Investment Rating - The investment rating for the company is "Add" [1] Core Views - The report indicates that Tianqi Lithium is a leading player in the upstream integrated lithium salt industry, focusing on strengthening upstream operations, enhancing midstream capabilities, and penetrating downstream markets. The company faced significant losses in H1 2024 due to high-priced inventory and substantial tax provisions from its associate SQM. However, as high-priced inventory is gradually consumed and new low-cost lithium concentrate is added, the company's performance is expected to improve in H2 2024. Long-term, the company benefits from the low-cost equity mine advantage of Talison, positioning it among the top in profitability within the industry. The report maintains the "Add" rating and encourages investors to pay attention [1]. Financial Performance Summary - In H1 2024, the company's revenue decreased by 74.2% year-on-year to 6.4 billion yuan, with lithium salt revenue down 56.3% to 3.83 billion yuan and lithium concentrate revenue down 84.0% to 2.57 billion yuan. The production of lithium concentrate from the Talison mine, in which Tianqi holds a 26.01% stake, saw a year-on-year decline of 18% in output to 612,000 tons and a 7% decline in sales volume to 713,000 tons, with an average selling price down 82% to 1,024 USD/ton [1][2]. - The net profit attributable to shareholders for H1 2024 was -5.2 billion yuan, a sharp decline compared to 6.45 billion yuan in H1 2023 and 830 million yuan in H2 2023. The losses were attributed to falling lithium prices and high-priced inventory, alongside a net loss of 1.14 billion yuan from SQM due to price declines in lithium and fertilizer products [1][2]. - The company’s lithium resource advantage is highlighted, with all lithium concentrate used for lithium salt production sourced from Talison. The report notes ongoing development of the Yajiang Cuola mine and investments in SQM's Atacama and Zhabuye salt lakes [1]. Production Capacity and Expansion - As of the end of H1 2024, Tianqi Lithium's annual lithium salt production capacity was 88,600 tons, with plans for further expansion including 24,000 tons from the second phase of the Kwinana lithium hydroxide project and 30,000 tons from Zhangjiagang [1][2]. - The report emphasizes the company's strategy to deepen cooperation with downstream industries through investments in new energy materials, power batteries, solid-state batteries, and electric vehicles [1].
天齐锂业：高价库存扰动逐步淡化，预计2024H2业绩环比改善