What is the fair value of Lithium Power International Ltd (LPI)?

Arrowhead is initiating coverage of Lithium Power International Ltd. (“LPI”) with a fair value of AUD 0.512 per share in the low-bracket scenario and AUD 0.626 per share in the high-bracket scenario, calculated using a blended valuation method, with 50% weighting to the DCF method and 50% weighting to the Comparable Companies Valuation method.

Are lithium-ion EV batteries a good investment?

Recycling and reusing lithium-ion EV batteries are new trends with strong growth potential, given their economic lucrativeness and their potential of enabling better use of resources and reducing carbon emissions by reducing the need for lithium mining over the long term.

What is the fair valuation method for Lithium Power International?

Valuation Methodology: The Arrowhead fair valuation for Lithium Power International is based on the Discounted Cash Flow (DCF) analysis of the Company’s investment in MSB, Chile joint venture project. Time Horizon: The time period chosen is based on the production reserves available for the asset under MSB joint venture.

What is the value chain depth and concentration of the battery industry?

Value chain depth and concentration of the battery industry vary by country (Exhibit 16). While China has many mature segments, cell suppliers are increasingly announcing capacity expansion in Europe, the United States, and other major markets, to be closer to car manufacturers.

Can EV battery recycling reduce the environmental impact of lithium mining?

Companies, especially in China, are working on recycling and reusing lithium-ion batteries as an option to reduce the environmental impact of lithium mining. A BCG analysis suggests that the economics of EV battery recycling at scale are attractive, while generating profits from reuse is likely to be much harder.

Why did the price of lithium-ion batteries drop in 2023?

By the beginning of 2023 the price of lithium-ion batteries, which are widely used in energy storage, had fallen by about 89% since 2010. This reduction is attributed to advancements in technology, economies of scale in production, and increased market competition.