Lithium Mining Giant Tianqi Lithium Listed on HKEx

Lithium mining giant Tianqi Lithium was listed on the Hong Kong Stock Exchange on July 13. Its stock fell as much as 11%, hitting a low of HK$ 72.65 ($9.25). The closing price sat at HK$128.6, with a total market value of HK$211.1 billion.

“Don’t care about the ups and downs of the stock price. There is nothing to worry about except the fundamentals of the company,” instructed Frank Xia, Executive Director and CEO of Tianqi Lithium, “The stock market is a free financial trading market. Generally speaking, it cannot be controlled by enterprises, and it is normal to see such fluctuations.”

According to the company’s announcement, the offer price range was initially determined to be HK$69 to HK$82, with a proposed fundraising of HK$13.4 billion.

Tianqi Lithium’s profit in Q1 of this year has already reached 1.6 times that of the whole of last year. In 2021, the company’s operating income was 7.663 billion yuan ($976.15 million), a year-on-year increase of 136.56%, and its net profit was 2.079 billion yuan, up 213.37% year-on-year. In Q1 of 2022, the company’s operating income was 5.257 billion yuan, a year-on-year increase of 481.41%, while the net profit attributed to parent company was 3.328 billion yuan, a year-on-year increase of 1442.65%.

Behind the rapid growth of net profit is the rising price of lithium and the promotion of downstream demand. According to the Shanghai Metals Market (SMM), as of March this year, the prices of lithium carbonate and lithium hydroxide have increased by more than 8 times compared with the prices at the beginning of December 2020.

As for the price of lithium itself, Xia believes that it depends on a scientific relationship between supply and demand. According to the current supply and demand, supply cannot keep up with demand in the short term. As long as there is a gap between supply and demand, the company, according to Xia, is confident in the price of lithium.

Tianqi Lithium’s holding subsidiary owns the lithium mining rights of Greenbush Mine, the largest lithium mine in the world. With the high-quality and low-cost lithium concentrate from the Greenbush Mine, the company is able to be self-sufficient in regard to its lithium raw materials.

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In the future, the demand for lithium will be further increased with the development of downstream power batteries and energy storage batteries. According to Wood Mackenzie’s forecast, the Lithium Carbonate Equivalent (LCE) demand of lithium resources from 2021 to 2023 will be 520,000 tons, 658,000 tons and 797,000 tons respectively.