09696 Overview

Market Reaction to Geopolitical Tensions: Chinese metal stocks experienced a sell-off due to risk-aversion stemming from the conflict involving the US, Israel, and Iran, while coal stocks performed well due to rising price expectations and low investor positions.

JPMorgan's Insights on Metal Stocks: JPMorgan remains optimistic about gold and copper stocks, recommending quality mining shares during market dips, with ZIJIN MINING identified as a top pick.

Coal Price Projections: The firm anticipates that geopolitical tensions will elevate coal prices in the short term, driven by increased demand as crude oil and natural gas prices rise, although sustainability depends on potential disruptions in the Strait of Hormuz.

Aluminum Price Forecast: JPMorgan's global commodities team predicts that aluminum prices could surge towards USD4,000 per ton if significant supply disruptions occur, influenced by higher energy and freight costs.

Export Suspension: Zimbabwe's mines ministry has suspended all exports of raw minerals and lithium concentrates due to improper conduct during the export process, affecting all minerals in transit and deemed necessary for national interest.

Market Reaction: Following the announcement, the main contract for lithium carbonate in mainland China surged over 11%, while Hong Kong lithium mining stocks also experienced significant increases.

Disposal Proposal: TIANQI LITHIUM's board has approved a proposal to dispose of part of its equity interest in SQM, planning to sell up to approximately 3.566 million Class A shares, which is about 1.25% of SQM's total shares.

Regulatory Compliance: The share disposal will be conducted in a manner that avoids triggering the need for shareholder approval under the relevant Listing Rules and regulations.

New Fundraising Plans: TIANQI LITHIUM plans to raise approximately USD375 million through the placement of new H-shares and the issuance of zero-coupon convertible bonds due in 2027.

Equity Dilution Impact: The share placement is expected to cause an equity dilution of about 3.7-3.8%, while full conversion of the convertible bonds could lead to an additional dilution of 2.9-3.2%.

M&A Activity Speculation: JPMorgan suggests that the likelihood of TIANQI LITHIUM pursuing mergers and acquisitions has increased following the fundraising activities.

Stock Price Outlook: The broker has set a target price of HKD52 for TIANQI LITHIUM, maintaining a Neutral rating, while cautioning investors about potential short-term pressure on the stock due to combined dilution effects.

Trading Halt: TIANQI LITHIUM's H shares trading was halted at 9:04 a.m. for an unannounced reason, with short selling amounting to $9.31 million and a ratio of 6.206%.

New Share Issuance: The company plans to issue 65.05 million new H shares at a 9% discount and zero-coupon convertible bonds, aiming to raise approximately HKD5.83 billion.

Share Disposal Proposal: TIANQI LITHIUM's Board approved a proposal to dispose of up to 3.566 million Class A shares in SQM, representing 1.25% of SQM's total shares.

Recent Share Sales: The company has already sold over 748,000 Class B shares in SQM, amounting to 0.29% of SQM's total shares, through its subsidiary Tianqi Lithium HK.

Current Holdings: TIANQI LITHIUM currently holds approximately 62.5566 million Class A shares in SQM, which is about 21.9% of SQM's total shares.

Management Authorization: The Board has authorized management to sell all of its SQM Class A shares within the next year.