Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Thematic (Sector/Industry)

<ul>
<li>Our basket of lithium equities rose ~200% from November 2025 to a May 2026 peak before giving back most of their gains</li>
<li>Lithium demand continues to grow and a supply deficit continues to build as grid storage adds demand</li>
<li>Our basket has discounted the recent price declines and news flow and risk-reward is once again skewed to reward</li>
</ul>


Our basket of lithium equities rose ~200% from November 2025 to a May 2026 peak before giving back most of their gains
Lithium demand continues to grow and a supply deficit continues to build as grid storage adds demand
Our basket has discounted the recent price declines and news flow and risk-reward is once again skewed to reward


Lithium Equities: Round Trip, and Attractive Again

Smartkarma AI Primers, Smartkarma

αSK Primers

Smartkarma AI Primers

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Bottom-Up

<ul>
 <li>
Vertically Integrated Leader Positioned for EV Growth: Ganfeng is one of the world's largest and most vertically integrated lithium producers, with operations spanning resource extraction, refining, battery manufacturing, and recycling. This model provides a competitive advantage in securing raw materials and capturing value across the supply chain, positioning it to capitalize on the long-term secular growth in electric vehicles (EVs) and energy storage systems.</li>
 <li>
Financial Volatility Tied to Lithium Prices: The company's financial performance is highly sensitive to the volatile price of lithium. Recent years have seen significant swings, with a net loss in 2024 followed by a projected recovery. This inherent cyclicality presents a key risk for earnings stability, as evidenced by the recent negative three-year growth rates in key financial metrics.</li>
 <li>
Strategic Global Resource Diversification and Downstream Expansion: Management is executing a strategy of securing diverse, high-quality lithium resources globally (including assets in Australia, Argentina, and China) to ensure a stable, low-cost supply. Concurrently, the company is expanding its downstream battery production and recycling capabilities, aiming to create new growth avenues and enhance synergies across its integrated ecosystem.</li>
</ul>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.


  
Vertically Integrated Leader Positioned for EV Growth: Ganfeng is one of the world's largest and most vertically integrated lithium producers, with operations spanning resource extraction, refining, battery manufacturing, and recycling. This model provides a competitive advantage in securing raw materials and capturing value across the supply chain, positioning it to capitalize on the long-term secular growth in electric vehicles (EVs) and energy storage systems.
  
Financial Volatility Tied to Lithium Prices: The company's financial performance is highly sensitive to the volatile price of lithium. Recent years have seen significant swings, with a net loss in 2024 followed by a projected recovery. This inherent cyclicality presents a key risk for earnings stability, as evidenced by the recent negative three-year growth rates in key financial metrics.
  
Strategic Global Resource Diversification and Downstream Expansion: Management is executing a strategy of securing diverse, high-quality lithium resources globally (including assets in Australia, Argentina, and China) to ensure a stable, low-cost supply. Concurrently, the company is expanding its downstream battery production and recycling capabilities, aiming to create new growth avenues and enhance synergies across its integrated ecosystem.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Primer: Ganfeng Lithium (1772 HK) - Aug 2026

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Hong Kong Alpha portfolio gained 16.26% in January resulting in a 6.2% outperformance to its benchmark.  The portfolio has outperformed HK indexes by 48% to 63% since inception on 10/1/24.</li>
<li>Hong Kong Alpha has generated 50% of its return from alpha and has a Sharpe ratio of 1.79 since inception.  The portfolio's annualized mean excess return is 28%.</li>
<li>At the end of January, we reduced positions in the materials, communications, and conglomerate sectors and added positions in the food, energy, and manufacturing sectors.</li>
</ul>


Hong Kong Alpha portfolio gained 16.26% in January resulting in a 6.2% outperformance to its benchmark.  The portfolio has outperformed HK indexes by 48% to 63% since inception on 10/1/24.
Hong Kong Alpha has generated 50% of its return from alpha and has a Sharpe ratio of 1.79 since inception.  The portfolio's annualized mean excess return is 28%.
At the end of January, we reduced positions in the materials, communications, and conglomerate sectors and added positions in the food, energy, and manufacturing sectors.


HONG KONG ALPHA PORTFOLIO: (January 2026)

<ul>
<li>Hong Kong Alpha portfolio gained 8.45% in September and 60.89% and 62.80% YTD and since launch one year ago.  The portfolio has outperformed Hong Kong indexes by more than 40%.</li>
<li>The portfolio has a Sharpe ratio of 3.23 YTD and has generated more than 40% of its returns from stock-picking (alpha).  Its beta is low at only 1.17.</li>
<li>At the end of September, we increased exposure to AI and robotics and sold positions in the consumer and finance sectors.</li>
</ul>


Hong Kong Alpha portfolio gained 8.45% in September and 60.89% and 62.80% YTD and since launch one year ago.  The portfolio has outperformed Hong Kong indexes by more than 40%.
The portfolio has a Sharpe ratio of 3.23 YTD and has generated more than 40% of its returns from stock-picking (alpha).  Its beta is low at only 1.17.
At the end of September, we increased exposure to AI and robotics and sold positions in the consumer and finance sectors.


