Qinghai Salt Lake Industry (SZ:000792)2022-12-03 09:50Group 1: Company Overview and Operations - Qinghai Salt Lake Industry Co., Ltd. has a subsidiary, Blue Lake Lithium, which operates a 10,000-ton lithium carbonate facility using advanced extraction technology from Russia [3]. - In 2017, Blue Lake Lithium produced 8,002 tons of lithium carbonate, generating revenue of CNY 744 million and a net profit of CNY 420 million [3]. - As of 2018 Q1, the company produced 1,647 tons of lithium carbonate, with revenue of CNY 111 million and a net profit of CNY 63.92 million [3]. Group 2: Financial Performance and Challenges - The company faced losses in 2017 due to high production costs, reduced sales of potassium fertilizer, and safety incidents affecting production [3][4]. - The natural gas supply issues have limited the chemical production capacity to about 90% [4]. - If natural gas supply stabilizes, the chemical division could potentially return to profitability [4]. Group 3: Production Capacity and Future Projects - The company plans to produce 10,000 tons of lithium carbonate in 2018, with current production at over 3,600 tons [3][5]. - The 2+3 million-ton battery-grade lithium carbonate project is underway, with 30% of funding sourced internally and 70% from bank loans, expected to take 18 months to complete [5]. - The company has a significant resource advantage, with an annual discharge of 200-250 million cubic meters of brine containing lithium resources equivalent to 20-30 million tons of lithium chloride [5][6]. Group 4: Market Outlook and Strategic Initiatives - The company is actively pursuing debt-to-equity swaps as part of its supply-side reform strategy [5]. - The lithium production process is expected to expand into hydroxide lithium and metallic lithium in the future [6]. - The potassium chloride market has seen price fluctuations, with expectations of a slight increase in 2018 due to rising raw material costs [6].