Daiwa Upgrades Ganfeng Lithium, Hikes Target 60% on Supply Shortage

Edgen Stock·Mar 30 2026, 04:52

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Key Takeaways

Daiwa reversed its multi-year bearish stance on Ganfeng Lithium, issuing a significant upgrade and price target increase. The revision is based on an anticipated global lithium supply deficit starting in 2026, driven by production constraints and rising demand, which prompted the bank to dramatically raise its earnings forecasts for the producer.

Rating Upgrade: Daiwa lifted Ganfeng Lithium (01772.HK) from Underperform to Outperform, raising its price target by over 60% to $85 from $53.
Supply Shortage: The forecast is driven by an expected global lithium supply shortage in 2026, caused by a Zimbabwe export ban and slower-than-expected production from a key CATL mine.
Earnings Revision: Reflecting higher anticipated lithium prices, Daiwa increased its 2026-2027 earnings per share (EPS) forecasts for Ganfeng by a staggering 213% to 583%.

Daiwa Reverses Stance, Lifts Ganfeng Target by 60%

In a significant reversal, Daiwa upgraded Ganfeng Lithium (01772.HK) from Underperform to Outperform, marking its first positive rating on the company after maintaining a bearish view through 2023-2025. The investment bank raised its price target by over 60% to $85 from a previous $53. This new valuation is based on a target price-to-earnings (PE) ratio of 17.3x, a discount to Ganfeng's A-shares, which Daiwa attributes to the lower liquidity of its H-shares listed in Hong Kong.

Global Supply Deficit to Emerge by 2026

The upgrade stems from a revised outlook for the global lithium market, where Daiwa now forecasts a supply shortage emerging in 2026. This tightening supply is primarily attributed to two key factors: the early enforcement of Zimbabwe's lithium ore export ban and the continued slower-than-expected resumption of CATL's lepidolite mine. This view aligns with broader market analysis, as other firms like UBS also highlight ongoing deficits and project spodumene prices could reach US$4,000 per tonne by late 2026 or early 2027 due to strong demand from electric vehicles (EVs) and battery energy storage systems (BESS).

EPS Forecasts Skyrocket Over 200% on Price Outlook

To reflect the expectation of significantly higher lithium prices, Daiwa has dramatically increased its earnings forecasts for Ganfeng Lithium. The bank lifted its earnings per share (EPS) projections for 2026 and 2027 by 213% and 583%, respectively. This massive upward revision signals strong confidence that Ganfeng is positioned to capture substantial financial upside from the anticipated supply-demand imbalance, translating higher commodity prices directly into improved profitability for investors.