Allkem

ASX: AKE

Market CapAU$8,704m

Last Close AU$13.65

Created as part of a merger between Orocobre and Galaxy Resources in 2021, Allkem is a speciality lithium chemicals company headquartered in Argentina.

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Investment summary

Allkem is uniquely positioned to be one of the main beneficiaries of the favourable lithium market conditions as it boasts a healthy pipeline of advanced development projects, aiming to triple its production capacity and to expand into the higher value battery-grade products. Despite near-term economic weakness, lithium demand continues to be driven by the secular trend towards decarbonisation and growing global electric vehicle (EV) adoption. Supported by supply shortages, cost inflation and project delays, lithium prices should remain at elevated levels to incentivise new supply. Despite adding c 45% year to date, Allkem shares trade at a FY23e consensus EV/EBITDA multiple of only 5.6x versus the downstream peers’ average of 9.6x.

Content on Allkem
Allkem – Moving up the value chain
Metals & mining | research QuickView | 1 November 2022
Mine drill platforms
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Metals & mining
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Share price graph
Price performance
%
1m
3m
12m
Actual (5.5) (1.9) 33.6
Relative* (10.9) (5.2) 35.5
52-week high/low A$16.3/A$8.5
*% relative to local index

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