Tianqi Lithium's "thunderstorm" was most hurt by insurance capital? China Pacific Insurance held a floating loss of more than 60% after raising its cards, and insurance funds have generally suffered book losses in the past two years

2024-04-24 18:43:59

Tianqi Lithium's "thunderstorm" was most hurt by insurance capital? China Pacific Insurance held a floating loss of more than 60% after raising its cards, and insurance funds have generally suffered book losses in the past two years

Finance Associated Press

2024-04-24 17:28Published on the official account of Cailianshe under Shanghai Poster Industry Group

Finance Associated Press, April 24 (Reporter Zou Juntao) The first-quarter financial report of lithium giant Tianqi Lithium caused market shocks.

On April 24, Tianqi Lithium (002466. SZ) A shares fell to the limit, as of the afternoon close, the stock was at 40.63 yuan per share, while Tianqi Lithium (09696.HK) Hong Kong shares also fell nearly 19% to close at 28.5 Hong Kong dollars per share.

Tianqi Lithium's "thunderstorm" was most hurt by insurance capital? China Pacific Insurance held a floating loss of more than 60% after raising its cards, and insurance funds have generally suffered book losses in the past two years

On the evening of April 23, Tianqi Lithium released a performance forecast, which is expected to have a net loss of 3.6 billion yuan to 4.3 billion yuan in the first quarter of this year, compared with a net profit of 4.875 billion yuan in the same period last year. On the evening of the same day, the Shenzhen Stock Exchange issued a letter of concern to Tianqi Lithium, requiring quantitative analysis of the reasons for the sharp increase in losses in the first quarter.

The reporter of the Financial Associated Press noticed that with the decline in the share price of Tianqi Lithium, the previously listed "Taibao" investment is facing the risk of expanding losses. In addition, there has been a general loss in the past two years.

"Taibao Department" raised Tianqi Lithium to lose more than 60%

According to the announcement of the Insurance Association of China, in July 2022, China Pacific Insurance and its two holding subsidiaries, Taibao Life Insurance and CPIC Property Insurance, announced that Tianqi Lithium (9696. HK) stocks. All three companies participated in Tianqi Lithium's Hong Kong stock IPO as cornerstone investors, entrusted CPIC Asset Management to invest, and participated in the listing through CPIC Asset Management's corporate account.

According to the Cornerstone Investment Agreement, CPIC and its holding subsidiaries subscribed for a total of 12,445,400 shares of Tianqi Lithium's Hong Kong shares, involving an amount of about HK$1.021 billion. Based on this calculation, the average price of Tianqi Lithium's Hong Kong shares subscribed by "CPIC" insurance funds at that time was about HK$80.35 per share.

After the raising, China Pacific Insurance, CPIC Property Insurance and CPIC Life Insurance respectively held 0.58%, 1.40% and 5.60% of Tianqi Lithium's Hong Kong shares and its H-share capital. The total shareholding ratio of the three companies is 7.58%.

On July 13, 2022, Tianqi Lithium's H shares were listed on the Hong Kong Stock Exchange at an issue price of HK$82 per share. A month later, its share price soared to HK$83.48 per share, but then the stock price began to slide continuously.

According to market data, as of today's close, Tianqi Lithium's H-share share price fell to HK$28.5 per share, a drop of 65.24% compared with the issue price. Compared with the average subscription price in the Cornerstone Investment Agreement, the floating loss of the "CPIC" investment reached 64.53%.

It is worth mentioning that the "Taibao Department" insurance capital also raised another lithium battery company. According to the announcement of the Insurance Association of China, in February 2020, China Pacific Insurance and its holding subsidiaries Taibao Life Insurance, Taibao Property Insurance, Taibao United Health Insurance Co., Ltd. and Anxin Agricultural Insurance Co., Ltd. announced the listing of Ganfeng Lithium Hong Kong stocks.

According to the disclosure, on February 24 of that year, the five companies bought a total of 2,405,200 H shares of Ganfeng Lithium through the Hong Kong Stock Connect, involving about HK $75.35 million, and the average purchase price was speculated to be around HK $31.33 per share. After this move, CPIC and its holding subsidiaries hold a total of 10,322,400 H-shares of Ganfeng Lithium, accounting for 5.16% of Ganfeng Lithium's issued H-shares.

On April 24, Tianqi Lithium's share price plummeted rapidly due to the performance explosion, and the share price of Ganfeng Lithium, which is also a lithium battery company, was also affected. As of today's close, Ganfeng Lithium's H shares fell more than 4% to close at HK$21.25 per share, which has fallen below the previous bid price.

In the past two years, insurance companies have generally lost money on the books

The reporter of the Financial Associated Press noticed that insurance funds have made many moves in the past two years, but from the perspective of subsequent stock price performance, book losses are more common.

According to the announcement of the Insurance Association of China, in November 2022, Taiping Life Insurance raised the Hong Kong stocks of Industrial and Commercial Bank of China after the "Taibao Department" raised the Hong Kong stocks of Tianqi Lithium. In January 2023, Chinese Life increased its holdings and listed Wanda Information; in February 2023, Sunshine Life raised Shoucheng Holdings Hong Kong stocks; in March 2023, CPIC Life raised Everbright Environment Hong Kong shares; in June 2023, Great Wall Life raised Zhejiang Jiaotong A shares and Zhongyuan Expressway A shares; in October 2023, Sunshine Life raised Tiantu Investment.

Market data shows that after the above-mentioned announcement, except for the overall rise of ICBC's Hong Kong stocks, the stock prices of the rest of the listed companies basically declined as a whole. Among them, Wanda Information's share price fell from 15 yuan per share after the listing to 5.55 yuan per share at today's closing price, a decline of 63%. It is worth mentioning that many of them have bought at a stage high.

It is worth noting that from January 1, 2023, the former China Banking and Insurance Regulatory Commission (CBIRC) required listed insurance companies to implement the 2017 Ministry of Finance revised and issued the Accounting Standard for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments. Compared with the original standard, the new accounting standard for financial instruments changes the classification of financial assets from "four classifications" to "three classifications", namely financial assets measured at amortized cost (AC), financial assets measured at fair value through other comprehensive income (FVTPL), and financial assets measured at fair value through profit or loss (FVOCI).

Orient Securities analysis pointed out that under the old accounting standards, enterprises can classify equity investment as "available-for-sale financial assets", and to a certain extent, this account can be used to adjust the rhythm of profit release, but under the new accounting standards, the operation is difficult to continue. In addition, under the new accounting standards, all equity instruments must be measured at fair value, regardless of the class they are classified into.

From the perspective of the industry, under the new accounting standards, changes in equity investment will have a greater impact on the profits of insurance companies. Industry insiders pointed out that in order to cope with the fluctuations caused by the new accounting standards on performance, strengthening high-dividend blue-chip stocks and strengthening FVOCI asset allocation is undoubtedly one of the strategies, which will help listed insurance companies smooth performance fluctuations.

(Finance Associated Press reporter Zou Juntao)

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