Due to the high prosperity of the downstream new energy track, the lithium battery market continues to expand, the demand for upstream raw materials has increased, and the scarcity of lithium resources has been superimposed, the price of lithium products has been rising all the way.In this context, Ganfeng Lithium and Tianqi Lithium, the “two heroes of the lithium industry”, both raised their performance expectations for the first half of the year.

01

Ganfeng Lithium's net profit is expected to increase by 4-6 times 

On July 14, Ganfeng Lithium issued an announcement,The company expects the revised net profit in the first half of the year to be 1.3-1.6 billion yuan, an increase of 730.75%-922.46% over the same period last year.Previously, in a quarterly report, the company expected to achieve a net profit of 800 million yuan to 1.2 billion yuan in the first half of the year, a year-on-year increase of 411.23%-666.85%. 

Ganfeng Lithium Industry said that the selling price of the company’s products this year exceeded expectations. In addition, the fair value of financial assets such as Pilbara held by the company has increased, which has increased its performance.

According to Ganfeng Lithium’s answers to investors’ questions at its performance briefing in April, it currently directly or indirectly owns eight high-quality lithium resources around the world. Owns 50% interest in Mount Marion spodumene mine (current output 400,000 tons/year) in Australia, 6.33% interest in Pilbara Pilgangoora spodumene mine; owns Cauchari-Olaroz lithium salt lake in Argentina (contains brine resources of approx. 24.58 million tons of LCE), 88.75% interest in Mariana lithium salt lake; 50% interest in Sonora lithium clay in Mexico; 55% interest in Avalonia spodumene mine in Ireland. In China, it owns 100% of the Ningdu Heyuan spodumene mine and 100% of the Fenghuangtai deep brine lithium mine of Qinghai Mangya Administrative Committee.

In terms of production capacity, the company will have a production capacity of 81,000 tons of lithium hydroxide, 40,500 tons of lithium carbonate, and 1,600 tons of lithium metal in 2021. In 2022, it will add 40,000 tons of battery-grade lithium carbonate to the Cauchari-Olaroz lithium salt lake project in Argentina. Production capacity; the company plans to form an annual production capacity of 100,000 tons of LCE ore lithium extraction and 100,000 tons of LCE brine and clay lithium extraction capacity in 2025. The main layout direction in the future will be the development of Argentine salt lakes and Mexican lithium clay projects. 

In recent years, Ganfeng Lithium has been buying and storing mines frequently. In the first half of this year alone, there were four large-scale acquisitions of lithium resources, with a total of 4.4 billion yuan in related funds. 

In addition, Ganfeng Lithium has also raised 4 billion yuan to expand production. On June 22, Ganfeng Lithium Industry announced that the company has completed the allotment of 48.04 million new H shares, with a total net proceeds of approximately 4.038 billion yuan, 80% of which will be used for capacity expansion and potential investment. 

As of today, the total market value of Ganfeng Lithium Industry has reached 240 billion yuan. 

02

Tianqi Lithium turns losses into profits

On the same day, Tianqi Lithium, another giant of lithium resources, also issued an upward revision forecast. In its quarterly report, the company expects a net profit loss attributable to shareholders of 250 million to 130 million yuan in the first half of this year.；After this revision, the company expects a profit of 78 million to 116 million yuan. 

Regarding the reason for the upward revision, Tianqi Lithium pointed out that during the reporting period, the company’s SQM (Smart Mining Chemical) Class B share collar option business generated more fair value changes than expected, and the above-mentioned collar option business caused Gains and losses from changes in fair value are non-recurring gains and losses; in addition, the sales volume and average sales price of the company's main lithium compound products have increased more than expected.

In terms of lithium ore resources, Australia's Talison, which Tianqi Lithium has a stake in, has the world's highest-grade, largest reserves, and lowest-cost solid spodumene mine, with 8.78 million tons of lithium resource reserves. The second phase of Talison has been completed in 2019. It has an annual production capacity of 1.34 million tons of lithium concentrate and is expected to start the third phase in 2025. The Kwanana plant under Thaleson is the first world-class lithium hydroxide automated factory with a production capacity of over 20,000 tons of lithium hydroxide. 

In 2018, the company acquired a 23.77% stake in SQM (Atacama Salt Lake) in Chile through debt, becoming its second largest shareholder. SQM is a lithium storage pool with high lithium concentration, large reserves and mature mining conditions in the world. It has 45.51 million tons of lithium reserves. The company's executives stated at the annual general meeting in May this year that SQM's production capacity in 2021 will be expanded to 120,000 tons of lithium carbonate and 21,500 tons of lithium hydroxide. 

From a domestic point of view, Tianqi Lithium owns the prospecting rights of the Yajiang Cuola Mine in Sichuan, the Zabuye Salt Lake Lithium Mine in Tibet, and the Ganzi Meka Lithium Mine in Sichuan. The world's largest hard rock lithium hydroxide resource reserve lithium mine, in addition, the company also has the world's first fully automatic lithium carbonate factory in Zhangjiagang. In terms of strategic investment, the company has participated in Xiamen Tungsten New Energy, SES, etc., the latter has leading metal lithium solid-state battery technology. 

At present, Tianqi Lithium has a total production capacity of about 44,800 tons/year of lithium chemical products. In addition, the company also has projects under construction of 48,000 tons/year of lithium hydroxide and 20,000 tons/year of battery-grade lithium carbonate. The planned production capacity of lithium chemical products in the medium term exceeds 110,000 tons/year. 

As of today, the total market value of Tianqi Lithium has reached 113.5 billion yuan.

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