[SMM special topic] Lithium electricity "big explosion"! A number of enterprises' semi-annual reports predict that the net profit of Tianqi shares has soared by 562% to 650%.

SMM July 8: if you mention the recent hot plate, lithium battery definitely occupies a place. Two large-scale ups and downs on July 5 and July 7 amazed investors who had long been accustomed to the sector's outstanding performance for a long time.

Today, under the stimulation of the major good news, the lithium battery plate continued to be active at the close, including Fulin Seiko, Xin Wanda, Shi Da Shenghua, Cedar shares and other 15 shares rose by the daily limit. The lithium battery index skyrocketed by more than 36% in a year.

With the rapid development of lithium battery industry, many lithium-related companies have benefited from it. Recently, several companies, including Enjie shares, Tianqi shares, Azure Lithium Core and * ST Salt Lake, have issued their performance forecasts for the first half of 2021. Among them, Enjie shares and Azure Lithium Core both made a net profit growth forecast of more than 200%, while Tianqi shares boldly predicted that its net profit in the first half of the year is expected to soar by 562% to 650% compared with the same period last year!

* ST Salt Lake:

On July 8th, * ST Salt Lake released its first half 2021 results forecast. According to the forecast, the company is expected to achieve a net profit of 20-2.2 billion yuan in the first half of this year, an increase of 44.69% and 59.15% over the same period last year.

As for the reasons for the change in performance, * ST Salt Lake explained that the company's performance improved due to the rise in commodity prices and the rise in the prices of KCl and lithium carbonate products in the first half of the year. At present, * ST Salt Lake has 13602 tons of lithium carbonate production, an increase of 2300 tons over the same period last year.

In addition, its holding subsidiary Lanke Lithium Industry has reached 85% progress in the project to produce 20,000 tons of battery-grade lithium carbonate per year, some of the devices have been put into commissioning, and the output of lithium carbonate has increased compared with the same period last year.

It is worth mentioning that, according to SMM research, although the overall lithium carbonate market still shows an oversupply, but considering the upstream forecast of the future lithium price is more optimistic, lithium carbonate prices are expected to remain strong.

According to the spot quotation of SMM, as of July 8, the average price of battery-grade lithium carbonate in China was 87500 yuan / ton, an increase of 69.9% during the year.

"Click to see more SMM metal spot prices.

Enjie shares:

On July 1, Enjie issued a semi-annual performance forecast. According to the forecast, the company expects the net profit attributed to listed shareholders to reach 10 to 1.09 billion yuan in the first half of the year, an increase of 211.15% and 239.15% over the same period last year.

As for the reasons for the change in performance, Enjie said that it mainly benefited from the sustained and steady growth of the company's wet lithium battery separator production and sales. It is reported that during the reporting period, Enjie shares continued to improve the production capacity of this business, and has successfully opened up overseas markets.

After the semi-annual report, China International Capital Corporation commented that Enjie shares outperformed the industry rating and predicted that Enjie shares' net profit in 2021 would reach 2.35 billion yuan, an increase of 110.65% over the same period last year. Not only that, China International Capital Corporation also boldly gave Enjie shares a high target price of RMB260.

Subsequently, Soochow Securities issued a research report saying that Enjie shares are expected to return to its mother net profit of 2.512 billion yuan in 2021, an increase of 125.17% over the same period last year, maintaining the buying rating, and raising the target price to 303 yuan. On July 6, China Merchants Securities maintained the "strongly recommended-A" investment rating of Enjie shares and raised its target price to 290,300 yuan.

Azure lithium core:

Also on July 1, Azure Lithium Core issued a semi-annual performance forecast, saying that the company is expected to achieve a net profit of 3.2 to 350 million yuan attributable to listed shareholders from January to June this year, up 346.31 to 388.15% from the same period last year.

As for the reasons for its expected performance growth, Azure Lithium explained that the company's businesses were in good shape in the first half of 2021. During the reporting period, the company's lithium battery business was also in a state of full production and sales, which increased significantly compared with the same period in 2020, and lithium battery business became the largest source of profits for the company.

After the release of the performance forecast, a number of institutions have given Azure lithium core a minimum of 28 yuan and a maximum target price of 34 yuan. On the occasion of the lithium plate carnival on July 5, the blue lithium core was on the list of dragons and tigers with an increase of more than 9.9%.

As early as June 23, Azure Lithium Core revealed that its company has an annual production capacity of nearly 400 million lithium batteries, and 300 million more will be added when the Zhangjiagang Phase II project is put into production in the fourth quarter of this year. In addition, the company's Huaian battery project industry is actively preparing, and it is expected that after the completion of the first phase of the project, the company's lithium battery capacity will increase by another 600 million, and in the future, the blue lithium core will also carry out capacity construction according to the needs of the market.

