What's new

JSEM announced plans to buy an 11.45% equity stake in Australianlithium mining and exploration outfit, Tawana Resources forAUD$20mn via its subsidiary. Tawana mainly develops lithium oresand has a 50% interest in the Bald Hill lithium and tantalum mine inWestern Australia.

Comments

Stake in Tawana to secure future supply of spodumene andbring investment income.

New production line commissioned; capacity to increase.

Joylong’s large orders to secure full-year growth.

Valuation and recommendation

We maintain our earnings forecast, BUY rating and target price ofRmb18.34.

Risks

AFV output/sales disappoint; delayed capacity expansion of lithiumcarbonate.