Minsheng Securities·2024-03-30 16:00Investment Rating - The report maintains a "Recommended" rating for Tianqi Lithium Industries, with a target price of 47.97 CNY [4]. Core Views - The company reported a revenue of 40.5 billion CNY in 2023, a slight increase of 0.1% year-on-year, but a significant decline in net profit by 69.8% to 7.3 billion CNY [2][3]. - The rapid decline in lithium prices has adversely affected the company's profitability, particularly in the smelting segment, where costs have increased due to a lag in price adjustments [2][3]. - The company plans to distribute a cash dividend of 2.22 billion CNY [2]. Summary by Sections Financial Performance - In Q4 2023, the company reported a revenue of 7.1 billion CNY, down 55.0% quarter-on-quarter and 17.2% year-on-year, with a net loss of 800 million CNY [2]. - The average price of lithium carbonate fell by 47.3% to 256,000 CNY/ton, and lithium hydroxide by 41.9% to 272,000 CNY/ton in 2023 [2][3]. - The company’s inventory of lithium concentrate stood at 409,000 tons at the end of 2023, an increase of 113,000 tons year-on-year [2]. Production and Sales - The production of lithium concentrate from Greenbushes reached 1.522 million tons in 2023, a year-on-year increase of 12.9%, with the company holding a 26% stake [2][3]. - The company’s own lithium salt production was 51,000 tons, a 7.3% increase year-on-year, while sales decreased by 2.5% to 57,000 tons [2]. Investment and Future Outlook - The company holds a significant stake in SQM, contributing 3.13 billion CNY in investment income in 2023, despite a 48% decline in SQM's net profit [3]. - Future production capacity expansions are underway, including projects in Sichuan and Jiangsu, expected to enhance output significantly by 2025 [3]. - The pricing mechanism for lithium concentrate will shift from quarterly to monthly starting in 2024, which is anticipated to improve profitability in the smelting segment [3].