TLC(002466) Ping An Securities·2024-10-31 09:31Investment Rating - The investment rating for Tianqi Lithium Industries is "Recommended (Maintain)" [1] Core Views - The company reported a significant decrease in revenue and net profit for Q3 2024, with revenue at 3.646 billion yuan, down 57.48% year-on-year, and a net loss of 496 million yuan, down 130.11% year-on-year [4][5] - Despite the challenges, the company has seen growth in lithium product sales and production, with a notable reduction in losses compared to previous quarters [7][10] - The lithium price has dropped significantly, but the report suggests that the downside potential for prices is limited due to rising production costs and a potential market clearing as unprofitable producers exit [9][10] Summary by Sections Financial Performance - For Q3 2024, the company achieved revenue of 3.646 billion yuan, a year-on-year decrease of 57.48%, and a net loss of 496 million yuan, a year-on-year increase in losses of 130.11% [4] - For the first three quarters of 2024, revenue totaled 10.065 billion yuan, down 69.87% year-on-year, with a net loss of 5.701 billion yuan, reflecting a 170.40% increase in losses year-on-year [4] Market Conditions - The lithium market has faced downward pressure due to increased competition and inventory accumulation, leading to a significant decline in lithium prices [6] - The average selling price of lithium concentrate decreased by 28.8% quarter-on-quarter in Q3 2024, with a year-on-year decline of 61.1% [6] - The average selling price of battery-grade lithium carbonate also saw a quarter-on-quarter decrease of 24.5% and a year-on-year decrease of 55.5% [6] Production and Capacity - The company has successfully ramped up production capacity with the launch of a new lithium carbonate project, resulting in increased sales volumes for lithium compounds and derivatives [7] - Sales volume for lithium compounds and derivatives increased by 67.71% year-on-year for the first three quarters of 2024, with a quarter-on-quarter increase of 24.69% in Q3 [7] Future Outlook - The report indicates that the lithium price has reached a low level, with limited downside potential, and anticipates a gradual recovery in demand from the electric vehicle and energy storage sectors [9][10] - The company is expected to see a gradual improvement in performance due to its strong resource endowment and planned new projects in both mining and metallurgy [10]