstobothassumptions,includingfurtherdisruptionstoJiangxilepidoliteoperationsamidanti-corruptioninvestigationsanduncertaintyoverZimbabwe's2027exportquotasfollowingitsexportban.Underitsdownsidesupplyscenario,UBSassumesgloballithiumsupplygrowthof10%YoYin2027E.Bycomparison,marketconsensuscurrentlyassumes30%YoYsupplygrowth,effectivelypricinginnodisruptiontoJiangxilepidoliteproduction.

Cuttingearningsandpricetargets,whilemaintainingBuyratings

Basedonourupdatedlithiumpriceforecasts,wecutour2027EearningsestimatesforourChinalithiumcoverageby50-56%andhencecutthepricetargetsbasedonunchangedtargetEV/EBITDAmultiples.WereiterateourBuyratingsonallcoveredstocks(seeFigure1below)aswebelieveourChinalithiumcoveragehasbeenovercorrected.

Figure1:Summaryofourrating,estimateandpricetargetchanges

Equities

China

BasicMaterials

SkyHan

Analyst

sky.han@

+852-37124548

SharonDing

Analyst

sharon.ding@

+852-29716284

RobinChen

AssociateAnalyst

robin.chen@

+852-29718678

LachlanShaw

Analyst

lachlan.shaw@

+61-3-92426387

LeviSpry

Analyst

levi.spry@

+61-3-92426709

JoshuaSpector,CFA

Analyst

joshua.spector@

+1-212-7136188

DimAriyasinghe

Analyst

dim.ariyasinghe@

+61-3-92426385

ChristopherPerrella

Analyst

christopher.perrella@

+1-212-7131443

Source:UBSestimates.Note:Priceasof21September2026.

ThisreporthasbeenpreparedbyUBSSecuritiesAsiaLimited.ANALYSTCERTIFICATIONANDREQUIREDDISCLOSURES,iNcLuDiNGiNFoRmAtioNoNtHEQuANtitAtivEREsEARcHREviEwpuBLisHEDByUBS,BEGiNoNpAGE30.

ChinaLithium21September2026a§2

ChinaLithiumUBSResearch

UBSResearchTHESISMAP

PivoTALQuEsTioNs

WHAT´SPRICEDIN?

UBSVIEW

EVIDENCE

MOSTFAVOREDLEASTFAVORED

QSLI,TianqiLithium,GanfengLithiumA/HN/A

Q:Isdownstreambatteryinventorysignallingdownsiderisksto2027Elithiumdemand?

Yes,primarilyinESS.EVbatteriesremaininanactivedestockingcyclewithlowinventoryrisk.InESS,inventorieshavestartedtobuildagain.WhileChinaBESSshipmentsremainsupportedbyexportsanddomesticBESSbidwinning,slowerconversionfrombidwinningtoinstallationsandpotentialfront-loadingexportsin2026Ecouldtriggerdownstreamdestocking,implyingdownsideriskfor2027Elithiumdemand.Seemoredetailshere.

Q:Isriskinourbase-case2027Elithiumsupplyforecastskewedtotheupsideordownside?

Downside.Initsbasecase,UBSforecasts2027Egloballithiumsupplytorise22%YoY,whereweassumelimitedincrementsinJiangxilepidolitesupplyduetoregulatoryenvironments,whileallZimbabwespodumeneproductionremainsavailableforexport.Weseedownsiderisksfromlower-than-expectedZimbabweexportquotas,tighter-than-expectedrestrictionsonincrementalJiangxisupply,andslowerramp-upsacrossnewlithiumprojectsglobally.Seemoredetailshere.

Q:Whatlithiumcarbonatepriceisimpliedbyoursupply-demandscenariosand2027Ecostcurveanalysis?

OurbasecasepointstoaChinalithiumcarbonatepriceofRmb120,000/t(incl.VAT)orUS$15,617/t(excl.VAT)in2027E.Inourbasecase,weforecastlithiumdemandtogrow15%YoYandsupply22%YoY,implyingatightbalancein2027E.Seemoredetailshere.

