Today (April 23) Zhifei Biotech, Wingtech, Orchid Science and Innovation plummeted by 10 points, all due to a thunderstorm in performance. Tonight, the “Lithium King” giant also experienced thunderstorms, and it was even bigger.

Tianqi Lithium's stock price has been falling continuously in recent years, from a high of 145 yuan to 45 yuan. Tonight, 300,000 shareholders will be sleepless again.

The highest advance loss for the first quarter was 4.3 billion

On the evening of April 23, Tianqi Lithium, the world's leading lithium company, announced that the companyNet profit loss attributable to shareholders of listed companies is expected to be 3.6 billion yuan to 4.3 billion yuan in the first quarter of 2024The year-on-year change from profit to loss was 4.875 billion yuan in profit for the same period last year.

As for the reason for the huge loss, Tianqi Lithium explained that there are two main reasons:

First, due to fluctuations in the lithium product market, the sales price of the company's lithium products dropped sharply compared to the same period last year, and the gross profit of lithium products dropped sharply.

Second, it is related to SQM, an important affiliate of the company. SQM's performance for the first quarter is expected to drop sharply year over year.

SQM is a Chilean mining company. Tianqi Lithium bought nearly 25% of their shares a few years ago, which is a very important foreign investment.

Tianqi Lithium said that as of the announcement date of this performance forecast, SQM had not announced its first quarter 2024 results report. The company comprehensively considers the reliable information it can obtain, and uses a consistent method to calculate the company's investment income in SQM for the same period based on information such as SQM's earnings per share for the first quarter of 2024 predicted by Bloomberg.

Additionally, SQM issued a notice stating that the Santiago de Chile court ruled on its tax lawsuit for the 2017 and 2018 tax years in April 2024, revoking the tax and customs court's ruling on the case on November 7, 2022. SQM re-examines the accounting treatment of all tax dispute amounts based on the latest ruling.It is also expected to reduce its net profit for the first quarter of 2024 by approximately $1.1 billion.Tianqi Lithium said that based on the principle of prudence and after repeated arguments, the company believes that confirming the impact of the above SQM tax dispute ruling is more in line with accounting standards in the investment income of the associated company during this reporting period. It is expected that this matter will reduce the company's net profit to its mother.

Tianqi Lithium pointed out that according to the aforementioned Bloomberg forecast data, combined with the impact of the SQM tax dispute ruling, SQM's first quarter results are expected to drop sharply year-on-year, so the investment income confirmed by the company during the reporting period in this joint venture fell sharply compared to the same period last year.

Shenzhen Stock Exchange “Lightning” took action and issued a letter of concern

The storm of Tianqi Lithium's quarterly report also attracted the attention of exchanges. The Shenzhen Stock Exchange issued a letter of concern to Tianqi Lithium overnight, requesting a quantitative analysis of the reasons why losses in the first quarter of 2024 increased significantly compared to the fourth quarter of 2023, taking into account specific changes in factors such as main business development, product production and sales, product prices, raw material purchase prices, costs and expenses, and impairment accruals, and explain whether there is a continuing risk of loss.

At the same time, the Shenzhen Stock Exchange also requested the company to explain the details and subsequent progress of the SQM tax dispute ruling, as well as the amount of impact on net profit for the first quarter and the basis for calculation. Furthermore, the Shenzhen Stock Exchange also asked whether Tianqi Lithium confirmed the impact of the tax dispute ruling in the first quarter and complied with the relevant requirements of corporate accounting standards.

Stalling lithium prices are dragging down miner performance

Over the past year, the price of lithium carbonateIt staged a rollercoaster trend, falling from a high of 300,000 yuan/ton in June 2023 to a low of 91,000 yuan/ton in 2024. After entering March, it began to rebound slightly. As of April 23, 2024, the price of industrial grade lithium carbonate was 109,000 yuan/ton.

Judging from the performance indicators, many lithium salt manufacturers that had previously had “unlimited success” have all fallen into a state of loss, and both revenue and net profit declined in 2023.

Giant Ganfeng Lithium achieved operating income of 32.972 billion yuan in 2023, a year-on-year decrease of 21.16%; realized net profit of 4.947 billion yuan, a year-on-year decrease of 75.87%. The decline in the price of lithium salt products is a key factor in the company's declining performance.

Tianqi Lithium was also impacted by fluctuations in lithium salt prices. The company achieved revenue of 40.503 billion yuan in 2023, an increase of 0.13% over the previous year, and realized net profit of 7.297 billion yuan, a year-on-year decrease of 69.75%.

Furthermore, the performance of many “lithium-related” companies, including Zangge Mining and Shengxin Lithium Energy, declined to varying degrees in 2023.

Some people from lithium mining companies said that in the past two years, they have benefited from a sharp rise in lithium prices, and the performance of industrial companies has surged one after another. Now, with lithium prices returning to rationality, a decline in performance is inevitable.

Although the price dividend may never be over, according to industry insiders, there is still demand for lithium salt products themselves in the context of the rapid development of new energy vehicles and energy storage industries.