At the end of August, the performance of lithium battery concept stocks was almost all red. Tianqi Lithium, which once needed "relief money" at the top of the debt, has finally returned to the position of lithium battery overlord.
Tianqi Lithium recently disclosed that the 2022 semi-annual report shows that the company achieved operating income of 14.296 billion yuan, an increase of 508.05% year-on-year. If the revenue of Tianqi Lithium is not too bright among A-share listed companies, then the company's net profit can be described as a substantial increase.
As of the morning of September 2, 4900 A-share companies have disclosed their semi-annual reports. Among them, Tianqi Lithium ranked 50th with a net profit attributable to the mother of 10.327 billion yuan. Not only that, the company also ranked fourth among all A-share companies with an increase in net profit attributable to the mother of 11937.16%.
Looking at A shares, most of the companies with high-speed profit growth, the amount of company profits is limited, and the large-scale growth of net profits of more than 10 billion yuan is rare.
Tianqi Lithium's net profit doubled a hundredfold, inseparable from the heating up of lithium prices. In fact, Wind data shows that in the first half of this year, 75 of the 81 lithium battery concept stocks in A-shares achieved profitability, accounting for more than 90%. Among them, 4 companies increased by more than 1,000%, and 31 companies increased by more than 100%, accounting for nearly 40%.
In terms of revenue, there is a situation where the two leading companies of Ganfeng Lithium and Tianqi Lithium have a difference of only 200 million yuan in revenue and close to each other.
Longzhong Information lithium industry analyst Luo Xiaoli analyzed to shell financial reporters that in the case of strong demand for new energy vehicles and energy storage markets in the downstream of the lithium industry, lithium salt processing enterprises in the case of sufficient mineral resources, basically maintain a full load state, the performance is also reasonable.
Tianqi Lithium: Subsidiaries that have "dragged down" performance this year have brought more than 2.3 billion yuan in revenue
The performance of Tianqi Lithium is good, and it is inseparable from SQM's "competition".
SQM, which had previously "dragged down" Tianqi Lithium, showed a substantial increase in its performance in the first half of 2022, with operating income equivalent to about RMB30.222 billion and net profit equivalent to about RMB10.832 billion, and according to the proportion of equity, Tianqi Lithium received investment income of RMB2.326 billion.
All this came from 4 years ago.
On May 31, 2018, Tianqi Lithium finalized a huge acquisition. However, the Company intends to purchase 62.5565 million issued Class A shares of SQM Company indirectly held by NutrienLtd., accounting for approximately 23.77% of the total share capital of SQM Company, with a total transaction price of approximately US$4.066 billion (RMB26.298 billion contract).
For the acquisition of SQM, Tianqi Lithium said at the time that the Chilean Atacama Salt Lake developed by SQM is a salt lake resource with very superior endowments worldwide. Tianqi Lithium's purchase of SQM's 23.77% equity will help consolidate the company's industry position and help the company maintain its continuous competitiveness.
Although it seems that Tianqi Lithium purchased "Fragrant Food" today, the company was in trouble at that time and was once questioned by many parties.
In 2018, too many domestic lithium companies expanded production, and at that time, the downstream demand did not keep up, and the supply was oversupplied, resulting in a sharp decline in lithium prices. In March 2018, 99.5% of the price of lithium carbonate could sell for 154,000 yuan / ton, but at the end of 2019, it only takes 48,000 yuan / ton to buy the same product.
After purchasing SQM, Tianqi Lithium once announced that the gross profit of product sales was lower than expected because the price of lithium products continued to decline in 2019. Since 2019, SQM has also been affected by industry adjustments and the decline in lithium prices, and its operating performance has declined significantly compared with the same period, and it has deviated greatly from expectations.
At the end of 2019, Tianqi Lithium industry publicly stated that "the company is currently facing greater financial pressure". At the end of the year, the company also raised 7 billion yuan of funds by allotment of shares, and the net amount after deducting the issuance fee is intended to be used to repay part of the M&A loan for the purchase of 23.77% of the equity of SQM.
From the perspective of financial indicators, Tianqi Lithium also suffered a performance turning point after purchasing SQM.
In the three years from 2016 to 2018, the total operating income of Tianqi Lithium was 3.905 billion yuan, 5.470 billion yuan and 6.244 billion yuan respectively, an increase of 109.15%, 40.09% and 14.16% respectively.
By 2019, the total operating income of Tianqi Lithium fell to 4.841 billion yuan, down 22.48% year-on-year, and fell to 3.239 billion yuan in 2020, down 33.08% year-on-year.
In terms of net profit, in the three years from 2016 to 2018, the net profit of Tianqi Lithium was 1.512 billion yuan, 2.145 billion yuan and 2.2 billion yuan respectively, an increase of 510.03%, 41.86% and 2.57% year-on-year.
