After three months, hundreds of billions of lithium salt faucets rise again by the limit! Can the surge in lithium prices bring back the spring of valuation repair?

In early trading today, the gem index rebounded by more than 1%, the salt lake lithium plate set off a rising and stopping trend, Donghua Technology and Zhaoxin shares were closed one after another in the afternoon, and the most eye-catching thing in the plate was the strong limit of 140 billion market capitalization of Tianqi lithium industry. in early trading, the net inflow of main funds exceeded 1.5 billion.

This is the first time that the lithium salt leader Tianqi lithium industry has risen by the limit for the first time in three months. With the overall pullback of the highly valued new energy sector in the fourth quarter of last year, Tianqi lithium industry retreated more than 20% in one quarter. Last week, its share price reached a new low of nearly 60 days. On the news side, it is said that the production of Tianqi lithium industry Australia Quinana lithium hydroxide project has been postponed. In this regard, the relevant person in charge of Tianqi lithium industry told the media that the project is in normal trial operation. There was no delay at the investor exchange meeting of the project side.

Another piece of news that has a more profound impact on the market is that Chile's Constituent Assembly recently passed a preliminary proposal aimed at promoting the nationalization of copper, lithium and other strategic assets, which may affect Tianqi lithium industry's rights and interests in local lithium resources. Tianqi lithium industry official said that the nationalization of (Chile's lithium mine) has not yet been actually landed. Previously, the company has signed a contract with the local government and has been granted a lithium resource quota until December 31, 2030, which will not be changed. In addition, assuming that the Chilean lithium nationalization policy is on the ground, the company needs to give a specific plan for what to do with the mining stake acquired locally.

Even since the weakening of the new energy sector in the secondary market, the dispute over the supply of lithium ore has never stopped. Tesla signed a new lithium ore purchase order with Australian lithium miners on Wednesday and will gradually purchase 100,000 metric tons of (DMT) lithium concentrate from Liontown Resources from 2024.

On the same day, four domestic new energy vehicle battery supply chain giants "met" Yuxi, Yuntianhua, Enjie shares, Yiwei LiNeng, Huayou Holdings and Yuxi City signed a cooperation agreement on the new energy battery industry chain project, which is divided into three phases. the total investment of the first two phases of the project reached 51.7 billion yuan.

Huaxi Securities said that as the upstream raw materials necessary for the vigorous development of electric vehicles for a long time in the future, countries have transferred lithium resources to national strategic resources, which means that overseas acquisitions will not only be affected by previous geopolitical influences. it will also be affected by the concerns about the future industrial development of various countries, and the acquisition of overseas lithium resources will become more difficult than before, and at the same time, it will also affect the release rate of global short-and medium-term lithium production. The price of lithium salt may remain high for at least two years in order to stimulate and accelerate the process of global resource development.

Due to the problems of the production line construction cycle and the disturbance of the epidemic situation, it continues to affect the supply of lithium resources around the world, and the downstream demand continues to increase. Since the middle of November 2021, the lithium price has continued to rise and break through the 400000 yuan mark, but the scramble for goods by downstream enterprises continues.

Taking into account the epidemic and labor shortages affecting concentrate supply, Citic Securities expects lithium prices to exceed $3000 a tonne in the first half of 2022.

According to the summary of SMM, data of listed companies and Huaxin Securities, in 2022, the increment of domestic lithium mine supply is about 108900 tons, and that of salt lake lithium extraction is 8.1 tons, which is still not small compared with the overseas supply increment. At the same time, due to the continuous promotion of global low-carbon emission reduction, the demand for new energy construction makes the demand for lithium resources high.

Guotai Junan Nonferrous team analysts Yu Jiayi, Ning Ziwei and others said on the conference call that according to the average price of 350000 yuan, the dynamic PE of some companies with increased self-supply rate in the industry has dropped to about 8 in 2022, even if the industry is valued according to the cycle, it is still undervalued. And prices are stable and high or further higher this year and next year is almost a foregone conclusion. From the point of view of valuation and repair, the value of companies with higher self-supply rates or marginal improvements such as China Mineral Resources, Tianqi Lithium Industry and Yongxing Materials may be further highlighted.