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MarketScreener Homepage  >  Equities  >  SHENZHEN STOCK EXCHANGE  >  Tianqi Lithium Corp    002466   CNE100000T32

TIANQI LITHIUM CORP

(002466)
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China's Tianqi Lithium first half net profit slumps, clinches LG Chem supply deal

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08/22/2019 | 09:57am EDT

BEIJING (Reuters) - China's Tianqi Lithium Corp, one of the world's biggest lithium producers, said on Thursday its first-half net profit fell 85.2% from the same period a year ago as prices slumped for the metal used in electric vehicle (EV) batteries.

Tianqi posted January-June net income of 193.4 million yuan ($27.30 million), versus 1.31 billion yuan a year earlier, according to a filing to the Shenzhen stock exchange. Revenue slid 21.3% to 2.6 billion yuan.

"Company's income had been affected by the drop of lithium chemical products prices and increasing financial costs in January-June," it said in the statement, adding it had to pay 860.7 million yuan of interest in the first half on a loan taken out to fund its purchase of a stake in Chilean miner SQM.

China is the world's largest lithium consumer, accounting for 57% of global demand in 2019, according to consultancy CRU.

But prices for lithium carbonate, a chemical used in EV batteries, have dropped by nearly 20% so far in 2019 to around $9.25 per kg, primarily due to an "avalanche of new supply intothe market", CRU said in a note on Wednesday.

At the start of this month Tianqi flagged it estimatedfirst-half profit would fall more than 84%.

For the second quarter alone, Tianqi's net income came in at82.1 million yuan, according to Reuters calculations, down 91.8%from 1.005 billion yuan a year earlier. That was the lowestquarterly profit since the third quarter of 2015.

"We will further expand our capacity and lower financialleverages to increase our profitability," said Tianqi.

The company expects its lithium chemical products output toexceed 680,000 tonnes this year, it said in the filing.

The company's Australian unit, Tianqi Lithium Kwinana PtyLtd, signed long-term supply agreement with LG Chemon Thursday, it said in another filing, without putting a value or volume on the deal.

(Reporting by Tom Daly and Min Zhang; Editing by David Evans)

Stocks mentioned in the article
ChangeLast1st jan.
LG CHEM LTD End-of-day quote.
TIANQI LITHIUM CORP End-of-day quote.
UNITED STATES DOLLAR (B) / CHINESE YUAN IN HONG KONG (USD/CNH) 0.05% 7.0855 Delayed Quote.3.17%
US DOLLAR / CHINESE YUAN RENMINBI (USD/CNY) 0.00% 7.0904 Delayed Quote.2.77%
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Financials (CNY)
Sales 2019 5 744 M
EBIT 2019 2 022 M
Net income 2019 558 M
Debt 2019 29 576 M
Yield 2019 0,20%
P/E ratio 2019 51,3x
P/E ratio 2020 14,4x
EV / Sales2019 9,99x
EV / Sales2020 7,24x
Capitalization 27 807 M
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Mean consensus OUTPERFORM
Number of Analysts 15
Average target price 33,59  CNY
Last Close Price 24,35  CNY
Spread / Highest target 235%
Spread / Average Target 37,9%
Spread / Lowest Target -13,8%
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Managers
NameTitle
Wei Wu General Manager & Director
Wei Ping Jiang Chairman
Qing Yang Chairman-Supervisory Board
Jun Zou Director, Chief Financial & Accounting Officer
An Qi Jiang Director
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