Tianqi Co., Ltd.:

As early as the evening of June 23, Tianqi shares disclosed its annual performance forecast for 2021. According to the forecast, as of June 30, the company expects the company's net profit for the current half-year reporting period to reach 7200-85 million yuan, an increase of 562% to 650% over the same period last year, and the net profit for the same period last year was 11.329 million yuan.

As for the reason for the sharp increase in net profit, Tianqi explained that it was mainly due to the development of the domestic new energy industry this year, and the strong demand for power battery materials led to a rise in the price of metals such as cobalt and lithium, thus increasing the company's gross profit space.

During the reporting period, Jiangxi Tianqi Jintai Pavilion Co., Ltd. and Ganzhou Tianqi Lizhi Industrial Co., Ltd., the core subsidiaries of Tianqi's automotive aftermarket business, continued to optimize product structure, expand production capacity, reduce unit consumption costs, and greatly increase the company's product sales to contribute to the company's profits.

It is worth mentioning that the automobile aftermarket industry, as one of the four major business development directions of Tianqi shares, has been valued repeatedly in recent years, and now this business has covered scrapped car recycling and disassembly, automobile core parts remanufacturing and power battery recycling and utilization, and is gradually expanding the passenger car extended warranty business.

On the evening of June 28th, Tianqi shares also disclosed that the company and its subsidiary, Jiangxi Tianqi Jintai Pavilion Co., Ltd., plan to purchase about 397.34 mu of land in Longnan Economic Development Zone, and plan to take waste lithium battery raw materials as the leading role in the next five years. Form a production project with an annual production capacity of 30,000 tons of ternary precursors and 12000 tons of battery-grade lithium carbonate.

It is reported that the project has a total investment of about 5 billion yuan and is divided into two phases. The first phase will start construction in the fourth quarter of 2021 and is expected to be completed and put into production in the fourth quarter of 2023. The second phase of the project is expected to start construction in the fourth quarter of 2022 and be completed and put into production in the fourth quarter of 2024.

As soon as the news came out, Tianqi shares strongly pulled up and sealed the trading board in the good environment of the lithium battery plate the next day. Yesterday, the National Development and Reform Commission issued a notice on issuing the 14th five-year Plan for the Development of Circular economy about "continuously promoting the action of recycling waste batteries, strengthening the construction of traceability management platform for power batteries of new energy vehicles, improving the traceability management system for recovery and utilization of power batteries of new energy vehicles", and its view that it is necessary to cultivate backbone enterprises for comprehensive utilization of waste power batteries. All of them show how ingenious Tianqi shares are in this move.

Nowadays, with the increasing popularity of new energy vehicles, the recycling of power batteries has become the top priority of the future industrial development. How to safely and effectively recycle the battery and extract cobalt, lithium, rare and precious heavy metals is also a basic element that a qualified power battery recycling enterprise must have.

While Jintai Pavilion, the core subsidiary of Tianqi Co., Ltd., and Ganzhou Tianqi Lithium Industry Co., Ltd., have been focusing on the recycling and recycling of waste lithium batteries, and now have all the metal extraction technology of lithium ion batteries. Its production process has long been mature and has strong profitability. So the future of Tianqi shares is also worth looking forward to.

From the examples of the above companies, it is not difficult to see how hot the lithium battery industry is today. According to a recent research report released by the China Golden Research News, lithium supply and demand is expected to gradually become scarce in 2021-2025, and the fundamentals of the medium-and long-term lithium bull market are strong. On the demand side, the global transformation of new energy drives lithium demand into a new growth cycle. Power and energy storage batteries will contribute to the main increase in demand, with CAGR of 58 per cent and 32 per cent respectively. Global lithium demand is expected to increase from 430000 tons in 2021 to 1.5 million tons of LCE,CAGR37% in 2025.

On the supply side, the short-term global supply is lower than expected, the long-term uncertainty in the development of lithium resources is high, and the supply response speed may be difficult to match the growth of demand. Therefore, in CICC's view, medium-and long-term lithium prices are strongly supported by fundamentals, and the bull market will still exist.

This view coincides with SMM's prediction. According to SMM's previous research, from March to May 2021, China's spodumene concentrate maintained the situation of going to the warehouse, and mine orders were mainly signed on a quarterly basis with less spot. With the completion of orders in the third quarter, lithium ore prices have obviously risen. It is estimated that domestic demand for lithium ore will continue to rise in the second half of the year, while overseas supply is limited, and the upward trend is expected to remain. "View details

According to SMM historical prices, as of July 8, the average price of CIF Chinese spodumene concentrate was $735 per tonne, up 76 per cent this year.

"Click to see more historical prices of SMM Metals.

Up to now, lithium batteries are not only used in the power battery industry, coupled with the demand for energy storage batteries, some industry insiders predict that the global demand for lithium batteries is expected to reach 1400GWh in 2025.