Ganfeng Lithium (01772.HK) Hot Stock Analysis - Lithium Price Rise and Supply-Demand Game

Ganfeng Lithium (01772.HK) became a Hong Kong hot stock due to positive supply-side news in China’s lithium market [0]. The company is an H-share listed in Hong Kong, belonging to the Metal & Mining (Lithium Resources) sector [1]. Recently, the stock has risen 142% annually, with current buy/sell prices at 51.65/51.80 HKD, which is in the mid-high range of its 52-week fluctuation interval (16.22-63.35 HKD) [1]. The core catalyst is the news that the Natural Resources Bureau of Yichun City, Jiangxi Province plans to revoke 27 expired lithium mining licenses, triggering market concerns about future lithium supply and pushing the Guangzhou Futures Exchange Lithium Carbonate Main Contract to a new high since June 2024 (108,620 yuan/ton) [2][3]. The growth in demand from the energy storage industry also provides continuous support for lithium prices [3]. The daily trading volume was 21.15 million shares, slightly lower than the 3-month average volume (25.54 million shares) [1]. Southbound funds net bought 14.3749 million shares in the past two weeks, with the holding ratio increasing by 3.57%, showing a positive attitude from mainland investors [4]. Market sentiment is divided: the lithium mining sector is generally active, but Goldman Sachs previously downgraded the stock to a “Sell” rating with a target price of 32 HKD, citing long-term pressure on lithium prices and overvaluation [5].

1. The linkage effect of supply-side news on lithium prices and lithium stocks is significant: Although the news of license revocation in Yichun involves expired licenses, it still triggered a short-term rise in lithium prices and lithium stocks, reflecting the market’s high sensitivity to lithium supply [2][3].
2. Divergence between southbound funds and institutional views: Continuous increases in holdings by southbound funds show short-term optimistic sentiment, while Goldman Sachs’ bearish report reflects concerns about the long-term supply-demand pattern (predicting a 10% lithium supply surplus in 2026) [4][5].
3. Valuation and performance divergence: The company’s current price-to-earnings ratio is -80.69, and net income is negative, but the stock price still rose sharply, reflecting that the market’s expectation of a lithium price rebound is stronger than recent performance [1].

• Short-term lithium prices are supported by supply concerns and are expected to continue rising, driving the performance of lithium stocks [2][3].
• The growth in demand from the energy storage industry provides continuous support for lithium prices [3].
• The continuous inflow of southbound funds may enhance the short-term resilience of the stock price [4].

• Lithium price fluctuation risk: A supply surplus may occur in 2026, leading to a drop in lithium prices [5].
• Valuation risk: The negative price-to-earnings ratio and recent negative net income cast doubt on the rationality of valuation [1].
• Institutional rating impact: Goldman Sachs’ bearish report may weaken investor confidence [5].

Ganfeng Lithium (01772.HK) became a Hong Kong hot stock due to rising lithium prices, mainly driven by news of the revocation of lithium mining licenses in Yichun. The stock has risen 142% annually, and southbound funds have increased their holdings, but it faces pressures such as high valuation, long-term downward risk of lithium prices, and institutional bearish views. Attention should be paid to the resistance level at the 52-week high (63.35 HKD) and the support level at 50.0 HKD, while tracking changes in the lithium supply-demand pattern [1][2][3][4][5].