The net profit of Tianqi lithium industry increased by 112% compared with the same period last year. Medium-term planned production capacity of lithium chemical products exceeded 110000 tons / year.

Benefiting from the blowout of market demand, the temperament of lithium industry chain continues to improve, and the share price of "mineral" Tianqi Lithium Industry (002466.SZ) soars. From November last year to the close of August 27 this year, the share price has risen more than fivefold in 10 months, with a market capitalization of more than 190 billion yuan. The China News just disclosed also showed that the company's performance improved significantly in the first half of the year, with revenue of 2.351 billion yuan, an increase of 25.13% over the same period last year, and net profit of 85.7975 million yuan, an increase of 112.32% over the same period last year.

For the performance growth, the company explained several major reasons: first, the sales volume and prices of lithium chemical products increased significantly compared with the same period last year, and the total operating income and gross profit increased; second, during the reporting period, due to changes in the share price of SQM, the fair value change income from SQM's Class B leading options business increased compared with the same period last year; third, during the reporting period, the company's interest expenses decreased by 324 million yuan compared with the same period last year.

A reporter from the Financial Associated Press learned from people in the lithium industry that lithium products are still in a high economic market in the second half of the year. The rising prices of lithium products and the expansion of demand are mainly driven by the great increase in demand for new energy vehicles downstream. In addition, the demand for mobile phones and other electronic products is also good.

As the saying goes, "Lithium travels all over the world". Tianqi Lithium Industry's share price has soared naturally because of "Lithium". The company told the Financial Associated Press that at present, the company has a production capacity of about 44800 tons / year of lithium chemical products, as well as 48000 tons / year of lithium hydroxide and 20, 000 tons / year of battery-grade lithium carbonate under construction. The total planned production capacity of lithium chemical products in the medium term exceeds 110000 tons / year. The follow-up company will look for more like-minded investment and business partners, combined with market trends, company capital liquidity, project feasibility and other factors to comprehensively consider the project construction mode, in order to increase the market share.

The China Daily disclosed that the lithium product processing business of Tianqi Lithium Industry mainly relies on the production bases of Shehong, Sichuan, Zhangjiagang, Jiangsu and Tongliang, Chongqing, providing lithium carbonate, lithium hydroxide, lithium chloride and metal lithium products. Zhangjiagang base has the world's first fully automated battery-grade lithium carbonate production line; In addition, the company has two phases of battery-grade lithium hydroxide production lines with an annual production capacity of 48000 tons in Quinana, Western Australia, under construction and commissioning (the first phase of the project has entered a phased commissioning, and the second phase of the project is in a suspended state). In Suining Anju, the construction of a 20, 000-ton battery-grade lithium carbonate production line has been started (currently in a suspended state).

With regard to the progress of the project, the above-mentioned company told reporters that the debugging work of the first phase of Quinana project is progressing normally according to the established plan, and is still committed to realizing the stable operation of the whole process and the optimization of process control parameters, and strive to achieve the stage goal of achieving the state of marketable products and the factory entering formal operation and trial production by the end of 2021. In the process of trial production, the company will carry out targeted rectification work in time according to the problems that arise, so that the project will gradually achieve a sustained and stable production state, with a view to achieving the ultimate goal of achieving the design capacity by the end of 2022. The main project of the second phase of the project has been basically completed, but in view of the strong relationship between the second phase of the project and the first phase of the project, on the basis of effectively verifying the mature operation of the first phase of the project, the company will comprehensively demonstrate and adjust the construction plan of the second phase of lithium hydroxide project in the light of market demand and company liquidity.

The project of Anju with an annual production capacity of 20,000 tons of battery-grade lithium carbonate has previously completed a feasibility study, which is an important part of the company's medium-term production capacity planning. In the early stage, due to the company's financial pressure, the follow-up company will also consider whether to seek some positive ways to demonstrate the opportunity to restart construction in the light of market conditions.

In addition, public data show that Tianqi Lithium Industry is one of the few enterprises in the world that simultaneously distribute high-quality lithium mines and salt lake brine resources. Its holding subsidiary Terlison owns Greenbush spodumene mine in Australia. Sheng he Lithium Industry, a wholly-owned subsidiary, owns the mining right of Zola spodumene mine in Yajiang County, Sichuan Province, with 8.78 million tons of lithium reserves and 630000 tons of lithium reserves respectively. At the same time, the company through shares in Xigaze Zabuye and SQM, to achieve the distribution of high-quality salt lake lithium resources, the two have 1.83 million tons of lithium reserves and 45.51 million tons of lithium reserves. But at present, the only lithium-producing mine is the Greenbush Mine in Australia.

The company said that with the rapid growth of global sales of new energy vehicles and the active replenishment of the industrial chain, sufficient resource reserves will help to enhance the company's bargaining power and industrial chain status in the long run.

It is worth mentioning that the corporate debt problem, which is of general concern to the market, is also gradually improving. In 2018, Tianqi Lithium's asset-liability ratio and financial expenses rose sharply in order to complete a new M & A loan of US $3.5 billion for the purchase of shares in SQL. According to the China News, after raising 2.905 billion yuan to repay syndicated loans through a rights issue in January 2020, the company actively expanded new financing channels, accelerated equity financing, and strived to further optimize the debt structure. After signing the Investment Agreement with Australian investor IGO on December 9, 2020, the Company successively reached the delivery prerequisites agreed in the Investment Agreement in the first half of 2021 and received all the transaction consideration on July 2, 2021.

Since the fourth quarter of 2020, with the extension of syndicated loans, the successful promotion of overseas strategic investors, and the financial support of Tianqi Group, the controlling shareholder, and the gradual recovery of the lithium industry, the sales volume and prices of lithium products have risen steadily. The company's liquidity and sustainability have been gradually improved. At present, the company's asset-liability ratio has dropped to about 63%. " The above-mentioned company personage said that the company is continuing to promote the demonstration and implementation of equity financing instruments that help reduce the company's financial leverage, including but not limited to the introduction of strategic investors, H-share issuance, targeted additional issuance, market-oriented debt-to-equity swap, and so on, in order to solve the debt pressure as soon as possible and return the company's asset-liability ratio and financial leverage to a reasonable level.