Tianqi Lithium’s shares declined even though the Chinese mining giant reported a net profit increase of almost 1,200% in the third quarter due to strong product demand.
Tianqi Lithium’s Shenzhen-listed stock [SHE: 002466] slid 3.4 percent to close at CNY92.44 (USD12.70). The equity is 8 percent down this year.
Its Hong Kong-listed shares [HK:9696] fell by 4.5 percent to HKD63.85 (USD8.10), resulting in a more than 20 percent decrease so far this year.
The lithium supplier’s net profit jumped nearly 13 times to CNY5.7 billion (USD780 million) in the third quarter from a year ago, the Chengdu-based company said in its earnings report yesterday. From January to September, its net profit soared by 29 times to CNY16 billion (USD2.2 billion) from a year earlier.
The company had revealed some of its key performance factors in its third-quarter forecast earlier. Lithium-ion battery manufacturers expanded their capacity quicker over the quarter, and downstream cathode material orders picked up while sales volumes and prices rose significantly, the firm said.
From July to September, Tianqi Lithium’s asset-liability ratio decreased by 25.5 percent from a year earlier while the gross profit margin was as high as 85.5 percent. The reason is that the company could use proceeds from its July listing in Hong Kong to repay an HKD9.7 billion (USD1.2 billion) bank loan allocated to acquire a Chilean lithium mine.
The firm is still actively exploring its layout of lithium resources and expanding its output of lithium salts, it said.
In China, prices of lithium salts have reached new record highs this month. The price of battery-grade lithium carbonate rose by CNY3,000 (USD413) to an average of CNY551,000 (USD75,873) per ton today, according to data from the Shanghai Metals Market. That of industrial lithium carbonate increased by CNY2,000 to CNY526,000 per ton, another record high.
