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Caixin Media News on October 28th (Reporter Zeng Chuchu): In the first and second quarters of this year, amid losses in some lithium companies, Sinomine Resource Group (002738.SZ) maintained a good profit level, but conversely, Q3 adjusted net income plummeted.

Sinomine Resource Group released its performance report for the third quarter today, with the company achieving revenue of approximately 3.569 billion yuan in the first three quarters of 2024, a year-on-year decrease of 28.69%; the net income attributable to the shareholders of the listed company was approximately 0.546 billion yuan, a year-on-year decrease of 73.64%.

In Q3, the company achieved operating income of 1.148 billion yuan, with an adjusted net income of -29.5158 million yuan. Compared to Q2's adjusted net income of 0.217 billion yuan, there was a quarter-on-quarter shift from profit to loss in Q3. A non-recurring gain of 0.102 billion yuan mainly came from investment income.

According to the third-quarter report, the 28.69% year-on-year decline in revenue for the first three quarters was mainly due to the fallback in lithium battery material prices. Looking at Q3, Sinomine Resource Group's revenue was 1.148 billion, an 11.4% sequential decline, while total operating costs increased by 31.04% sequentially. Q3 net income fell by 66.44% sequentially, with a gross margin also dropping to 22.46%, down 22.25 percentage points from the previous quarter.

According to Shanghai Ganglian E-Commerce Holdings data, in Q3 of this year, lithium carbonate prices dropped from 0.1005 million yuan/ton at the beginning of June to 0.0765 million yuan/ton by the end of September, a decrease of 23.88%.

Looking at the first three quarters, Sinomine Resource Group's inventory increased by nearly 0.8 billion yuan to 2.175 billion yuan compared to the same period last year. The company explained that this was mainly due to an increase in inventory and outbound goods. Notes payable increased by 1470.94% to 1.029 billion yuan year-on-year, with the company stating in the announcement that this was mainly due to new domestic and international letter of credit settlements.

It is noteworthy that the price of lithium carbonate continues to decline, which has surprised Contemporary Amperex Technology. In late September, Contemporary Amperex Technology adjusted the production arrangement of lithium carbonate in Yichun, and even based on the principle of caution, made impairment of mineral assets and mining rights related to lithium carbonate prices in the third quarter report. And at a recent performance interpretation meeting, it was indicated that the decision to resume work will further depend on the price and cost reduction measures.

Shanghai Ganglian E-commerce Holdings' new energy business unit lithium analyst Li Pan told Caixin reporters that after the bottoming out of lithium carbonate prices in the third quarter, prices rebounded and stabilized, mainly due to the oversupply of lithium carbonate in July and August. In the absence of substantial production cuts in the upstream and with no unexpected increase in demand, prices have fallen.

Li Pan estimates that lithium carbonate prices will still experience a weak and fluctuating trend in the fourth quarter. In November, downstream demand has warmed slightly compared to the early October estimate, with still a certain gap in November's monthly supply of lithium carbonate. It is estimated that there is still some support for lithium carbonate prices in November, with current upstream psychological hedging prices ranging from 78000 to 80000 yuan per ton. It is estimated that the monthly supply of lithium carbonate will turn into an oversupply by December, and prices will continue to fall.