A blistering third-quarter report — why hasn't it translated into a positive share price reaction? Ganfeng Lithium Group Co.,Ltd. (01772) released its 2026 third-quarter report on October 15. For the first three quarters, the company achieved operating revenue of 36.159 billion yuan, up 147.24% year on year, while shareholder net profit reached 5.012 billion yuan, a staggering 195.4-fold increase.

Despite the explosive results, the share price fell instead of rising. The stock dropped sharply after the open on the next trading day, closing down more than 6%, and its market capitalization has shrunk by over 70% since May of this year.

The big jump in first-three-quarter results was attributed to a rebound in selling prices of lithium series products and higher sales of lithium battery series products. In the third quarter, however, lithium carbonate prices fell by more than 20%, and the company's revenue and shareholder net profit were 13.275 billion yuan and 754 million yuan respectively, both declining quarter on quarter, with net profit plunging nearly 70% sequentially.

So far in the fourth quarter, lithium carbonate prices have fallen nearly 20%, suggesting the company's next-quarter results will also be under pressure.

Still, as the world's largest lithium metal producer and China's largest lithium compound supplier, Ganfeng Lithium Group Co.,Ltd. (01772) spans lithium resource development, deep processing of lithium salts and lithium metal smelting, lithium battery manufacturing and recycling — a complete chain from mine to battery — making its performance the most resilient in this round of price swings. The company's dynamic PE valuation has also pulled back to around 6 times. As lithium carbonate prices keep falling, where does the support lie?

Lithium Carbonate as the Valuation Anchor, First-Three-Quarter Lithium Battery Results Gush

Lithium carbonate prices serve as the valuation anchor for the lithium battery sector. In the second half of 2025, lithium carbonate began an upward trend, which continued to surge in 2026, hitting a yearly high of 200,000 yuan per tonne in mid-May — more than double the low of 59,000 yuan in June 2025 — driving both results and valuations of the lithium battery sector sharply higher.

After June, lithium carbonate prices kept declining, and have now halved from the peak and fallen below the 100,000 mark, with the lithium battery sector also pulling back, market caps generally dropping more than 50%.

Although lithium carbonate prices fell sharply in the second half, they were still much higher year on year, which became the price basis for a collective turnaround in lithium companies' profits. According to third-quarter forecasts from major lithium battery companies, they all made hefty gains.

The lithium battery supply chain's results gushed. From October 12 to 15, Capchem, Salt Lake Co., Yunnan Energy New Material, Jiayuan Technology, EVE Energy and Ganfeng Lithium Group Co.,Ltd. (01772) successively disclosed first-three-quarter earnings forecasts. From upstream lithium salts to midstream materials and downstream batteries, profits rose almost across the board.

Among them, Salt Lake Co. earned the most in the first three quarters, with shareholder net profit of 8.84-9.05 billion yuan, up 87.96%-92.42%, while Ganfeng Lithium Group Co.,Ltd. (01772) posted the highest growth, up as much as 195.4-fold.

Making money in the same cycle, but in different ways. Salt Lake Co. runs a dual-engine model of "potash fertilizer + salt-lake lithium extraction"; Tianqi Lithium takes "resources are king" to the extreme, relying on the Greenbushes mine and SQM equity earnings, with revenue basically from lithium ore and lithium products, giving it the greatest elasticity when prices rise; Ganfeng Lithium Group Co.,Ltd. (01772) is a true "full-supply-chain player," with lithium metal and lithium compounds accounting for over 60%, plus an extra battery curve accounting for more than 30%.

As a result, in the third quarter, Ganfeng's single-quarter net profit fell nearly 70% from the second quarter; Tianqi has not released third-quarter results but is expected to see a larger decline; while Salt Lake's single-quarter figure dropped about 10% sequentially. The transmission of lithium prices pulling back from the May peak had a bigger impact on the financial statements of resource-based companies Ganfeng and Tianqi.

But for the capital market, this table only answers "how much was earned this time," while structure and profit margins determine "how long it can be earned." The market's pricing logic for lithium battery companies is shifting from "elasticity" to "sustainability." As a full-supply-chain player, can Ganfeng Lithium Group Co.,Ltd. (01772) withstand this valuation test brought by lithium carbonate's correction?

