Things are looking up for the electric vehicle industry, thanks to China’s reopening — particularly in the second half of the year, one analyst says. Corinne Blanchard, vice president of lithium and clean tech equity research at Deutsche Bank, told CNBC’s ” Street Signs Asia ” last week that China’s reopening should give the EV industry a “nice boost.” And that should be good news for lithium, a critical component of electric vehicle batteries. However, she predicted the bounce back may take some time. “As the country is now going through reopening, with COVID-related policy easing, we do foresee a few months of adjustments, topped with the fact that federal EVs subsidies are now being removed,” said Blanchard. “However, going into 2Q and the rest of the year, we expect sentiment and demand to further strengthen, which could bring upside to most expectations.” The market for lithium will likely remain tight this year, and the deficit should rise even more, she added, in a January note. “2023 appears to be shaping up as another strong year for Lithium producers, and we believe the majority of investors are missing this point,” Blanchard said. Stock picks Among lithium names, Deutsche favors those with strong management teams with “best in class” execution. One top pick is Sociedad Quimica y Minera de Chile , the world’s largest lithium producer. Blanchard views the recent pullback in its stock price as an “attractive entry point.” Shares of the firm have dipped since the beginning of December, but pared some losses in January. “We remain buyers of SQM, as the company will see ~15% Lithium volumes increase in 2023 from its brownfield expansion in Chile,” said Blanchard, referring to the expansion of an existing facility. “The company should also see incremental volumes coming from China, but likely towards the end of 2023, which should become more substantial going into 2024.” An additional bonus for shareholders? Returns via dividends are set to be an attractive 14% for 2023, the bank forecast. The bank gave the stock a target price of $95, or upside of about 2%. Blanchard also likes U.S.-based Albemarle , which produces lithium and other chemicals. The firm is well positioned to capitalize on lithium’s growth thanks to its two new plants, which were launched in 2022. The plants are set to increase its lithium capacity by 85%, which will further double over the next four years, Blanchard said. “We believe Lithium will remain a license for Albemarle to continue printing money well into the future,” she said.
Sumber: www.cnbc.com
