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Tianqi Lithium, one of China’s biggest lithium miners, reported first-half revenue surged 508.05% from a year earlier to 14.3 billion yuan and net profit skyrocketed 11,937% on year to 10.3 billion yuan.
The company plans to spend 136 – 200 million yuan on share repurchases at prices no higher than 150 yuan per share, it said.
In the second quarter, Tianqi’s revenue was 9 billion yuan, up 524.7% from a year earlier and rising 71.9% from the first quarter. Net profit in the second quarter reached 7 billion yuan, up 1,997% on yuan and soared 110% from the previous quarter.
After excluding one-time items, Tianqi’s net profit in the second quarter reached 6.4 billion yuan, skyrocketing 3,516% from a year earlier and surging 127.5% from the first quarter.
The company’s lithium compound products business generated operating revenue of 9.8 billion yuan in the first half, up 560.7% on year, with a gross margin up 40.86 percentage points to 87.54%, it said.
Its gearing ratio dropped to about 28 percent at the end of July from 45.6 percent at the end of June and 58.9 percent at the end of 2021’s first half, the firm said.
Tianqi Lithium plans to restart a project at Yajiang Cuola Mine in Sichuan “to address the potential risks of lithium resource shortage and reliance on import of raw materials in the future,” it said. The company had already announced in July that it aims to more than double its capacity in the coming three years.
Li Guo, Vice President of Tianqi Lithiumcsaid at its earnings call that “based on current information, the lithium salt market is still facing a supply shortage.”
“Considering the market supply and demand, the shortage will remain in the next 18 months, though the tightness will likely ease to some extend as new capacity is gradually put into operations,” said Li.
Lithium carbonate prices have jumped almost 80% in China so far this year, with the recent power crunch in Sichuan adding impetus to the rally. Demand for the battery material, meanwhile, is accelerating as the automotive industry increasingly turns to electric vehicles. UBS Group has lifted its long-term price forecast for battery-grade lithium by 38%, as incentivizing new supply will require even higher prices, it said in a recent note.