Tianqi Lithium Industry: where will the stock price go after the production capacity of lithium carbonate is expected to reach 120000 tons in 2021?

Under the wave of new energy vehicles, its share price began an unstoppable surge in April 2020. But back after the Spring Festival, its share price experienced a wave of plummeting. On March 11, Tianqi Lithium shares closed up 2.25% at 40.06 yuan per share after days of declines.

As the largest supplier of lithium new energy core materials in China and the largest producer of lithium extraction from ores in the world, Tianqi Lithium Electric holds the most advanced lithium industry technology in China.

In response to questions from investors, Tianqi Lithium Industry said that it produced more than 70, 000 tons of lithium carbonate in 2020 and is expected to produce 120000 tons / year of lithium carbonate in 2021 and 180000 tons / year in 2023.

At the same time, in response to the problems of other investors, Tianqi Lithium Industry revealed that it is one of the few companies in the world to distribute both high-quality lithium mines and salt lake brine resources, and has a strong ability to control global resources. These rich resources provide the company with low-cost lithium concentrate as raw materials for the production of lithium carbonate, lithium hydroxide and other lithium chemical products.

Recently, domestic demand for lithium materials has continued to improve, and on March 10, a number of lithium carbonate companies, including Sichuan Rong Lithium Technology and Qinghai Zhonghong Mining, also raised product prices. The agency believes that the current round of lithium carbonate price rise is mainly driven by the downstream demand end. Since the second half of 2020, the sales of new energy vehicles have increased month by month, and the demand for power batteries and lithium batteries has warmed up, leading to a significant increase in lithium carbonate demand. While the industry inventory has declined rapidly, seasonal supply has begun to fall short of demand, which eventually led to a rebound in low prices.

In response to the question of whether rising lithium prices can alleviate the recent huge debt of Tianqi Lithium Industry, Tianqi Lithium Industry responded that the company is stepping up its demonstration of various equity financing instruments that help to reduce the company's debt leverage, in order to fundamentally optimize the company's asset-liability structure, improve profitability and cash flow level, and return the company's asset-liability ratio and financial leverage to a reasonable level.

According to the previous performance forecast issued by Tianqi Lithium Industry, the company's net profit loss of 2.27 billion yuan to 1.36 billion yuan in 2020, deducting a non-net profit loss of 1.665 billion yuan to 860 million yuan, although the net profit is still in the loss, but the loss began to narrow. Operating income is 3 billion yuan to 3.4 billion yuan, compared with the same period last year, the decline is still more obvious.

The main reason for the decline in revenue is that the price of lithium chemicals continued to decline in the first and third quarters of 2020, coupled with the reduction of export share as a result of the expansion of the overseas novel coronavirus epidemic, so even though lithium chemical products have rebounded since the fourth quarter of 2020, but taken together, the company's average product price and sales this year are lower than in 2019.

In addition, affected by SQM stock prices, Libor interest rate fluctuations and other factors, the fair value changes generated by the SQM2.1% B-share leading options business in 2020 and the investment income generated by the hedging business led to a reduction of about 500 million yuan in the company's net profit belonging to shareholders of the listed company, a decrease of 346.8% compared with 2019.

March 11, Tianqi Lithium Industry Australia project added variables, Tianqi Lithium Industry (002466) issued a notice that recently received a payment order from the Supreme Court of Western Australia, the company's wholly-owned subsidiary TLK within 7 days (that is, before March 15, 2021) to pay the project arrears to MSP, the total principal and interest amount is A $38.8815 million.

For the follow-up development of Tianqi lithium industry, considering the outstanding performance of the company's stock price from November last year to January this year, the company's stock price rose from 19.17 yuan to 70.13 yuan, with a maximum increase of more than 2.6 times. Combined with Tianqi lithium industry's previous response to debt problems, brokerage research reports believe that with the rise of the industry boom and the rise of lithium prices, the value of lithium resources enterprises is facing revaluation. Considering the long-term competitiveness of the company as the global leader in lithium resources, it is expected that the company will be ready to go after the debt problem is further resolved.