WeforecastChinalithiumcarbonatespotpricestoaverageRmb120,000/tin2027E.WebelieveChinalithiumstocksarepricinginalithiumcarbonatepriceofRmb100,000/t(includingVAT)comparedwiththecurrentspotpriceofRmb138,500/t(includingVAT),asreportedbySMMon16September2026.

Basedonourupdatedlithiumpriceforecasts,wecutour2027EearningsestimatesforourChinalithiumcoverageby50-56%,placinguslargelyinlinewithconsensus.WeupdatethepricetargetsforourChinalithiumcoverage–QSLIfromRmb49.80toRmb34.92,Ganfeng-AfromRmb110.45toRmb57.05,Ganfeng-HfromHK$106.86toHK$44.28,andTianqifromRmb93.18toRmb52.13–andreiterateourBuyratingsonallfourstocks.WebelievethecurrentChinalithiumstockshasbeenovercorrected.

Wecarriedoutadetailedanalysisoflithiumdemandandsupplyindifferentscenariosgiventhebigdebateandalsoacomprehensiveanalysisoncashcostcurve.Inourbasecase,weforecastlithiumdemandtogrowby15%YoYandsupplyby22%YoY,implyingatightbalancein2027E.Basedonourcostcurveanalysis,thisbalancecorrespondstoaChinalithiumcarbonatepriceofRmb120,000/t(incl.VAT)orUS$15,617/t(excl.VAT).

Figure2:UBSGlobalPrimaryLithiumCashCostCurve

Source:UBSe,Companyprofiles.

ChinaLithiumUBSResearch

ChinaLithium21September2026a§3

Keydebateondemandside:Arebattery

installationssignallingdownsiderisksto2027Elithiumdemand?

Weseesomedownsiderisktolithiumdemandin2027E,primarilyattributedto1)downstreamdestockingriskofBESSbatteryproducersandsystemintegrators;2)potentially,upstreamlithiumproducers'CAPEXmaystarttooutpacedownstreambatteryproducers.Inourbasecase,weforecastgloballithiumdemandtoincrease15%YoYin2027E,withEVbatterydemandup10%YoYandESSbatterydemandup30%YoY,whereweconsideredthedownstreamESSbatteryproducersandintegratorstodosomedestocking.Inourupsidecase,weassumegloballithiumdemandtoincrease20%YoYin2027E;whileinourdownsidecase,weassumegloballithiumdemandtogrow10%YoYin2027E,whereweconsideranevenbiggerdestocking.

Inventorypuzzlealongthewholelithium-ionbatterysupplychain

Wehaveanalysedtheinventoryalongthewholesupplychainoflithium-ionbatteryfromupstreamlithiummines/convertors,tomidstreamcathodeandelectrolyteproducers,todownstreambatteryproducers,andtointegratorsandESSprojectowners.Wemaintaintheconclusionthattheupstreamtomidstreaminventorylevelisquitelow,thedownstreambatteryproducers'inventorylevelnothigh,whileESSbatteryintegratorsandprojectowners'inventoryisrelativelyhigh.

Figure3:Globalannuallithiumdemandimpliedby

cathodeandelectrolyteproductionvs%shareofimpliedlithiumdemandfromEV,ESSandCEbatteryinstallations

Source:SMM,CNESA,CESA,UBS

Figure5:LithiumfeedstockinventoryinChina(LCEtonsandinventorymonths)

Source:SMM,ChinaCustoms,ChinesePorts,UBS.Note:Lithiumfeedstockincludesconcentrateandlithiumsulphate

Figure4:Chinamonthlylithiumdemandimpliedby

cathodeandelectrolyteproductionvs%shareofimpliedlithiumdemandfromEV,ESSandCEbatteryinstallations

Source:SMM,CNESA,CESA,UBS

Figure6:SMMweeklylithiumcarbonateinventoryinChina(oldsamplebase)

Source:SMM,UBS

ChinaLithium21September2026a§4

Figure7:SMMweeklylithiumcarbonateinventoryinChina(samplebaseupdatedon13May2026)

Source:SMM,UBS

Figure9:GapbetweenChina'slithiumsupply(YoY%)andlithiumdemand(YoY%)vsspotpriceforLi2CO3

