Chinese lithium producer Ganfeng Lithium shares jumped in both Hong Kong and China, as investors welcomed the company’s latest move to expand its mining and battery production businesses.
The company’s Hong Kong-listed shares
1772,
have gained as much as 8.0% and were last up by 5.5%. In Shenzhen, Ganfeng Lithium shares
002460,
advanced 6.9%.
The rally came after the company said it agreed to invest 2.5 billion yuan (US$359.3 million) in the Chinese city of Xiangyang to build a new lithium battery project.
In a separate filing Friday, Ganfeng Lithium said it will inject fresh capital of up to US$130 million into an Argentina subsidiary to further the development of an lithium mine there.
Analysts are optimistic about Ganfeng’s strategy to boost lithium production and diversify into battery businesses.
The company is “actively developing upstream lithium resources, which would not only allow Ganfeng to secure raw materials at a low cost, but would also underpin more lithium output growth potential,” Eastmoney Securities analysts said in a note.
The analysts also liked Ganfeng’s move to expand its battery business. The segment has delivered “eye-catching” performance in recent quarters, and is set to become “one of the company’s core businesses in 2023, fueling profit growth,” the Eastmoney analysts said, keeping an “add” rating on the stock. The brokerage does not have a target price for Ganfeng.
This story originally appeared on Marketwatch