Valuation Logic May Be "Shifting," Ganfeng Falls into the "Allocation Zone"

Ganfeng Lithium Group Co.,Ltd. (01772) has a complete lithium ecosystem, starting from midstream lithium compound and lithium metal manufacturing and successfully expanding upstream and downstream in the industry value chain. On the resource side, the company has positioned itself in the world's core lithium resource belts, including two spodumene projects in Australia and multiple high-quality lithium salt lake assets under development in Argentina; on the manufacturing side, lithium compound and lithium metal production bases cover Fengxin and Yichun in Jiangxi and Dazhou in Sichuan, while its lithium battery business has laid out power battery, energy storage battery, consumer battery and PACK system production lines in Xinyu in Jiangxi, Chongqing and Inner Mongolia.

The company has formed a vertically integrated business model, with products covering battery-grade lithium carbonate, battery-grade lithium hydroxide, lithium metal, solid-state batteries and more, widely used in electric vehicles, energy storage, aerospace, functional materials and pharmaceuticals. Its industrial chain layout and diversified products give its performance growth resilience.

In terms of revenue structure, the company has formed a dual-drive setup of lithium products and lithium batteries. Lithium series products have always been the company's largest revenue source. From 2019 to 2025, revenue from this business grew from 4.161 billion yuan to 12.876 billion yuan, while the lithium battery and materials business grew even faster, rapidly climbing from 603 million yuan to 8.234 billion yuan, with its revenue share continuing to rise. In the first half of 2026, the two product series accounted for 63.2% and 35.3% of revenue respectively, while the company's lithium ore resource products accounted for 1.5%.

In the first three quarters of 2026, the two core businesses continued to drive strong growth, with revenue doubling, shareholder net profit of 5.012 billion yuan and non-GAAP net profit of 4.636 billion yuan, up 592.14% year on year — a solid "scale" after excluding one-off gains and losses. In addition, the financial position is sound, with an asset-liability ratio of 54.91%, continued net operating cash inflow, and net cash flow of 2.295 billion yuan, up 634.77% year on year. As of September, the company had 8.96 billion yuan in cash equivalents.

Notably, the company is advancing its industry chain vertically. On the lithium battery side, in the first half the company's energy storage cells continued to operate at full capacity, with capacity utilization close to 100%, and construction of its self-developed 588Ah large-cell production line has begun trial production, with plans to officially start capacity ramp-up in the third quarter of 2026. In the second half of 2026, falling lithium carbonate prices will compress profit margins on lithium salt products, but the self-sufficiency rate will rise substantially. If upstream prices continue to retreat, it is expected to increase the proportion of investment in lithium batteries and raise the revenue share of lithium batteries.

Back in the capital market, Ganfeng Lithium Group Co.,Ltd.'s (01772) Hong Kong market cap has fallen 74% from its May peak, but is still up 64% from last year's starting low. The sharp valuation pullback is not unique — the entire lithium battery sector has also retreated significantly.

In valuation terms, the company's PB is 0.9 times and dynamic PE is 6.5 times, versus 3 times and 23 times for the lithium battery sector, respectively. Clearly, the company's valuation has fallen into the "allocation zone."

However, Ganfeng's valuation coordinate system is shifting from "cyclical stock" to "growth stock," with the commercialization pace and profit loop of its lithium batteries, especially solid-state batteries, becoming the core variable for valuation.

From investment banks' views, most are pessimistic, mainly worried about continued lithium carbonate price declines. For example, a UOB Kay Hian research report said futures contracts had nearly halved since early September 2026 from a mid-May high of more than 200,000 yuan per tonne, mainly due to expectations of increased supply, and cut its average selling price assumptions for Ganfeng Lithium Group Co.,Ltd. (01772), sharply lowering its target price from HK$75 to HK$28; but there are also optimists, such as Huatai Securities, which is bullish on the company's energy storage capacity expansion alongside product iteration and its push toward solid-state battery commercialization, maintaining an "overweight" rating.

Overall, this year's first-half lithium carbonate upcycle brought huge wealth to the lithium battery industry, with results and valuations surging in succession, but the third-quarter price decline also caused industry profits to fall sequentially and valuations to shrink sharply. As an industry leader, Ganfeng Lithium Group Co.,Ltd. (01772) has a full-supply-chain layout and a dual-drive model of lithium products plus lithium batteries, while its integrated cost depth and the long-term imagination opened up by solid-state batteries provide strong support for the current valuation bottom. Lithium carbonate prices continue to affect valuation fluctuations in the lithium battery sector; if the company's valuation driver shifts from "cyclical stock" to "growth stock," the valuation bottom may be a left-side opportunity.