天齐锂业2025年第三季度快速点评：业绩稳健，锂价反弹推动自由现金流增强

Neil Beveridge, Ph.D.+852 2123 2648neil.beveridge@bernsteinsg.com RatingOutperform Hengliang Zhang+852 2123 2629hengliang.zhang@bernsteinsg.com Price Target Quick Take: Tianqi Lithium 3Q25 - Solid quarter with FCF set tostrength as lithium prices rebound 3Q25 net income improved from 2Q losses but was below consensus. GPM remained robustat 38% despite subdued lithium prices at $9k/t LCE, which is below marginal cash costof $11.5k/t. With the major Greenbushes mine expansion on track for start-up and lithiumprices recovering to $11.5k/t, FCF is expected to strengthen from 4Q onwards.We remainOutperform on Tianqi Lithium with lithium market expected to tighten next year. Tianqi Lithium reported 3Q25 net income to parent of RMB95M (from RMB-18.5M in2Q25 and RMB-496M in 3Q24) which was below consensus RMB188M.Spot lithiumcarbonate price remained subdued at US$9.5k/t (-8% y-o-y, +19% q-o-q) in the quarter.Profitability were stable in 3Q with GPM of 38% (39% in 1H25) and OPM of 31% (33% in1H25). Spot lithium prices have since recovered to $11.3k/t or RMB80,500/t which shouldsee sequentially better earnings in 4Q. The completion of the Greenbushes expansion in 4Q represents a key catalyst forTianqi, boosting production capacity by 30%.CGP3 (500ktpa) which is the next majorexpansion at the Greenbushes mine is expected to complete in 4Q with ramp up in 2026.Greenbushes production capacity will increase to 2.15MTPA (+30%). Tianqi completed the30ktpa Jiangsu lithium hydroxide plant in 3Q which will take total lithium refining capacityfrom 92ktpa to 123ktpa (+33% y-o-y). Tianqi generated 9M25 operating cash flow of RMB2.19bn (-47% y-o-y).Capex totaledRMB2.48bn (-32% y-o-y) whcih resulted in FCF of RMB-290M. Balance sheet remains solidat 12% net gearing at 3Q25 (11% in YE24) with cash position of RMB8bn. Despite a sharp price appreciation YTD, Tianqi’s valuation remains reasonable in ourview.Tianqi is currently pricing in a lithium carbonate price of around $11.5k/t and is tradingat 40x 1-yr forward P/E (LT 50x) and P/S of 5.4x (LT 8x). KEY DETAILS Greenbushes Mine: The company's current lithium concentrate production capacity mainly comes from the Greenbushesspodumene mine controlled by the company. The mine currently has four lithium concentrate concentrators, with a completedlithium concentrate production capacity of 1.62 million tons/year, including chemical grade lithium concentrate plant No. 1,chemical grade lithium concentrate plant No. 2, technical grade lithium concentrate plant and tailings reprocessing plant.During the reporting period, the Greenbushes spodumene mine produced a total of 680,800 tons of lithium concentrate,including 654,400 tons of chemical-grade lithium concentrate and 26,400 tons of technical-grade lithium concentrate. Inaddition to this, the chemical-grade lithium concentrate plant III, currently under construction at the Greenbushes SpodumeneMine, is expected to be completed by December 2025. After the commissioning of the No. 3 chemical grade lithium concentrateplant, the total production capacity of the Greenbushes lithium concentrate project will reach about 2.14 million tons/year,which is conducive to further consolidating the leading position of the Greenbushes lithium concentrate project in the globallithium market. The combined Greenbushes spodumene mine reserves were 172 million tonnes, with an average grade of 1.9% lithiumoxide, equivalent to approximately 8.1 million tonnes of lithium carbonate equivalent. The operator is also continuing resourceexploration work in the surrounding area, with the aim of continuously developing its asset value. Cuola Mine:At the same time, the Sichuan Yajiang Cuola spodumene mine controlled by the company in China is part of thelargest hard rock methylcon lithium mine in Asia. According to the "Exploration Geological Report on the Cuola SpodumeneMining Area in Yajiang County, Sichuan Province" issued by the 108th Geological Team of the Sichuan Provincial Bureauof Geology and Mineral Exploration and Development in September 2011, the Yajiang Cuola spodumene mine has lithiumresources of 632,400 tons of lithium carbonate equivalent, with a resource grade of 1.30%. The project obtained a mininglicense in 2012, during which construction was suspended, and pre-construction work was restarted in 2022. At present, thecompany is stepping up the construction of the Yajiang Cuola spodumene mine project and the handling of relevant work. Afterthe completion of the project in the future, it will become the company's first domestic lithium concentrate supply source. Lithium refining:In terms of lithium chemical products, the company has a total of five lithium chemical product productionbases at home and abroad, located in Shehong, Sichuan, Tongliang, Chongqing, Zhangjiagang, Jiangsu, Kuinana, Australia andSuining, Sichuan, with a total production capacity of 91,600 tons/Year. The first phase of the lithium hydroxide project at theQuinana plant is