Tianqi Lithium's M&A buried mines, with a pre-loss of more than 3.6 billion yuan in the first quarter, four directors and supervisors cut salaries, and Jiang Weiping's father and daughter raised their salaries by 140,000 yuan

Changjiang Business Daily

2024-04-25 09:49Published on the official account of Hubei "Yangtze River Business Daily".

Yangtze River Business Daily News ● Yangtze River Business Daily reporter Shen Yourong

Lithium mining giant Tianqi Lithium (002466. SZ) "hit" the market by surprise.

On the evening of April 23, Tianqi Lithium released a performance forecast, and the company expects a loss of 3.6 billion yuan to 4.3 billion yuan in the first quarter of 2024. The amount of loss in a single quarter was a record.

According to the previously disclosed annual report, in 2023, Tianqi Lithium's operating income will exceed 40 billion yuan, a slight year-on-year increase, but the net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") will be close to 7.3 billion yuan, a year-on-year decrease of about 70%.

Late at night on April 23, the Shenzhen Stock Exchange issued a letter of concern to Tianqi Lithium, requiring the company to verify and explain in detail the reasons for the large losses in the first quarter of this year and the countermeasures.

Affected by the above-mentioned unexpected losses, on April 24, Tianqi Lithium's share price fell to a limit. Wind data shows that in the first quarter of this year, fund companies reduced their holdings of about 70 million shares of Tianqi Lithium.

In 2023, Tianqi Lithium plans to distribute cash dividends of 2.216 billion yuan, and the dividends will also shrink by more than 50% year-on-year.

The decline in performance and the "leading" salary reduction of senior executives are the operations of most listed companies. A reporter from the Yangtze River Business Daily noticed that in 2023, four directors and supervisors of Tianqi Lithium will cut their salaries, however, Jiang Weiping, the actual controller and chairman of the company, and his daughter Jiang Anqi are raising their salaries, which is unexpected.

The target of the merger and acquisition caused huge losses

The market did not expect Tianqi Lithium's quarterly loss to be so large.

In 2023, Tianqi Lithium achieved operating income of 40.503 billion yuan, a year-on-year increase of 0.13%, basically the same as the same period of last year, a net profit of 7.297 billion yuan, a decrease of 16.828 billion yuan from the same period of last year, a year-on-year decrease of 69.75%, and a net profit after deducting non-recurring gains and losses (hereinafter referred to as "non-net profit") of 7.177 billion yuan, a decrease of 15.882 billion yuan from the same period of last year, a year-on-year decrease of 68.88%.

In 2021 and 2022, the company's operating income will be 7.663 billion yuan and 40.449 billion yuan respectively, a year-on-year increase of 136.56% and 427.82%, and the net profit will be 2.079 billion yuan and 24.125 billion yuan respectively, a year-on-year increase of 213.37% and 1060.47%.

In 2022, Tianqi Lithium's performance soared, mainly due to the impact of many positive factors such as the improvement of the global new energy vehicle boom, the acceleration of production capacity expansion of lithium-ion battery manufacturers, and the increase in orders for downstream cathode materials, and the sales volume and average sales price of the company's lithium products increased significantly.

In addition, in 2022, the company's net investment income reached 7.846 billion yuan, of which the investment income from associates and joint ventures was 5.895 billion yuan.

In 2023, Tianqi Lithium's performance will reverse, which is also directly related to the price of lithium products. Affected by the fluctuation of the lithium chemical products market, the sales price of the company's lithium chemical products decreased compared with the previous year, and the gross profit of lithium chemical products declined. In addition, the company's net investment profit was 3.110 billion yuan, less than half of that in 2022.

In 2023, Tianqi Lithium's net profit will decline quarter by quarter, of which the loss in the fourth quarter will be 801 million yuan.

