After the approval of the CSRCTianqi Lithium Industry (002466.SZ) $The listing plan of Hong Kong shares is again approved by the Stock Exchange of Hong Kong.
According to the official website of the Stock Exchange, Tianqi Lithium has been listed through the Stock Exchange, and the co-sponsors are Morgan Stanley, China International Capital Corporation and China Silver International.
Tianqi Lithium is considering raising $1 billion to $1.2 billion through the IPO, Bloomberg said, citing people familiar with the matter. This will be the largest IPO of the Stock Exchange this year.
Tianqi Lithium plans to start assessing investor demand for the offering as early as this week. At present, the amount of financing and listing events are still under consideration, and the details may change.
According to the post-hearing data set, Tianqi Lithium intends to use the funds raised from the listing to repay the outstanding balance of SQM debts and related transaction fees; investment in the first phase of the Anju plant; working capital and general corporate uses.
Tianqi Lithium once owed huge debts as a result of acquisitions. In December 2018, Tianqi Lithium, with a net worth of only 12 billion yuan, bought 23.77 percent of Chilean lithium miner SQM, making it its second-largest shareholder and borrowed a total of $3.5 billion (23.3 billion yuan) from domestic and foreign syndicates.
Tianqi Lithium Industry originally planned to borrow Hong Kong stock IPO financing to ease debt pressure, but the listing was suspended because lithium prices were at a cyclical trough and Jiang Weiping, the company's chairman, thought Hong Kong stocks were undervalued. Tianqi lithium industry fell into a debt crisis in 2020, but the company turned a profit in the first half of the year as the lithium mine market improved and prices soared in 2021.
Benefiting from the outbreak of the new energy vehicle market, the upstream cycle of lithium resources is very rapid. Xin spinulosa Lithium Power data show that domestic lithium carbonate prices broke through a high of 500000 yuan / ton in the first quarter and declined slightly in April and May due to weak demand caused by the epidemic, but recently the momentum has stabilized and prices have fluctuated at high levels. the latest market average price is 477500 yuan / ton. Lithium prices are widely expected to remain high this year.
According to the announcement, in the first quarter of 2022, Tianqi Lithium Industry achieved revenue of 5.257 billion yuan, an increase of 481.41 percent over the same period last year, and its net profit was 3.328 billion yuan, an increase of 14.4 percent over the same period last year, exceeding 60 percent of the net profit for the whole year of 2021. Taking a stake in SQM also brings huge profits. According to the company, the net profit of SQM increased 10.7 times in the first quarter compared with the same period last year. According to this, Tianqi Lithium is expected to increase its net profit by about 620 million yuan in the first half of 2022.
The debt situation has also improved significantly. By the end of March 2022, Tianqi Lithium Industry had total assets of 46.73 billion yuan, total liabilities of 24.23 billion yuan, and an asset-liability ratio of 51.85 percent, down 30.47 percent from 2020. The balance of M & A loans for SQM is $1.37 billion (about 9.13 billion yuan), of which about $240 million (about 1.6 billion yuan) will mature in November this year.
After a recent rebound in the lithium mining sector, Tianqi Lithium shares have doubled from their first-quarter lows, closing at 119.02 yuan per share on June 17, with a total market capitalization of 175.804 billion yuan.
Xia Juncheng, director and president of Tianqi Lithium Industry, said earlier that the financing of H-share issuance is of great significance to the future development of the company, which will help the company to further optimize its capital structure, reduce leverage and financial risks, reduce financial costs and enhance profitability; at the same time, benefiting from the rapid development of downstream markets, the company's product demand is strong, and H-share issuance financing will help the company to seize industry opportunities and further develop its core business. In addition, the issuance of H shares will help the company to expand overseas financing channels, further enhance the company's international reputation and influence, and lay a good foundation for the company to continue to implement the internationalization strategy in the future.
According to the Wood Mackenzie report, Tianqi Lithium is the world's largest lithium producer in terms of 2020 production; Tianqi Lithium ranks third in terms of 2020 lithium revenue; and Tianqi Lithium is the fourth largest producer of lithium compounds in the world and the second largest in Asia in terms of 2020 production.