Valuation and Investment thesis
Tianqi Lithium not only holds shares of companies with the world’s largest scale and best lithium ore resources in production, but also has the world’s largest processing capacity on extracting lithium from ores. The advantages of unique resource conditions and pricing power make Tianqi Lithium the best investment object in upstream sectors of domestic new energy vehicle industry chains. We expected diluted EPS of the Company to RMB 2.19 and 2.69 of 2017/2018. And we accordingly gave the target price to 80.56, respectively 30x P/E for 2018. “Buy” rating.