Affected by the decline in lithium salt prices, Tianhua New Energy's revenue and net income both fell in the first half of this year. In terms of the industry, the recent price of lithium carbonate has continued to decline to less than 0.08 million yuan/ton. As for the trend of lithium carbonate in Q3, industry insiders said that the growth in demand in Q3 has not improved much based on the current bidding volume of downstream enterprises.
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On August 6th, Financial Associated Press (Reporter Zeng Chuchu) reported that affected by the decline in lithium salt prices, Tianhua New Energy (300390.SZ) has seen a decrease in revenue and net income in the first half of this year.
Tonight, Tianhua New Energy released its semi-annual report for 2024. The company achieved operating income of 3.713 billion yuan in the first half of the year, a year-on-year decrease of 44.09%. Net profit attributable to shareholders of listed companies was 0.835 billion yuan, a year-on-year decrease of 39.26%. Net income for Q1 was 0.5 billion yuan, while net income for Q2 was 0.33 billion yuan, a decrease of 33.69% month-on-month. However, looking at the company's non-GAAP net profit, Q2 increased by 1.91% month-on-month. On the decline in revenue, the company explained in its semi-annual report that the main reason was the sharp drop in the selling price of its main product, lithium hydroxide, during the reporting period. The semi-annual report showed that the company's gross margin of lithium battery materials products decreased by 12.59% year-on-year to 17.91%.
As for the revenue decline, the company explained in its semi-annual report that the main reason was the sharp drop in the selling price of its main product, lithium hydroxide, during the reporting period. The semi-annual report showed that the gross margin of the company's lithium battery materials products decreased by 12.59 percentage points year-on-year to 17.91%.
Since the beginning of the year, the fluctuation range of lithium carbonate prices has narrowed and has been hovering between 0.09 to 0.12 million yuan/ton, which is in the price bottom range of the past two years. According to the data from Longzhong Information, the average market price for battery-grade lithium carbonate in the first half of this year was 0.1037 million yuan/ton, a year-on-year decrease of 68.95%.
According to the semi-annual report, Tianhua New Energy's three major business areas are new energy lithium battery materials, anti-static ultra-clean technology products, and medical device products. Of these, the revenue share of new energy lithium battery materials business was 89.29%, while the revenue share of anti-static ultra-clean technology products and medical device products businesses did not reach more than 10% as the disclosure standard.
In terms of lithium salt production capacity, according to the company's public disclosure, Tianhua New Energy has a total annual lithium salt production capacity of 0.165 million tons, including Tianyi Lithium Industry (a joint venture with Contemporary Amperex Technology, in which Tianhua New Energy holds a 75% stake) with an annual production capacity of 0.05 million tons of lithium hydroxide, Sichuan Tianhua with an annual production capacity of 0.06 million tons of lithium hydroxide, NAE (Canmax Technologies) with an annual production capacity of 0.025 million tons of battery-grade lithium hydroxide, and Fengxin Era with an annual production capacity of 0.03 million tons of battery-grade lithium carbonate.
In the current situation of oversupply of lithium salt, production capacity has a greater impact on utilization. In Tianhua New Energy's investor survey in April this year, when asked about the company's production capacity utilization rate in the current downward trend of lithium salt prices, Tianhua New Energy did not directly respond, only mentioning that "the company's production capacity utilization rate is good".
However, looking at the capital-raising commitment projects in the semi-annual report, NAE's 0.025-million-ton battery-grade lithium hydroxide project reached the scheduled usable state in December last year, but did not achieve benefits in the first half of this year.
In terms of the industry, the recent price of lithium carbonate has continued to decline to less than 0.08 million yuan/ton. To date, it has only slightly rebounded. According to data from Shanghai Ganglian E-commerce Holdings, the price of battery-grade lithium carbonate has increased by 500 yuan from the last price hike, with an average price of 0.08 million yuan/ton.
Zheng Xiaoqiang, an analyst at the Lithium Division of Shanghai Ganglian, said to Financial Associated Press that the main reason for the continued decline in the price of lithium carbonate in recent times is the continued high volume of supply from the supply side, mainly from the stability of the supply of spodumene and mica material manufacturers, combined with the improvement in salt lake production efficiency in summer, resulting in a sharp drop in demand and a large surplus in overall supply.
As for the Q3 trend of lithium carbonate, Zheng Xiaoqiang said that based on the current bidding volume of downstream enterprises, the growth in demand in Q3 has not improved much. In addition, the competition among downstream material manufacturers for bidding prices has become increasingly fierce, with many iron-lithium manufacturers facing the situation of losing processing fees and only maintaining enterprise operations.