Surprisingly, in the first quarter of this year, the company expects a loss of 3.6 billion yuan to 4.3 billion yuan. The company explained that due to the impact of fluctuations in the lithium product market, the sales price of the company's lithium products decreased significantly compared with the same period last year, and the gross profit of lithium products decreased significantly. In addition, the Court of Santiago de Chile ruled in April this year on its tax proceedings for the 2017 and 2018 tax years, reversing the conclusion of the Tax and Customs Tribunal's decision on the case on November 7, 2022. SQM, the company's significant associate, is expected to reduce its net profit for the first quarter of this year by approximately US$1.1 billion by reviewing the accounting treatment of all tax dispute amounts based on the latest ruling.

Previously, in 2022 and 2023, SQM contributed a lot of net investment income to Tianqi Lithium.

SQM was acquired by Tianqi Lithium. In response to the rare huge losses in the first quarter of this year, the Shenzhen Stock Exchange issued a letter of concern overnight, requiring Tianqi Lithium to quantitatively analyze the reasons for the sharp increase in losses based on the specific 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, explain the specific situation and subsequent progress of the SQM tax dispute ruling, the amount of impact on the company's net profit in the first quarter and the basis for calculation, and whether it is in line with the accounting standards for business enterprises.

The potential risk of SQM has not been resolved

Tianqi Lithium has rapidly grown into a global lithium giant through mergers and acquisitions. Today, the company has the after-effects of mergers and acquisitions.

In 2012, Tianqi Lithium spent 4 billion yuan to acquire lithium ore giant Talison before the American industry giant, and at that time, Tianqi Lithium's total assets were only 1.569 billion yuan.

In 2016, Tianqi Lithium spent US$4.066 billion to acquire a 23.77% stake in SQM, and completed the transaction in 2018.

SQM operates the Atacama project, the world's largest lithium salt lake, and the acquisition of SQM has made Tianqi Lithium one of the world's lithium mining giants. But the risks that SQM brings to Tianqi Lithium are not small.

In 2019, Tianqi Lithium's net profit was a loss of 5.983 billion yuan, which was the largest loss since Tianqi Lithium's listing and the first loss since 2014. Among them, the impairment loss on the investment in SQM was about 5.310 billion yuan.

In 2020, Tianqi Lithium's net profit was -1.834 billion yuan, one of the important reasons was the decline in SQM's performance, resulting in a decline in investment income.

It is worth noting that there are reports that SQM has signed a memorandum of understanding with Chile's National Copper Company (Codelco).

In this regard, the Shenzhen Stock Exchange required Tianqi Lithium to verify and explain the specific situation of the relevant matters, assess the impact of the matter on the company, explain the countermeasures to be taken, and fully indicate the relevant risks.

As of the end of 2023, the closing balance (book value) of Tianqi Lithium's long-term equity investment in SQM was 26.163 billion yuan, accounting for 35.73% of the company's total assets.

Affected by the thunderous performance in the first quarter of this year, on April 24, Tianqi Lithium's share price fell to the limit.

A reporter from the Yangtze River Business Daily found that in 2023, or affected by the decline in net profit, the salary of Zou Jun, the company's director, executive vice president and chief financial officer, decreased by 648,400 yuan to 2.128 million yuan. The remuneration of director and president Xia Juncheng was 3.6343 million yuan, a decrease of 1.0014 million yuan from the same period last year. The remuneration of Hu Yi, the employee representative supervisor, was reduced by 31,700 yuan. The largest decrease is Executive Vice President Liu Ying, whose salary in 2023 will be 1.7472 million yuan, a year-on-year decrease of 3.3648 million yuan.

On the evening of April 12, Tianqi Lithium disclosed that Liu Ying, executive vice president of the company, applied for resignation as executive vice president of the company for personal reasons, and no longer held any position in the company, the company's holding subsidiaries and shareholding companies after resignation.

Salaries have decreased and increased. Jiang Weiping, the actual controller and chairman of Tianqi Lithium, will receive a salary of 3.9286 million yuan in 2023, an increase of 77,000 yuan from the same period last year. Jiang Anqi, the daughter of Jiang Weiping, serves as the company's director and vice chairman, and her salary in 2023 will be 3.3052 million yuan, an increase of 64,800 yuan year-on-year. In other words, in 2023, the total salary of Jiang Weiping's father and daughter will increase by 141,800 yuan.

Visual China Diagram

View original image 59K

•