SMM: recently, Xiamen Tungsten Industry (600549) disclosed its 2019 annual report. During the reporting period, the company realized consolidated operating income of 17.396 billion yuan, down 11.05% from the same period last year, and realized net profit of 261 million yuan, down 47.76% from the same period last year.

Xiamen tungsten industry is mainly engaged in tungsten concentrate, tungsten and molybdenum intermediate products, powder products, wire plates, cemented carbide, cutting tools, various rare earth oxides, rare earth metals, rare earth luminous materials, magnetic materials, hydrogen storage alloy powder, lithium battery materials and other new energy materials research and development, production and sales, as well as real estate development and management.

Among them, lithium electric materials, lithium cobalt acid, ternary materials production and marketing scale continued to increase significantly, market share further increased.

Among them, sales of lithium cobalt acid increased by 64.51% compared with the same period last year, but were affected by the continuous sharp drop in cobalt prices from January to July and the impact of high-priced inventories; sales of ternary materials increased by 66.02% compared with the same period last year, of which the proportion of high nickel products was further improved, and the profit of ternary materials nearly doubled from the same period last year.

On the same day, Xiamen Tungsten Industry also disclosed a quarterly report that the company's operating income for the first quarter was 3.54 billion yuan, down 7.29 percent from the same period last year, and the net profit attributable to shareholders of listed companies was 72.04 million yuan, an increase of 374.33 percent over the same period last year. Basic earnings per share 0.0512 yuan.

With regard to turning net profit into profit, Xiamen Tungsten Industry said that in the battery material business, the price of cobalt, the main raw material, was relatively stable in the first quarter of 2020, and the profit of battery material business increased greatly over the same period last year, with a total profit of 34.1558 million yuan and an increase of 76.2358 million yuan compared with the same period last year.

In terms of tungsten and molybdenum business, the price of tungsten and molybdenum was relatively stable in the first quarter of 2020, and the profit was improved compared with the same period last year. The total profit of tungsten, molybdenum and other non-ferrous metals business was 154.876 million yuan, an increase of 1483.21% over the same period last year.

It is worth noting that in order to strengthen the lithium cathode material business, Xiamen Tungsten Industry plans to spin off Xiamen Tungsten New Energy to be listed on the board.

On March 13, Xiamen Tungsten Industry issued a plan for the listing of Xiamen Tungsten New Energy Materials Co., Ltd., its subsidiary, Xiamen Tungsten New Energy Materials Co., Ltd., to be listed on the board of shares. After the completion of the split, the ownership structure of Xiamen Tungsten Industry will not change, and will still maintain control over Xiamen Tungsten New Energy.

In terms of the shareholders of the proposed spin-off company, Xiamen Tungsten Industry directly holds 53% of Xiamen Tungsten New Energy, which is the controlling shareholder of Xiamen Tungsten New Energy, Fujian rare Earth Group directly holds 32.05% of Xiamen Tungsten Industry, and is the controlling shareholder of listed companies.

Fujian SASAC holds 85.26% of Fujian rare Earth Group through Fujian Metallurgical holding, that is, Fujian SASAC is the actual controller of Xiamen Tungsten New Energy. In addition, Tianqi Lithium also holds a 3% stake in Xiamen Tungsten New Energy.

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