It will take time for Shengxin Lithium to increase the self-supply rate of domestic lithium ore resources.

Jinxin Mining has not yet resumed production, and Shengxin Lithium can be tied to production capacity through prepayment, except for increased competition for lithium resources, or because the Dangba spodumene mine owned by the former is one of the largest spodumene mines in China.

In fact, with the increase in lithium salt production capacity, Shengxin lithium can continue to allocate lithium resources, the company said that Suining's 30,000 tons of lithium hydroxide production capacity is currently climbing. According to the reporter's understanding, due to the mismatch of production time and other reasons, the company's self-financing rate is only 20%. Some analysts believe that the self-supply rate of Shengxin lithium energy is expected to reach more than 70% by 2025.

Jinxin Mining Industry is rich in high-quality lithium resources.

On the evening of March 28, Shengxin Lithium disclosed that Shengtun Lithium Industry, a wholly owned subsidiary of the company, signed a Strategic Cooperation Framework Agreement with Guocheng Group, and the two sides planned to actively cooperate to promote the resumption of production and operation of Jinxin Mining. And Guocheng Group actively promoted the procurement and sales cooperation between Shengtun Lithium Industry and Jinxin Mining Industry.

According to the Strategic Cooperation Framework Agreement, Shengtun Lithium Industry paid part of the purchase funds in advance to Jinxin Mining, which was directed to Jinxin Mining to solve the debt problem and resume mine production and operation. Guocheng Group urges Jinxin Mining to give priority to selling a certain amount of lithium concentrate / spodumene ore to Shengtun Lithium Industry within a certain period of time (not less than 50% of Jinxin Mining's output) in accordance with the fair market price.

Jinxin Mining used to be a subsidiary in which Zhonghe shares indirectly held 98%, but due to the unsmooth textile printing and dyeing business and the newly expanded lithium salt business, Jinxin Mining was terminated from listing in 2019 after successive losses, and was judicially restructured due to insolvency and other reasons.

Guocheng Group acquired a 50% stake in Jinxin Mining by participating in Zhonghe share restructuring in 2022 and increasing capital to Jinxin Mining by its holding subsidiary. It is precisely because of this that there is the scene of strategic cooperation between Guocheng Group and Shengtun lithium industry.

Although Jinxin Mining may be affected by debt problems, its lithium resources are not to be underestimated. Guoxin Securities related research report shows that Dangba spodumene mine owned by Jinxin Mining is one of the largest spodumene mines in China, with lithium oxide resources of 660000 tons and lithium oxide grade of 1.33%. Are higher than Lijiagou spodumene. According to public data, Lijiagou spodumene mine has lithium oxide reserves of 510000 tons and an average grade of 1.30%.

The reporter noted from the above research report that the permitted production scale of Jinxin Mining right is 850000 tons / year, and the permitted mining area is 2.722 square kilometers. However, Jinxin Mining owns the Dangba spodumene mining license and exploration license, in which the mining license is valid for December 2023 and the exploration right is valid until February 12, 2022.

As for whether Jinxin Mining's mining warrants are "temporary" and exploration rights "expired" will affect the subsequent resumption of production, some people in the industry told reporters that there are certain risks, but they can continue to operate through the relevant procedures such as re-issuing and renewing licenses.

The self-financing rate of resources is nearly 20%.

Shengxin Lithium Energy currently has a lithium carbonate production capacity of 25000 tons per year and lithium hydroxide production capacity of 15000 tons per year, while the newly added Suining Lithium hydroxide production capacity of 30, 000 tons per year, Shengxin Lithium Energy related sources told the Financial Associated Press that the project was completed in January this year and is currently in the process of climbing a slope. Normally, it takes 3-4 months to reach production. In addition, according to the reporter's understanding, the planned production capacity of lithium hydroxide and lithium carbonate in Indonesia is 50,000 tons / year and 10,000 tons / year, which is expected to be put into production in 23 years.

In fact, with the expansion of lithium production capacity, Shengxin Lithium Energy has been seeking the supply of lithium resources through equity participation, agreement supply and so on. It is understood that the company's current lithium resource layout includes Sichuan Yelonggou Lithium Mine (75%), Taiyang Hekou Lithium Polymetal Mine (75%), Sichuan Lithium Mine (25.19%), Zimbabwe Sabixing Lithium Tantalum Mine (51%), Argentina SDLA Salt Lake (management right), Mt Cattlin and Manono underwriting.

However, due to the mismatch of production time and other reasons, the self-supply rate of lithium resources of Shengxin lithium energy is not high. Sheng Xin LiNeng said on the interactive platform that the current production scale of its own mine Oyino Mining Lithium concentrate is about 75000 tons per year (equivalent to about 10, 000 tons of lithium carbonate), and the Sabixing Lithium Tantalum Mine project in Zimbabwe is initially planned to produce about 200000 tons of lithium concentrate per year. It is expected to be completed and put into production by the end of 2022, and the rest of the lithium ore resources mainly rely on outsourcing.

Based on this calculation, the current self-supply rate of Shengxin lithium energy is about 20%. Some analysts believe that as the mine goes into production, the self-supply rate of Shengxin lithium energy is expected to reach more than 70% by 2025.

On the same day, Shengxin LiNeng disclosed a quarterly forecast that the company expected to achieve a net profit of 900 million yuan to 1.1 billion yuan in the first quarter, an increase of 765.24% and 957.52% over the same period last year. It is understood that the company achieved a net profit of 312 million yuan on Q4 in 2021. Based on this calculation, the net profit in the first quarter of 2022 is expected to grow by 188% Mel 252% over the previous quarter.

As for the reasons for the performance growth, Shengxin Lithium Energy said in its quarterly report that during the reporting period, the new energy industry developed rapidly, the demand for lithium salt from downstream customers increased strongly, and the price of lithium salt products continued to rise. the profit of the company's lithium salt business increased sharply compared with the same period last year.