On the evening of January 23, China’s leading lithium resource company, Tianqi Lithium, handed in its worst performance report in history. The company’s 2024 performance forecast indicated that the net loss for 2024 is expected to reach as high as 8.2 billion yuan.
Tianqi Lithium released its 2024 performance forecast, foreseeing a net loss between 8.2 billion yuan and 7.1 billion yuan for the year 2024 attributable to the company’s shareholders.
The company stated that due to the fluctuations in the lithium product market, the overall market price of lithium products during the reporting period showed a significant downward trend, resulting in a sharp decrease in the company’s lithium product sales prices and gross profit compared to the same period last year. Additionally, the mismatch in the pricing mechanisms of chemical-grade lithium concentrate of its subsidiary Talison Lithium Pty Ltd (Talison) and the company’s lithium chemical product sales pricing mechanism led to a phase of operational losses for the company during the reporting period.
The increasing losses of Tianqi Lithium are also related to asset impairment. In another announcement made by the company on the evening of January 23, it was revealed that based on preliminary calculations by the company’s finance department, the total estimated amount of provisions for asset impairment to be made in 2024 is approximately 2.163 billion yuan, which is expected to reduce Tianqi Lithium’s attributable net profit to the parent company’s shareholders by about 770 million yuan, consequently reducing the equity attributable to the parent company’s owners by 770 million yuan as of the end of 2024.
According to reports from Zhongcai.com, over the past two years, the price of lithium carbonate has been continuously declining, breaking through the 90,000, 80,000, and 70,000 yuan integers. Tianqi Lithium has been incurring losses since the last quarter of 2023 and has now sustained losses for four consecutive quarters, totaling nearly 9 billion yuan.
In April 2024, Tianqi Lithium completed the relay of the company’s “leader”, with Jiang Anqi, the daughter of founder Jiang Weiping, at the age of 37, officially assuming the position of the company’s chairman in succession to her father. At that time, Tianqi Lithium had a market value of 60 billion yuan. However, nine months after the new leader took office, accompanied by poor performance, the company’s market value plummeted to only 50 billion yuan, evaporating 10 billion yuan.
Public information shows that Tianqi Lithium is the largest supplier of lithium battery new energy core materials in China and the world’s largest lithium ore producer. In 2018, Tianqi Lithium acquired a 23.77% stake in Chilean lithium miner SQM for $4.1 billion.
As of January 21, according to Wind’s lithium battery index, 25 companies have issued their 2024 performance forecasts, with only three companies expecting growth. Additionally, 14 companies predicted a deficit, while 7 anticipate a decline.
According to incomplete statistics, among the sample companies in the lithium battery industry that have already predicted deficits, at least some, such as China National Chemical Corporation, Shenzhen Newstar, and Jiangte Electric, plan to impair assets, with some companies reporting impairment amounts of up to 1 billion yuan.
As reported by “Caijing,” the planned asset impairment by these companies specifically involves losses in inventory, construction in progress, accounts receivable, credit impairment, etc., all of which are expected to significantly impact the operational performance for 2024.