On July 5th, Tianqi Lithium Industry (002466.SZ), one of the "Lithium King", rose sharply, with the highest price reaching 72.93 yuan per share, which is its all-time high. As the total share capital of Tianqi Lithium Industry is 1.477 billion shares, its maximum market capitalization is more than 100 billion yuan, reaching 107.8 billion yuan.
As of the close of the day, Tianqi Lithium Industry was at 72.32 yuan per share, up 5.93 yuan per share or 8.93%. At present, its market capitalization is 106.8 billion yuan.
In fact, lithium stocks on the A-share market rose by the daily limit on July 5. For example, Tianhua Ultra Clean (300390, up 20.00%), Jiangte Electric (002176, up 9.99%), Rongjie (002192, up 10.00%), Ya Hua Group (002497, up 10.00%), Ganfeng Lithium (002460, up 10.00%), China Mineral Resources (002738, up 9.99%), Tibet Mining (000762, up 10.02%), Sheng Xin Lithium (002240, up 10.00%), Shengxin Lithium (002240, up 10.00%)
Lithium carbonate futures hit the limit on the first day of trading.
The reason why Tianqi Lithium Power rose by hundreds of billions of dollars in market value and made lithium industry stocks "restless" in a large area may be directly related to a piece of news: on July 5, Wuxi electronic disk newly listed lithium carbonate forward contract, which rose by the limit of 96.5 immediately after the opening of trading, and has maintained a high level since then.
There is a market point of view that the introduction of lithium carbonate contract or the rapid rise of lithium carbonate futures prices in the short term and increase price volatility will have a greater impact on lithium market pricing and stock market in the long run.
According to the data, at present, there are four settlement brands and manufacturers identified by Wuxi Center. they are Sichuan Guoli Lithium (which belongs to Ya Hua Group), Stelli Industry, Dongtai Guinel Lithium Resources (belonging to CITIC Guoan / Western Mining), and Silver Lithium New Energy (belonging to Jiangte Motor).
It is worth mentioning that Jiangte Motor is closed and closed, which is already the third consecutive trading board of Jiangte Motor; Ya Hua Group also has no suspense trading limit.
Lithium products are bullish in the future.
According to data from the China Automobile Association, the production and sale of new energy vehicles in China completed 217000 units in May 2021, of which sales increased by 159.7% compared with the same period last year. In addition, the production and sales of new energy vehicles completed 967000 and 950000 respectively from January to May this year, an increase of 2.2 times over the same period last year.
In overseas markets, the intensity and scope of subsidies for electric vehicles in the United States are unprecedented, as reflected in the data, the sales of new energy vehicles in the United States reached 58000 in May, greatly exceeding market expectations; sales of new energy vehicles in the European market also increased by about 12% in May compared with the previous month.
According to forecasts from Soochow's new team, global electric vehicle sales are expected to reach 5.5 million-5.7 million in 2021, up 80 per cent from a year earlier.
With the popularity of new energy vehicles, the demand for battery raw materials lithium carbonate and lithium hydroxide will increase exponentially. Last week, the prices of battery-grade lithium carbonate and battery-grade lithium hydroxide were 89000 yuan / ton and 101000 yuan / ton, respectively, up 1000 yuan / ton from last week, according to data from Shanghai Nonferrous net.
As can be seen from the above data, the price of battery-grade lithium hydroxide (micro-powder grade) has exceeded 100000 yuan / ton, opening up a rising space of 100000 yuan / ton.
By comparison, the price of battery-grade lithium carbonate has risen from a low of 38000 yuan / ton last year to an average of 87500 yuan / ton, an increase of 130%!
Cinda Securities pointed out that in the third quarter, the new energy vehicle and 3C market will usher in the peak consumption season, but there is not much marginal increment on the supply side of lithium resources, and lithium prices are expected to accelerate in an all-time high.