Source:SMM,ChinaCustoms,Wind,UBS

Figure11:GlobalLFPcathodeinventoryvsinventorydays

Source:ICCSINO

Figure8:SMMweeklylithiumcarbonateinventoryinChina(samplebaseupdatedon4September2026)

Source:SMM,UBS

Figure10:ChinalithiumchemicalinventorychangevsspotpriceofLi2CO3

Source:SMM,ChinaCustoms,Wind,UBS

Figure12:GlobalNCMcathodeinventoryvsinventorydays

Source:ICCSINO

ChinaLithium21September2026a§5

Figure13:Globalelectrolyteinventoryvsinventorydays

Source:ICCSINO

Figure14:Globalbatteryinventoryvsinventorydays

Source:ICCSINO

ESSbatteryshipmentsaresupportedbyexportsanddomesticsbidwinning.WehavenoticedthewideninggapbetweenChinaBESSinstallationsandBESSbatteryshipments,whichcouldimplydestockingrisks.1)Exports:Alargeportionofthegapcanbeexplainedbyexports,inourview.AccordingtoICCSINO,7M26ChinaBESSbatteryexportswereequivalentto111%ofdomesticBESSbatteryshipments,comparedwith107%in2024and137%in2025.Theexport-to-domesticshipmentratioobservedthisyearisbroadlyconsistentwiththetrendofrisingoverseasdemandoverthepasttwoyears.Weacknowledgesomeriskofexportfront-loadingaheadoftheplannedphase-outofexportVATrebates.2)DomesticBESSbatteryshipmentsandbidwinningremainbroadlyaligned.Forexample,7M26domesticbatteryshipmentsreached281.3GWh,comparedwithBESSbidwinningof261.6GWh,asperICCSINO.However,theconversionofBESSbidwinningintoinstallations,facesdownsiderisks.AccordingtoCESA,7M26ChinaBESSinstallationsreachedonly85.8GWh,equivalentto41%ofbidwinningduringthesameperiod.Thisgapcanbepartiallyexplainedbyseasonalityandleadtimeofbidding,i.e.installationstypicallyaccelerateduringtheQ4.However,wehavealsoobservedprojectdelaysandcancellationsdrivenbyconcernsaroundprojecteconomics.Inparticular,highersystemoperatingcostshaveweighedonprojectIRRs,promptingindustryparticipantstowaitforpolicyadjustments,whichremainsuncertainandcouldcreatedownsideriskstoBESSdemandin2027.

Overall,webelieveEVbatteriesremaininanactivedestockingcyclewithlimitedinventoryrisk.ThegreateruncertaintyliesintheESSsector,whereinstallationsmightcontinuetolagbidwinning,creatingdownsiderisktolithiuminventorydrawdown.

Figure15:GlobalESSBatteryProductionvsInstallationGap(Monthly)

Source:SMM,ICCSINO,RhoMotion,UBS

Figure16:ChinaESSBatteryProductionvsShipmentGap(Monthly)

Source:SMM,UBS

ChinaLithium21September2026a§6

Figure17:ChinaESSBatteryTotalShipmentvsChinaESSBatteryExports+ChinaBidWinningofESSBattery

(Monthly)

Source:SMM,CABIA,ICCSINO,UBS

Figure19:Monthlylithiumdemandimpliedbycathodeandelectrolyteproductionvs%shareofimpliedlithiumdemandfromEVproduction,ESSbidding

Source:CPCA,ChinaCustoms,SMM,UBS

Figure18:ChinaESSBidWinningvsChinaESSInstallation(Monthly)

Source:ICCSINO,

Figure20:Chinaelectricpassengervehicleinventoryvsinventorydays

Source:CPCA,ChinaCustoms,SMM,UBS

CAPEXexpansionofupstreamanddownstream

AsofQ226,weseethedownstreambatteryproducers'CAPEXtooutpacetheupstreamlithiumproducers.However,recently,wehaveseenseveralheadlinessuggestingthatthefutureexpansionofBESSbatterywillbeconstrainedduetoanti-involution.Whileatthecurrentlithiumprice,theupstreamlithiumproducersarestillincentivizedtoexpand.Hence,wemaypotentiallyseeupstreamlithiumproducers'CAPEXoutpacethatofthedownstreambatteryproducers.