In 2019, Tianqi Lithium experienced a net loss of 5.983 billion yuan, a sharp decline of 371.96% year-on-year. Net loss in 2020 was RMB1.834 billion.
The asset-liability ratio of Tianqi Lithium also rose sharply in 2019. From 2015 to 2017, the asset-liability ratio of Tianqi Lithium has been maintained at about 40%, until it rose to 73.26% in 2018, 80.88% in 2019, and 82.32% in 2020.
However, this situation has improved in 2021. In the annual report of that year, Jiang Weiping, chairman of the company, made a rare message, saying with emotion that Tianqi Lithium has been deeply engaged in the lithium industry for nearly 30 years, starting from a small lithium salt factory, experiencing cycles of repetition, from prosperity to troughs, and then to a strong rebound.
Indeed, in 2021, Tianqi Lithium achieved revenue and net profit of 136.56% and 213.37% respectively, and broke free from the previous net loss. In 2022, the situation is still getting better.
Previously, Tianqi Lithium had taken out a loan to buy the company, but now it was disclosed in the semi-annual report that the company actively repaid bank loans through its own funds and Hong Kong stock IPOs, effectively reducing the scale of liabilities. Up to now, the company has repaid all citic syndicated M&A loans and other financial liabilities, and the asset-liability ratio has been greatly reduced. Fully complete the leverage reduction target.
Close-knit combat: The revenue of the two lithium battery leaders is only 200 million
Tianqi Lithium's net profit doubled a hundredfold, inseparable from the heating up of lithium prices.
In recent years, the production and sales of new energy vehicles in the mainland have been increasing. In July this year, mainland new energy passenger car sales reached 564,000 units, up 124% year-on-year. According to minmetals securities forecasts, China's electric vehicle sales are expected to be 6.05 million units in 2022, and global electric vehicle sales are expected to be 10.25 million units.
As an accessory for new energy vehicles, lithium battery prosperity is also rising.
From the perspective of the whole industry, there are 81 lithium battery concept stocks in A-shares, and the top two with the highest operating income are occupied by BYD and Ningde Times, which stand out from the queue with obvious advantages. Since then, the revenue of A-share hot companies such as Salt Lake Shares, Yiwei Lithium Energy, and Grimme has stabilized in the range of 10 billion yuan to 20 billion yuan.
In particular, Ganfeng Lithium and Tianqi Lithium, the former achieved revenue of 14.443 billion yuan, and the latter achieved revenue of 14.295 billion yuan, close to each other.
Among them, Ganfeng Lithium industry is "rich and willful" and continues to expand in the first half of this year. Successively acquired 62% of the equity of Shangrao Songshugang Tantalum Niobium Mine Project through Xinyu Ganfeng Mining; Completed the equity closing of the Mali Goulamina spodumene project and obtained a 50% equity interest in Mali Lithium; Holds 100% equity interest in Bacanora and sonora lithium clay projects.
Tianqi Lithium, which completed the acquisition of SQM many years ago, although it lost about 200 million yuan in revenue, it was better in net profit.
In terms of specific net profit amount, Tianqi Lithium occupies the first place of 81 lithium battery concept stocks, followed by Salt Lake Shares, Ningde Times, Ganfeng Lithium and BYD. Among them, Tianqi Lithium is the company with the highest net profit increase, and Shengxin Lithium Energy's increase of more than 950% is also more prominent.
In the face of the sharp rise in the performance of lithium battery companies, Luo Xiaoli told reporters that the prosperity of the downstream new energy vehicles in the lithium industry chain is now transmitted upwards, driving the upstream resource prices to continue to rise, thus becoming the main driving force for the development of the lithium industry.
However, it should be noted that this demand does not continue to grow all year round. Another analyst told reporters that the shortage of raw materials in the upstream has caused lithium prices to rise, and lithium mining companies have made a lot of money, but this will also put pressure on the production costs of terminal products of downstream vehicle companies, thereby destroying production enthusiasm, which may force car companies to find alternatives or reduce demand for lithium.
Wood Mackenzie expects total lithium demand to grow at an annual rate of 17.8% between 2020 and 2030, after which growth will slow to 6.2% per year over the next 10 years as the market matures.
The growth of rechargeable batteries will lead to lithium demand growing at a rate of 21.6% per year until 2030 and 6.5% per year over the next 10 years, and between 2040 and 2050, as the market becomes increasingly saturated, lithium demand growth will slow to 1.1% per year.
"Tianqi Lithium conforms to the trend and put forward the concept of harmonious, stable and healthy development of the industrial chain very early", at the performance briefing, Jiang Weiping, chairman of Tianqi Lithium, humbly said that now the company tends to cooperate with the downstream for symbiosis and win-win.
Beijing News shell financial reporter Lin Zi
Edited by Yue Cai Zhou
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