CCTV Beijing, April 24 (Reporter Cao Qian, intern Xie Xiaoxuan) Affected by the pre-loss of the first quarter's performance, Tianqi Lithium opened on the 24th, and Hong Kong stocks closed down 19.15%.
On the same day, lithium stocks fell collectively. Ganfeng Lithium closed down 6.71%, and Shengxin Lithium Energy, Rongjie Shares, Sinomine Resources, Yongxing Materials, etc. also fell, closing down 5.03%, 4.13%, 3.88% and 2.2% respectively.
On the news side, on the evening of April 23, Tianqi Lithium released a performance forecast for the first quarter of 2024, with an expected loss of 3.6 billion to 4.3 billion yuan, compared with a profit of 4.875 billion yuan in the same period last year. The Shenzhen Stock Exchange issued a letter of concern that night, asking about the reasons for the sharp increase in losses in the first quarter.
According to industry data, in the first quarter of 2024, the average price of battery-grade lithium carbonate was 100,000 yuan/ton, down 24.5% from the fourth quarter of 2023. To a certain extent, this supports Tianqi Lithium's explanation that "affected by the fluctuation of the lithium product market, the sales price and gross profit of lithium products have decreased significantly compared with the same period last year".
A number of futures companies and brokerages believe that the thunderstorm of Tianqi Lithium reflects the current pressure faced by upstream companies in the situation of lithium price status, and it is expected that there will still be more upstream listed companies that are less than expected in the future. At present, the overall market is weak, and the lithium industry's production capacity has not yet begun, and lithium prices may be in the bottoming stage in 2024.
The decrease in gross profit may be due to industry commonality
For Tianqi Lithium's first-quarter performance forecast "thunder", the Shenzhen Stock Exchange issued a letter of concern on the evening of the 23rd.
The Shenzhen Stock Exchange requires Tianqi Lithium to explain whether the changes in its operating conditions are in line with the trend of industry changes in the development of its main business, product production and sales, product prices, raw material purchase prices, costs and expenses, impairment provisions and other factors, and explain the specific situation and subsequent progress of the SQM tax dispute ruling, the amount of impact on its net profit in the first quarter and the basis for calculation, and the countermeasures to be taken.
One explanation given by Tianqi Lithium in the announcement is that mainly affected by the fluctuation of the lithium product market, the sales price and gross profit of lithium products have decreased significantly compared with the same period last year.
According to the inquiry of the central radio capital, there is indeed a relevant basis for the statement that the price of lithium products fluctuates. According to data from Zhuochuang Information, in the first quarter of 2024, the average price of battery-grade lithium carbonate was 100,000 yuan/ton, down 24.5% from the fourth quarter of 2023.
As of December 31, 2023, the average domestic blended price of industrial-grade lithium carbonate was 94,000 yuan/ton, down 81.35% from the average price of 504,000 yuan/ton on January 1 of that year, and the average domestic blended price of battery-grade lithium carbonate was 103,000 yuan/ton on December 31, 2023, down 80.38% from the average price of 525,000 yuan/ton on January 1, 2023.
In fact, it is true that from the fourth quarter of 2023, Tianqi Lithium began to lose money.
According to the quarterly financial report, Tianqi Lithium had a net loss of 801 million yuan in the fourth quarter of last year. This is the first time that the lithium "giant" has suffered a single-quarter loss since the first quarter of 2021.
According to the 2023 annual report, the company's annual operating income was 40.503 billion yuan, a year-on-year increase of 0.13%, and the net profit attributable to shareholders of listed companies was 7.297 billion yuan, a year-on-year decrease of 69.75%.
After the disclosure of the annual report, Guosen Securities and Huafu Securities both issued research reports saying that due to the large fluctuation of lithium prices, the lithium price forecast was revised downward, so the profit forecast of Tianqi Lithium was further revised downward.
Among them, Guosen Securities expects Tianqi Lithium's revenue from 2024 to 2026 to be 11.729 billion yuan, 13.762 billion yuan, and 16.082 billion yuan respectively, and the net profit attributable to the parent company will be 4.527 billion yuan, 5.303 billion yuan, and 6.208 billion yuan respectively (the original forecast value from 2024 to 2025 is 8.483 billion yuan and 9.298 billion yuan).
Huafu Securities expects Tianqi Lithium's net profit attributable to the parent company from 2024 to 2026 to be 3.295 billion yuan, 3.920 billion yuan, and 5.148 billion yuan (the original forecast value from 2024 to 2025 is 7.06 billion yuan and 7.43 billion yuan).
Net asset pillar SQM turned into a "drag"
In addition to the industry-specific reasons for the decline in lithium carbonate prices, Tianqi Lithium also said that the net profit of its associate SQM in the first quarter is expected to decrease by about $1.1 billion, resulting in a sharp decline in its investment income in the associate company compared with the same period last year.
According to public information, Tianqi Lithium is a new energy materials enterprise with lithium as the core, and its business covers the key stages of the lithium industry chain, including the development of hard rock lithium ore resources, lithium concentrate processing and sales, and the production and sales of lithium chemical products.
Tianqi Lithium's two major business segments are lithium minerals, lithium compounds and derivatives, which account for 67% and 33% respectively. Among them, lithium compounds include lithium carbonate, lithium hydroxide and other lithium salt products, which are one of the raw materials of lithium batteries.