Figure21:CapexgapbetweenChina'sbatteryproducers(YoY%)andlithiumproducers(YoY%)duringthesameperiodvs.spotpriceforLi2CO3

Source:Companydata,Wind,SMM,UBS

Figure22:CapexgapbetweenChina'sbatteryproducers(YoY%)andlithiumproducers(YoY%),withChinabatteryproducers'capexlead1yearvsspotpriceforLi2CO3

Source:Companydata,Wind,SMM,UBS

ChinaLithium21September2026a§7

Keydebateonsupplyside:Isriskinourbase-case2027lithiumsupplyforecastskewedtotheupside

ordownside?

Wereviewandupdateourglobalsupply,butwouldliketohighlightthedownsiderisksinour2027Esupplyforecasts.

Inourbasecase,weforecast2027Egloballithiumprimaryandsecondarysupplyof2,626ktLCE,up22%YoYor468ktLCEincremental,assumingsomeimpactonvolumefromJiangxilepidoliteoperationsandnomaterialdisruptionofZimbabwe'sexports.AkeyassumptioninourforecastsconcernssupplyfromJiangxi,similartowhathappendedinShanxiforcokingcoalsupplydisruption.Giventhecurrentminingcomplianceandapprovalenvironment,weassumeregulatoryrequirementscontinuetobeappliedconservativelyandthereforeweassumeJiangxilepidolitesupplyflatYoYin2027Einthebasecasescenario.Atthesametime,ourbasecaseassumesthatallspodumeneconcentrateproducedinZimbabweremainsavailableforexportin2027,withnomaterialimpactfromexportbanonspodumeneconcentrate.

Whilemarketdiscussionshaveincreasinglyfocusedonthevolumeofpipelineprojectsscheduledforcommissioningin2027,webelievetherisktosupplyremainsskewedtothedownside.Inourdownsidescenarioforsupply,weassumegloballithiumprimaryandsecondarysupplytobe2,359ktLCE,up10%YoYor201ktLCEincremental,assumingthat1)Jiangxilepidoliteoperationsarelargelyoffduetotheinvestigationbyanticorruptionauthorities;and2)Zimbabweangovernmentstrictlyconductsanexportbanbasedontheconstructionprogressofdownstreamlithiumsulphateplant.

Bycontrast,inourupsidescenarioforsupply,supplycouldincreaseto2,846ktLCE,up30%YoYor678ktLCEincremental,whichassumes1)productioninJiangxinormalises,allowingcurrentlyconstrainedsupplytore-enterthemarket;2)Zimbabweanproducersareabletoexporttheirfullproductionvolumes;and3)allmajorpipelineprojectsaredeliveredonschedule,rampingupefficientlyandbecomingeffectivesupplymorequicklythanexpected.However,newcapacityisstillunlikelytobeavailableatfullrun-ratefromthebeginningoftheyear,withmostprojectsrequiringagradualramp-upprocess.

Whatlithiumpriceisimpliedbyoursupply-

demandscenariosand2027Ecostcurveanalysis?

OurbasecasepointstoaChinalithiumcarbonatepriceofRmb120,000/t(incl.

VAT)orUS$15,617/t(excl.VAT)in2027E

Wederiveourlithiumpriceforecastsbycombiningoursupply-demandscenarioswithourgloballithiumcostcurve.Inourbasecase,weforecastlithiumdemandtogrowby15%YoYandsupplyby22%YoY,implyingatightbalancein2027E.Basedonourcostcurveanalysis,thisbalancecorrespondstoaChinalithiumcarbonatepriceofRmb120,000/t(incl.VAT)orUS$15,617/t(excl.VAT).

Figure23:UBSGlobalPrimaryLithiumCashCostCurve(Basecaseforboth

supplyanddemand)

Source:UBSe,Companyfiles

ChinaLithium21September2026a§8

Downsidecase:pricemovesclosertothecost-curvefloor

Underourdownsidecasescenario,weassumeweaker-than-expectedESSbatterydemandhencedownstreamdestocking,aswellasstronger-than-expectedsupplygrowth.Weassumelithiumdemandtoincreaseat10%YoYandsupplytogrowat30%YoY,resultinginamarketsurplusof233ktLCE.