HONG KONG ALPHA PORTFOLIO: (September 2025)

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sichuan-kelun-biotech-biopharm" target="_blank" data-smartkarma-citation="entities:40071:1" rel="noopener">Sichuan Kelun-Biotech Bio (6990 HK)</a>, <a href="https://www.smartkarma.com/entities/techtronic-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:4561:1" rel="noopener">Techtronic Ind. (669 HK)</a>, <a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a>, <a href="https://www.smartkarma.com/entities/chervon-holdings-limited" target="_blank" data-smartkarma-citation="entities:35309:1" rel="noopener">Chervon Hldgs (2285 HK)</a>, and <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec (2359 HK)</a> have a very high reliance on the US market.</li>
<li>
<a href="https://www.smartkarma.com/entities/vtech-holdings-ltd" target="_blank" data-smartkarma-citation="entities:18812:1" rel="noopener">Vtech Hldgs (303 HK)</a>, <a href="https://www.smartkarma.com/entities/samsonite-international-sa" target="_blank" data-smartkarma-citation="entities:12790:1" rel="noopener">Samsonite (1910 HK)</a>, <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home (6690 HK)</a>, and <a href="https://www.smartkarma.com/entities/tcl-multimedia-technology" target="_blank" data-smartkarma-citation="entities:15654:1" rel="noopener">Tcl Multimedia (1070 HK)</a> ranked lower on the list, but consumer cutbacks will have a bigger impact. </li>
<li>The spillover effect of a US recession to other countries will pressurise companies that have low direct exposure, like <a href="https://www.smartkarma.com/entities/orient-overseas-international" target="_blank" data-smartkarma-citation="entities:801:1" rel="noopener">Orient Overseas International (316 HK)</a> and <a href="https://www.smartkarma.com/entities/prada-s-p-a" target="_blank" data-smartkarma-citation="entities:889:1" rel="noopener">Prada S.P.A. (1913 HK)</a>.</li>
</ul>



Sichuan Kelun-Biotech Bio (6990 HK), Techtronic Ind. (669 HK), Vesync (2148 HK), Chervon Hldgs (2285 HK), and WuXi AppTec (2359 HK) have a very high reliance on the US market.

Vtech Hldgs (303 HK), Samsonite (1910 HK), Haier Smart Home (6690 HK), and Tcl Multimedia (1070 HK) ranked lower on the list, but consumer cutbacks will have a bigger impact. 
The spillover effect of a US recession to other countries will pressurise companies that have low direct exposure, like Orient Overseas International (316 HK) and Prada S.P.A. (1913 HK).


China & HK Strategy: Who Are the Victims of a US Recession?

China

Ganfeng Lithium is a global leader in the lithium industry, specializing in the production and sales of lithium products and lithium batteries. Its business spans the entire lithium value chain, including upstream lithium resource development, midstream lithium refining and metal smelting, and downstream lithium battery manufacturing and recycling. The company's products, such as lithium salts and batteries, are widely used in electric vehicles, energy storage systems, consumer electronics, chemicals, and pharmaceuticals. Ganfeng Lithium was founded in 2000 and is headquartered in Xinyu City, Jiangxi Province, China.

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Ganfeng Lithium (1772 HK)

Lithium Equities: Round Trip, and Attractive Again

We revisit our Lithium basket, which rose ~200% on average from October 25 to May 26, and has since given back most of those gains. The risk-reward...

Rikki Malik

Primer: Ganfeng Lithium (1772 HK) - Aug 2026

Vertically Integrated Leader Positioned for EV Growth: Ganfeng is one of the world's largest and most vertically integrated lithium producers,...

αSK Primers

HONG KONG ALPHA PORTFOLIO: (January 2026)

At the end of January, we began to move out of materials and tech and into early cycle sectors. We continue with mid-month exposure adjustments: we...

David Mudd

HONG KONG ALPHA PORTFOLIO: (September 2025)

Due to the sudden escalation of US/China tensions we have decided to reduce AI and other risk exposure in the Hong Kong Alpha portfolio at the open...

David Mudd

China & HK Strategy: Who Are the Victims of a US Recession?

Reliance on the US market varies among HK-listed companies, with some having high direct exposure to a recession. Those with low direct exposure...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Lithium Equities: Round Trip, and Attractive Again

We revisit our Lithium basket, which rose ~200% on average from October 25 to May 26, and has since given back most of those gains. The risk-reward...

Rikki Malik

Primer: Ganfeng Lithium (1772 HK) - Aug 2026

Vertically Integrated Leader Positioned for EV Growth: Ganfeng is one of the world's largest and most vertically integrated lithium producers,...

αSK Primers

HONG KONG ALPHA PORTFOLIO: (January 2026)

At the end of January, we began to move out of materials and tech and into early cycle sectors. We continue with mid-month exposure adjustments: we...

David Mudd

HONG KONG ALPHA PORTFOLIO: (September 2025)

Due to the sudden escalation of US/China tensions we have decided to reduce AI and other risk exposure in the Hong Kong Alpha portfolio at the open...

David Mudd

China & HK Strategy: Who Are the Victims of a US Recession?

​Reliance on the US market varies among HK-listed companies, with some having high direct exposure to a recession. Those with low direct exposure...

Osbert Tang, CFA

Reliance on the US market varies among HK-listed companies, with some having high direct exposure to a recession. Those with low direct exposure...