Tianqi Lithium Corporation(09696.HK) has finished its IPO and listed in Hong Kong Stock Exchange on July 13, 2022. The IPO price was HKD 82. What is Qingdao AInnovation Technology Group Co., Ltd ? Here are the summary from the IPO prospect that you should know about this company.
What is Tianqi Lithium Corporation(09696.HK)?
Tianqi Lithium Corporation(09696.HK) a leading lithium producer in China and globally, and have been listed on the Shenzhen Stock Exchange since August 31, 2010 (stock code: 002466). The company own and mine lithium minerals in Australia and produce lithium compounds and derivatives in China. The company have not conducted any mining activities in China during the Track Record Period. One of subsidiaries is the largest mined lithium operator globally in terms of lithium concentrate output in 2021, with a market share of 38%, and it ranked third in terms of revenue generated from lithium in 2021, according to the Wood Mackenzie Report. The company are also the world’s fourth largest and Asia’s second largest lithium compound producer as measured by production output in 2021, with a market share of 7% and 12%, respectively, according to the same source. The company are well-positioned to capitalize on the new energy revolution globally, particularly in the EV and energy storage sectors. The company generates revenue from two business segments, which are sales of lithium compounds
and derivatives and sales of lithium concentrates.
Market of Lithium Mining Industry
The supply of mined lithium is dominated by five producers, with an aggregate market share of
approximately 85% in terms of output in 2021, among which Albemarle, SQM, Ganfeng and Tianqi Lithium Corporation are the key players, according to the Wood Mackenzie Report. These four companies
accounted for approximately 50% of the global supply of the refined lithium products, which include
lithium compounds and lithium metal in 2021. According to the Wood Mackenzie Report, these four companies were also the top four lithium compound producers and Tianqi Lithium Corporation were the world’s fourth largest and Asia’s second largest lithium compound producer in 2021. For battery-grade lithium carbonate, the major producers include Albemarle, Tianqi Lithium Corporation, SQM, Nanshi Group and Ganfeng, with an aggregate market share of around 57% as measured by output in 2021, according to the Wood Mackenzie Report. For battery-grade lithium hydroxide products, the market is becoming increasingly competitive due to the increase in demand since 2015, and Tianqi Lithium Corporation are one of the world’s top ten suppliers of battery-grade lithium hydroxide in terms
of production output in 2021, according to the same source.
The global annual lithium demand is expected to increase at a CAGR of 15.4% from 2022 to
2026, reaching a total of 1.07 million tons LCE in 2026, according to the Wood Mackenzie Report. In
particular, lithium demand from lithium-ion batteries for use as EV rechargeable batteries, one of Tianqi Lithium Corporation key end-markets, is estimated to grow at a CAGR of 21.2% from 2022 to 2026, reaching a total of 675.4 thousand tons LCE in 2026, according to the Wood Mackenzie Report. In addition, along with the global energy transition and “carbon neutrality” goals, energy storage system will also be one of the fastest growing end markets for the lithium industry in the next ten years. According to the Wood Mackenzie Report, the lithium demand for energy storage system is expected to grow at a CAGR of 11.6% from 2022 to 2026, reaching 59.0 thousand tons LCE by 2026.
Financial Highlights
As required by the Shenzhen Stock Exchange listing rules, the company published quarterly report on
April 30, 2022. Revenue significantly increased from RMB899.6 million for the three months ended
March 31, 2021 to RMB5,213.1 million for the three months ended March 31, 2022, primarily
attributable to the increased revenue generated from sales of both lithium compounds and derivatives
and lithium concentrate segments, which were mainly driven by increased average selling prices of
both segments and the increased sales volume of lithium concentrate. The average selling price of
lithium compounds and derivatives increased significantly from RMB59,280.9 per ton for the three
months ended March 31, 2021 to RMB326,525.4 per ton for the three months ended March 31, 2022,
and the average selling price of lithium concentrates increased from RMB3,451.3 per ton to RMB11,576.5 per ton during the same period. The sales volume of lithium concentrates increased from 97,160 tons for the three months ended March 31, 2021 to 168,841 tons for the three months ended March 31, 2022.
Cost of sales increased from RMB490.9 million for the three months ended March 31, 2021 to RMB772.2 million for the three months ended March 31, 2022. Gross profit significantly increased from RMB408.7 million for the three months ended March 31, 2021 to RMB4,441.0 million for the three months ended March 31, 2022. Net profit of RMB4,563.6 million for the three months ended March 31, 2022, as compared to a net loss of RMB180.5 million for the three months ended March 31, 2021.
Conclusion
Tianqi Lithium Corporation is one of the main player in the oligopoly lithium market. It creates a barrier for new player to enter the market. For long run, the company should be able to benefit from the growth of electric vehicle and energy storage sectors.
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