●Demand:Weassumeweaker-than-expectedESSbatterydemand,reflecting:1)amoderationinBESSexportdemandfollowingthisyear'sfront-loading;and2)domesticBESSinstallationsfallingmateriallyshortofcurrentbidwinninglevels,leadingtoslower-than-expectedinventorydrawdownacrossthelithiumvaluechain.

●Supply:Weassume:1)productioninJiangxinormalisesandthecurrentlyconstrainedsupplywillre-enterthemarket;2)Zimbabweanproducersareabletoexporttheirfullproductionvolumeswithoutanymaterialconstraintsfromexportquota;and3)majorpipelineprojectscurrentlyunderconstructionaredeliveredonschedule,rampupefficientlyandbecomeeffectivesupplyfasterthanexpected.

Undersuchconditions,priceswouldmovefurtherdownthecostcurvetowardsmarginalcostproducers,implyingaChinalithiumcarbonatepriceofRmb78,761/t(incl.VAT)orUS$10,250/t(excl.VAT)in2027E.

Upsidecase:Supplydisappointmentscouldgenerateupsidetoprices

Underourupsidecasescenario,weassumestronger-than-expectedESSbatterydemandandmoreconstrainedsupplygrowth.Weassumelithiumdemandtogrow20%YoYandsupplytoincrease10%YoY,resultinginamarketdeficitof479ktLCE.

●Demand:Weassumestronger-than-expectedESSbatterydemand,reflecting:1)sustainedstrengthinBESSexportdemanddespitethisyear'sfront-loading;and2)domesticBESSinstallationsacceleratingandconvertingalargerproportionofbidwinningintoactualdeployments,leadingtofaster-than-expectedinventorydrawdownacrossthelithiumvaluechain.

●Supply:Weassume:1)regulatoryconstraintscontinuetolimitincrementalsupplyfromJiangxi,preventingcurrentlyconstrainedsupplyfromre-enteringthemarket;

2)Zimbabweanexportvolumesfallbelowexpectationsduetolower-than-expectedexportquotaallocation;and3)majorpipelineprojectsexperiencedelaysandslowerramp-ups,resultingineffectivesupplyadditionsapproximately10%belowourbase-caseassumptions.

Undersuchconditions,higher-costsupplywouldberequiredtobalancethemarket,implyingaChinalithiumcarbonatepriceofRmb170,000/t(incl.VAT)orUS$22,124/t(excl.VAT)in2027E.

Figure24:Lithiumpriceindicationbasedonoursupply-demandscenarioanalysiswithcostcurves

Source:UBSe,Companyfiles

ChinaLithium21September2026a§9

Chinalithiumcompanies'earningssensitivityto

lithiumprice

GivenChinalithiumcompanies'earningsforecastsareverysensitivetolithiumpriceassumptions,wehaveconductedasensitivityanalysis.Intheupsidescenario,weexpectlithiumcarbonatepricestobeRmb170k/tLCEin2027E.Inthedownsidescenario,weexpectlithiumcarbonatepricestobeRmb78.8k/tLCE.

Figure25:SensitivityofChina'slithiumcompanies'netprofitattributableto

shareholdersandimplied2027EPEsatcurrentsharepricestolithiumprices

Source:UBSestimates.Note:Sharepriceasof21September2026.

ChinaLithium21September2026a§10

QinghaiSaltLakeIndustryUBSResearch

QinghaiSaltLakeIndustry(QSLI)

WecutournetprofitforecastsforQSLIin2027/28Eby50%/52%,mainlydrivenby:1)ourlowerlithiumpriceexpectationsforChinain2027and2028basedonourcostcurveanalysisundertherevisedsupply-demandscenario,and2)ourlowerlithiumchemicalssalesvolumeassumptionsforQSLI,duetoslower-than-expectedprogressinacquisition,thoughtheexpectationofreaching200ktLCEproductionby2030Eremainsunchanged.Drivenbylowerearnings,welowerourpricetargetfromRmb49.80toRmb34.92,basedonatarget10x2027EEV/EBITDA.ThetargetEV/EBITDAmultipleisunchanged.WereiterateourBuyrating.OurpricetargetofRmb34.92impliesanundemanding16x2027EPE.

