UOB Kay Hian initiated coverage on Ganfeng Lithium (01772) with a "buy" rating and a target price of HK$38. It believes Ganfeng has now become a new leader in the lithium hydroxide industry and thus deserves a premium over its peers in the global market.
The research house believes Ganfeng and Livent are more similar and suited for valuation comparisons. It sees better earnings elasticity at Ganfeng based on historical data, as well as better earnings prospects versus Livent when looking at Bloomberg ROE projections.
UOBKH is convinced Ganfeng's premium over Livent is justified as Ganfeng is gradually growing into an industry leader.
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