SQM's performance decline led to a decline in shi'd investment income, and Tianqi Lithium lost 697 million in the first half of the year

On August 31, Tianqi Lithium released its 2020 semi-annual report. During the reporting period, Tianqi Lithium achieved a total operating revenue of 1.879 billion yuan, a year-on-year decrease of 27.44%; and achieved a net profit attributable to shareholders of listed companies of -697 million yuan, a year-on-year decrease of 460.15%.

Regarding the performance changes, Tianqi Lithium believes that the main reasons are that the sales volume and price of lithium chemical products and the sales price of lithium concentrate products have dropped significantly compared with the same period last year, resulting in a decrease in operating income and gross profit; the performance of the investee SQM has declined, resulting in a decrease in investment income. During the reporting period, the company's basic earnings per share and weighted average return on net assets decreased by 435.71% and 12.38 percentage points respectively compared with the same period last year, mainly due to the decrease in net profit attributable to shareholders of the listed company during the reporting period.

The semi-annual report shows that Tianqi Lithium currently relies mainly on Shehong Tianqi, Jiangsu Tianqi and Chongqing Tianqi to provide lithium carbonate, lithium hydroxide, lithium chloride and lithium metal products. The planned capacity of lithium chemical products in the medium term exceeds 110,000 tons/year; the completed capacity of Talison lithium concentrate reaches 1.34 million tons/year, and the planned capacity reaches 1.94 million tons/year. The company's overall product scale advantage is obvious. The company has become a leading supplier of lithium battery new energy core materials integrating upstream resource reserves, development and midstream lithium product processing, and has established a global sales system to achieve vertically integrated and coordinated development of upstream and downstream at home and abroad, with obvious advantages in the industrial chain, and significantly enhanced profitability and risk resistance.

Although the performance in the first half of the year was not ideal, Tianqi Lithium believes that with the active layout of downstream power battery manufacturers and the release and promotion of electrification plans of internationally renowned automakers, the global trend of automobile electrification has been established. As the main growth point of lithium demand in the future, its rapid development will provide strong support for the demand and price of lithium compounds in the future.