Figure26:ChangesinourkeyassumptionsandestimatesforQSLI

Source:UBSestimates

Inadditiontoouranalysisofourcoverage'searningssensitivitytolithiumprices,wealsoanalysethesensitivityofQSLI'searningstopotashprices,whichisalsoacriticalearningsdriverforthecompany.

Figure27:QSLI–sensitivityof2027Enetprofitattributabletoshareholdersandimplied2027EPEtolithiumandpotashprices

Source:UBSestimates.Note:Theimplied2027EPEisbasedonQSLI'ssharepriceasof21Sep2026.

ChinaLithium21September2026a§11

Figure28:QSLI'sEV/EBITDAvsChina'slithiumcarbonatespotprices

Source:Wind,SMM,UBSestimates

Figure29:QSLI'sEV/EBITDAvspotashexplantprices

Source:Wind,UBSestimates

Figure30:QSLI'sEV/EBITDAvsEBITDAYoYgrowth

Source:Wind,UBSestimates

QinghaiSaltLakeIndustryUBSResearch

ChinaLithium21September2026a§12

UpsiDE/DowNsiDESpEcTRum

QinghaiSaltLake

IndustryistradingatRmb24.96asof21Sep.

Valuedrivers(2027E)

Chinalithiumcarbonateprice(incl.VAT)

Chinapotashprice(incl.VAT)

QSLIlithiumcarbonatevolume

TargetEV/EBITDAfor2027E

Rmb39.55upside

Rmb170,000

Rmb3,050100kt9x

Rmb34.92base

Rmb120,000

Rmb3,050100kt10x

Rmb23.12downside

Rmb80,000

Rmb2,500100kt10x

Source:UBSestimates

Risktothecurrentsharepriceisskewed(7.9:1)totheupside.

QinghaiSaltLakeIndustryistradingatRmb24.96(asof21Sep).

UPSIDE(Rmb39.55):Inourupsidecase,weassumestronger-than-expectedlithiumdemandgrowthandmoreconstrainedsupplyexpansionin2027E.Specifically,weassumelithiumdemandgrows20%YoYwhilesupplyincreases10%YoY,resultinginamarketdeficitof479ktLCE.Undersuchconditions,higher-costsupplywouldberequiredtobalancethemarket,implyingaChinalithiumcarbonatepriceofRmb170,000/t(includingVAT)in2027E.WealsoassumeChinapotashpricesaverageRmb3,050/t(includingVAT)andQSLIlithiumcarbonatesalesvolumeof100ktin2027.OurupsidevaluationofRmb39.55isbasedon9x2027EEV/EBITDA.

BASE(Rmb34.92):Inourbasecase,weassumelithiumdemandgrows15%YoYandsupplygrows22%YoYin2027E,implyingatightmarketbalance.Basedonourgloballithiumcost-curveanalysis,thisbalancecorrespondstoaChinalithiumcarbonatepriceofRmb120,000/t(includingVAT)in2027E.WealsoassumeChinapotashpricesaverageRmb3,050/t(includingVAT)andQSLIlithiumcarbonatesalesvolumeof100ktin2027.Ourbase-casevaluationofRmb34.92isbasedon10x2027EEV/EBITDA.

DOWNSIDE(Rmb23.12):Inourdownsidecase,weassumeweaker-than-expectedlithiumdemandgrowthandstronger-than-expectedsupplyexpansionin2027E.Specifically,weassumelithiumdemandgrows10%YoYwhilesupplyincreases30%YoY,resultinginamarketsurplusof233ktLCE.Undersuchconditions,priceswouldmoveclosertotheindustrycost-curvefloor,implyingaChinalithiumcarbonatepriceofRmb80,000/t(includingVAT)in2027E.WealsoassumeChinapotashpricesaverageRmb2,500/t(includingVAT)andQSLIlithiumcarbonatesalesvolumeof100ktin2027.OurdownsidevaluationofRmb23.12isbasedon10x2027EEV/EBITDA.

TianqiLithiumUBSResearch

TianqiLithium

Wecutourforecastsof2027/28EnetprofitattributabletoshareholdersforTianqiLithiumby55%/