One example is that in 2020, investors in the secondary market are more optimistic than those in the industry, predicting that the price of lithium hexafluorophosphate will double and the result will be more than tripled. it is predicted that the silicon material will rise from 55000 yuan / ton to 100000 yuan / ton, as a result, the silicon material will rise to more than 200000 yuan / ton.
Tianqi Lithium Industry risk release King returns
The risk for Tianqi lithium industry lies in the acquisition of a 23.77 per cent stake in SQM, which owns the world's largest salt lake lithium mine, in 2018 with a loan of $3.5 billion.
It is understood that in order to acquire shares in SQM, Tianqi Lithium Industry has carried out leveraged mergers and acquisitions, paying interest of more than 1 billion yuan every year. To make matters worse, the purchase price of Tianqi Lithium Industry happened to be at the high point of SQM, and the price of Lithium Mine continued to fall over the next two years, and Tianqi Lithium acquisition did not quickly bring cash flow to the company.
This directly leads to the long-term blood loss of Tianqi lithium industry from 2018 to 2020.
In November 2020, Tianqi lithium industry ushered in the "dark moment": unable to repay the $1.884 billion loan as expected.
The dawn also came at the most dangerous time: Citic syndicate extended the $1.884 billion loan that was due to be repaid by the end of December 2020 until the end of November 2021. At the same time, Tianqi Lithium also brought in strategic investors for its subsidiaries and received $1.4 billion in cash support from IGO.
According to the latest news, TLEA has registered a change in its equity in accordance with the delivery process, with 51 per cent of Lithium shares and 49 per cent of investors. Tianqi Lithium Industry wholly-owned subsidiary of the capital expansion and the introduction of strategic investors has been completed.
What is more gratifying is that, as mentioned earlier, the price of lithium ore has begun to pick up, giving Tianqi lithium industry a chance to "return blood".
It is worth mentioning that Science and Technology Innovation Board IPO of Xiamen Tungsten Xineng was approved to be registered by the CSRC on June 29, while Tianqi Lithium invested and held about 3 per cent of Xiamen Tungsten Xineng.
Guojin Securities pointed out in a recent research report that with more than half of the debts of Tianqi Lithium Industry resolved and the asset-liability ratio declining, the performance is expected to turn from deficit to profit in 2021. After a comprehensive consideration of the valuation level of the leading Ganfeng lithium industry, Tianqi lithium industry is given a reasonable market capitalization of about 130 billion yuan, a target price of 88 yuan, and a "buy" rating for the first time.
The main reasons for Guojin Securities are: the dust of IGO trading has settled, the debt pressure has been alleviated, the layout of the world's best lithium resources, and the Quinana project is about to be put into production to make up for the deficiency in lithium salt processing.
From the perspective of lithium resources, it is understood that Tianqi Lithium Industry has two of the best lithium resources in the world, namely, Terlison in Australia and SQM in Chile.
Terlison's lithium supply accounts for about 25% of the global market, and Terlison's Greenbush mine has a higher average lithium oxide grade of 2.1%, and due to years of mature operation, the project's chemical-grade lithium concentrate production and operating costs are among the lowest in the world.
SQM is the world's largest producer of lithium salt, with a global market share of about 27%. Tianqi Lithium Industry has realized the strategic layout of salt lake brine-type lithium resources by acquiring 23.77% of SQM, which owns the right to exploit Atacama Salt Lake.
In terms of production capacity, Tianqi Lithium Industry currently has a total capacity of about 44800 tons / year of lithium chemical products, including 34500 tons / year of lithium carbonate and 5000 tons / year of lithium hydroxide. In addition, Tianqi Lithium Industry also has 48000 tons / year of lithium hydroxide and 20, 000 tons of battery-grade lithium carbonate under construction, of which Quinana's first phase of 24000 tons of lithium hydroxide project aims to reach production in the fourth quarter of 2022.
The latest news is: on July 5, Tianqi Lithium Industry said on the interactive platform that Quinana's first phase of 24000 tons of lithium hydroxide project aims to start production in 2021 and reach production in the fourth quarter of 2022.