SQM is a globally important manufacturer of potassium and lithium products, listed on the New York Stock Exchange in Santiago, Chile and the New York Stock Exchange, in which Tianqi Lithium holds a 22.16% stake.
At this time, SQM has not announced its first quarter 2024 earnings report.
Tianqi Lithium said that the company has taken into account the reliable information available and has used the usual method to calculate the company's investment income on SQM for the same period based on information such as Bloomberg's forecast of earnings per share in the first quarter of SQM2024, and combined with the impact of SQM's tax dispute ruling, SQM's first-quarter results are expected to decline significantly year-on-year, so the company's investment income on the associated company recognized in the reporting period decreased significantly compared with the same period last year.
Tianqi Lithium disclosed that the court in Santiago, Chile, ruled in April 2024 on its tax litigation for the 2017 and 2018 tax years, reversing the tax and customs court's November 7, 2022 ruling on the case. SQM is reviewing the accounting treatment of all tax dispute amounts based on the latest ruling and expects that it may reduce its net profit for the first quarter of 2024 by approximately US$1.1 billion.
"Based on the principle of prudence and repeated arguments, the Company believes that it is more in line with the accounting standards to recognize the impact of the above-mentioned SQM tax dispute ruling in the investment income of the associate company in the reporting period, and this matter is expected to reduce the company's net profit attributable to the parent company. Tianqi Lithium said in the announcement.
In fact, since the completion of the equity acquisition in December 2018, SQM has been regarded by the industry as the "net asset pillar" of Tianqi Lithium.
In 2019, SQM allowed Tianqi Lithium to obtain an investment income of 403 million yuan, accounting for 55.30% of the company's net assets. In the same year, Tianqi Lithium's operating income fell by 22.48%, and its net loss was close to 6 billion yuan, a year-on-year decrease of 371.96%.
In 2020, the investment income brought by SQM to Tianqi Lithium fell to 175 million yuan, accounting for 70.10% of the company's net assets. In that year, Tianqi Lithium's revenue fell by 33.08%, with a net loss of about 1.8 billion yuan.
In 2021 and 2022, SQM brought investment income of 760 million yuan and 5.641 billion yuan to Tianqi Lithium, respectively. In 2021, Tianqi Lithium's revenue and net profit attributable to the parent company increased by 136.56% and 213.37% year-on-year respectively, and in 2022, it increased by 427.82% and 1060.47% respectively.
Until 2023, Tianqi Lithium will no longer announce the specific revenue of SQM.
According to the financial report, in 2023, Tianqi Lithium's revenue will increase slightly by 0.13%, and its net profit will decline by nearly 70%. SQM2023's annual results fell by about 48% year-on-year, and Tianqi Lithium only said that "the investment income recognized in 2023 to the associated company also decreased year-on-year compared with 2022".
Or more upstream companies are "less than expected"
At the close of trading today, lithium stocks fell collectively. Ganfeng Lithium closed down 6.71%, and Shengxin Lithium Energy, Rongjie Shares, Sinomine Resources, Yongxing Materials, etc. also fell, closing down 5.03%, 4.13%, 3.88% and 2.2% respectively.
"The disk fluctuates throughout the day, and the trend is weaker than that of other non-ferrous varieties. "Cinda Futures commented that the thunderstorm of Tianqi Lithium reflects the current pressure faced by upstream companies in the situation of lithium price status, and it is expected that there will still be more upstream listed companies that are less than expected in the future. At present, the drivers of both ends of supply and demand are not strong, and the current overall market is weak.
At the beginning of April, Jinyuan Futures predicted in the research report that short-term lithium prices would fluctuate. On the whole, there is no obvious excess of expected bullishness in the short term, and the follow-up core focus has shifted to the rhythm of demand-side procurement and the actual production schedule in May. In the long run, the pattern of excess supply and demand certainty has not changed, and lithium prices are still in a downward cycle.
According to the latest report of Cinda Futures, the average spot price of battery-grade lithium carbonate was 111,300 yuan/ton on April 23, down 0.13% from the previous day, and the average price of industrial-grade lithium carbonate was 108,300 yuan/ton, down 0.23% from the previous day. The closing price of the 2407 contract was 109,150 yuan/ton, and the settlement price was 108,950 yuan/ton, an increase of 0.14%, with a basis of 2,350 yuan. Warehouse receipts decreased by 590 contracts per day to 19,137 contracts.
In addition, Kaiyuan Securities said in a research report released in March that on the demand side, the growth rate of global new energy vehicle demand will slow down in 2023, especially the slowdown in China's new energy vehicle market, which will lead to a slowdown in the growth rate of lithium salt demand.
On the supply side, Australian mines, non-mines, South American salt lakes and other projects continue to expand, although greenfield projects have been postponed, but it is expected that in 2024, the projects will be put into production one after another, climbing, releasing and increasing volume, and the supply and demand pattern will turn to surplus.
Up to now, there are few projects that have stopped production and reduced production, and the lithium industry's production capacity has not yet begun, and Kaiyuan Securities expects that lithium prices will be in the bottoming stage in 2024. (CCTV Capital Eye)
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