Summary of Tianqi Lithium Conference Call Company Overview - **Company**: Tianqi Lithium (9696.HK) - **Fiscal Year**: FY25 Key Financial Highlights - **Net Profit**: Reported at Rmb463 million for FY25, returning to positive territory, consistent with preliminary results alert [1] - **4Q25 Net Profit**: Achieved Rmb283 million, representing a 196% quarter-over-quarter increase, driven by rising lithium and spodumene prices due to strong demand in the energy storage systems (ESS) sector [1] - **Gross Profit**: Lithium compounds gross profit was Rmb1.6 billion, down 43% year-over-year, while spodumene gross profit was Rmb2.4 billion, down 23% year-over-year, contributing 40% and 60% to total gross profit respectively [2] - **Free Cash Flow**: Turned negative for the first time since 2021, with a free cash outflow of Rmb643 million due to capital expenditures of Rmb3.6 billion primarily for Greenbushes CGP3 and new capacity in Jiangsu [3] Market Performance - **Current Share Price**: HK$47.80 as of March 30, 2026 [4] - **Target Price**: HK$61.00, indicating an expected share price return of 27.6% [4] - **Market Capitalization**: Approximately HK$110.7 billion (US$14.1 billion) [4] Future Outlook - **Expected Recovery**: Anticipated further recovery in results during 1Q26 due to ongoing price surges in lithium and spodumene and ramping up of new capacity [1] - **Key Events to Monitor**: 1. Impact of cost inflation and potential supply disruptions on Greenbushes production 2. Allocation of funds raised from H-share placement and convertible bonds for new projects, particularly the spodumene mine under Group and Cuola Mine [1] Valuation Metrics - **P/B Ratios**: Tianqi Lithium A/H shares currently trade at 2.1x and 1.5x 2026E P/B respectively [3] - **Valuation Methodology**: H-shares valued at HK$61.0 based on a 1.82x 2026E P/B multiple, reflecting a 30% discount to A-share target P/B [9] Risks - **Key Downside Risks**: 1. Share dilution from SQM stake holding due to M&A activities 2. Lower-than-expected demand for lithium-ion batteries 3. Unexpected production cuts from Greenbushes [10][12] Additional Insights - **Net Gearing**: Reported at 18% [3] - **Operating Cash Flow (OCF)**: Rmb2,961 million for FY25, indicating a significant capital expenditure impact [3] - **Earnings Summary**: - 2023A Net Profit: Rmb7,297 million - 2024A Net Profit: -Rmb7,905 million - 2025E Net Profit: Rmb857 million - 2026E Net Profit: Rmb2,506 million [6] This summary encapsulates the essential financial metrics, market performance, future outlook, and risks associated with Tianqi Lithium, providing a comprehensive overview for potential investors and stakeholders.

Summary of Conference Call on China Battery Materials Industry Overview - The focus of the conference call was on the lithium market within the China battery materials industry, particularly in relation to electric vehicles (NEV) and energy storage systems (ESS) [1][2]. Key Points Demand and Pricing - Industry contacts expressed a conservative outlook on near-term demand for lithium and its average selling price (ASP) due to: - Gloomy demand for NEVs - Anticipated pull-forward of some battery demand into Q1 2026 due to export tax rebates [1] - Despite short-term concerns, there is a positive sentiment regarding full-year lithium dynamics, with recommendations to buy lithium [1]. Supply Dynamics - Factors contributing to potential supply constraints include: - An export ban from Zimbabwe expected to impact supply starting in May 2026, with an uncertain timeline [1] - Delays in the resumption of JXW operations, which may take longer than anticipated [1] - Licensing procedures for remaining lepidolite mines, indicating further downside risks to FY26 lithium supply [1] Production Estimates - Industry contacts forecast a significant increase in global NEV and ESS battery production in 2026: - An estimated 15% year-over-year (YoY) increase in NEV production - An estimated 80% YoY increase in ESS battery production - Overall, a projected growth rate of over 30% YoY in global battery production [1]. Pricing Trends - Lithium carbonate (Li2CO3) and lithium hydroxide (LiOH) ASPs were reported as follows: - Li2CO3 ASP at Rmb158,000 per ton, slightly up from Rmb156,000 per ton the previous week - LiOH ASP at Rmb150,500 per ton, up from Rmb152,500 per ton [2]. - Production of Li2CO3 in China increased by 4% week-over-week (WoW) to 23,426 tons, with contributions from various sources: - Brine: +1% WoW - Lepidolite: +4% WoW - Spodumene: +4% WoW - Recycled materials: +4% WoW [2]. Inventory Levels - Total inventory of Li2CO3 was reported at 98,959 tons, remaining largely flat WoW. Breakdown of inventory changes included: - Downstream players (mainly cathode makers): +4% to 45,647 tons - Smelters: -7% to 16,292 tons - Battery makers and traders: -3% to 37,020 tons [2]. Additional Insights - The overall sentiment in the lithium market reflects a cautious optimism, with expectations of robust growth in battery production despite short-term challenges in demand and supply [1][2].

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Lithium and Energy Storage Systems (ESS) - **Context**: The lithium market has experienced significant price fluctuations and demand shifts, particularly influenced by the deployment of ESS since mid-2025 [1][6]. Core Insights Demand Dynamics - **ESS Demand Surge**: The transition from a feed-in tariff model to market pricing in China's renewable energy sector has led to a 76% year-over-year increase in global ESS shipments, reaching 612 GWh in 2025. ESS now accounts for 25% of lithium demand from batteries [3][15]. - **Future Outlook for ESS**: Continued growth in ESS is expected, with shipments projected to increase by 50-80% year-over-year in 2026, potentially leading to a 118% increase in lithium consumption for ESS to approximately 410 kt LCE [14][15]. EV Market Challenges - **Declining EV Sales**: The global electric vehicle (EV) market is showing signs of slowing down, with a 20% year-over-year decline in January EV sales in China and a projected 10.4% growth in 2026, down from 28% in 2025 [4][27][29]. - **Impact on Lithium Demand**: EVs accounted for 56% of lithium demand in 2025. The anticipated slowdown in EV sales is likely to negatively impact lithium prices, as demand from EVs is expected to decrease [4][26]. Supply Adjustments - **Supply Response**: Following a period of mine suspensions and capital expenditure cuts due to falling prices, producers are now considering restarting operations in response to rising prices. Notable examples include Core Lithium and CATL, which are evaluating options to restart production [5][39][40]. - **Production Growth**: Supply growth is expected to reach 23% in 2026, driven by new projects and ramp-ups, particularly in China and Argentina [40]. Price Outlook - **Current Price Trends**: Lithium prices have tripled since mid-2025, peaking at $22,350/kg in January 2026. However, the market may be overextended, with a forecasted price of $15,000/t LCE for the second half of 2026 [1][11][43]. - **Risks to Price Stability**: The potential for a surplus in lithium supply due to a slowdown in EV demand and the restart of previously suspended mines poses risks to price stability [43][45]. Additional Considerations - **Policy Changes in China**: The reduction and eventual elimination of the VAT export tax rebate on battery products may front-load some demand but could cloud the future outlook for exports [3][15]. - **Cost Pressures**: Rising costs of battery materials, including a 40% increase in LFP cell material costs since late 2025, may impact investment returns and further influence the market dynamics [15][18]. Conclusion - The lithium market is at a critical juncture, with strong demand from ESS but significant challenges from the slowing EV sector. The interplay between these factors will be crucial in determining future price movements and supply dynamics in the lithium industry.