Author: Li Xiangdong
On July 13, the lithium mining giant Tianqi Lithium was officially listed on the Hong Kong Stock Exchange, and it became the third lithium company to be listed with “A+H” shares after Ganfeng Lithium and Zijin Mining. The announcement shows that Tianqi Lithium’s H-share issuance price is HK$82, and the issuance price is the upper limit of the inquiry range. The company’s total proceeds from the global offering are expected to be approximately HK$13.458 billion, which is expected to be the largest IPO on the Hong Kong Stock Exchange this year.
In recent years, affected by the rapid growth of downstream new energy vehicles, energy storage and other industries, the demand for lithium salt products has been strong, the price has been rising, and the performance of related companies has grown rapidly. In the secondary market, the lithium sector is also attracting gold. Taking Tianqi Lithium A shares as an example, according to the statistics of Dongcai Choice, as of the close of trading on July 7, its stock price has risen by as much as 35.38% this year, hitting a record high. The total market value reached 210 billion.
With this listing in Hong Kong, Tianqi Lithium has once again gained widespread attention from the capital market. In the prospectus, Tianqi Lithium disclosed the identities of 7 cornerstone investors, 5 of which (China Innovation Aviation, Defang Nano, LG Chem, Sichuan Energy Investment and Zijin Mining) are well-known enterprises in the lithium battery industry chain or their affiliates , and maintain a good cooperative relationship with Tianqi Lithium Industry. Taking LG Chem and German Nano as an example, before disclosing the cornerstone investors, Tianqi Lithium successively announced that they had reached a long-term supply agreement with them.
The “real money” of industrial capital is in favor; the popularity of the secondary market is enduring; the issuance of H shares is booming… Tianqi Lithium, as the darling of capital, what is the underlying logic of its core advantages and growth?
Blowout growth of new energy vehicle industry
Strong demand for lithium resources
In recent years, countries around the world have vigorously developed the new energy vehicle industry. my country’s “New Energy Vehicle Industry Development Plan (2021-2035)” pointed out that the development of new energy vehicles is the only way for my country to move from a big automobile country to a strong automobile country, and it is a strategic measure to deal with climate change and promote green development. The sales of new energy vehicles will reach about 20% of the total sales of new vehicles. Today, my country has become the world‘s largest new energy vehicle market. IDC predicts that the size of my country’s new energy vehicle market is expected to reach about 12.99 million in 2025; the compound annual growth rate from 2021 to 2025 is as high as 38%.
The explosive growth of the new energy automobile industry and the rapid development of energy storage and other fields have brought about a strong market demand for lithium resources. Industry analysts pointed out that lithium mines have a long construction or expansion period, and the current expansion rate of lithium mines is difficult to meet the explosive growth of demand; in addition, high-quality lithium mine resources that are easy to develop and have better economic benefits are relatively scarce, and new lithium mines The resource endowment is often poor, and it is easily affected by various factors such as infrastructure and environmental protection policies, and there is uncertainty in the development progress. It is expected that the global supply and demand of lithium resources will continue to be tight from 2022 to 2025, and the price of lithium salts will remain high.
Resource is king to achieve 100% self-sufficiency
The strong Hengqiang expands its global business layout
The reserves, grades, mining conditions and other factors of mineral resources cannot be changed artificially. Because of this, the mining of lithium ore resources has the strongest voice in the entire industry chain and is the first link of the industry value chain. The strong market demand has also led to an intensifying battle for lithium resources around the world.
Tianqi Lithium is the world‘s leading new energy material company with lithium as its core. High-quality raw materials are a prerequisite for the sustainable development of the company. Throughout the development history of Tianqi Lithium Industry, although it has gone through ups and downs, the company has a profound insight into the development trend of the industry, and the unity of knowledge and action has firmly grasped the throat of destiny. As early as 2014, Tianqi Lithium acquired the world‘s highest quality spodumene mines; in 2018, it spent huge sums of money to acquire the equity of SQM, the operator of the world‘s highest quality salt lake Atacama Salt Lake, which is worth mentioning. Yes, the acquisition was criticized at the time, but the subsequent development of the industry has proved that the company has extraordinary strategic vision.
Today, Tianqi Lithium takes overseas Greenbush Lithium Mine as its raw material base and domestic Yajiang Cuola Lithium Mine as its resource development, and has strategically invested in overseas Akatama Salt Lake and domestic Zabuye Salt Lake, becoming the only company in my country to achieve Producer of lithium products with 100% self-sufficient raw materials and fully vertically integrated lithium mines.
The company’s cost of lithium carbonate extraction is almost the same as that of domestic salt lake enterprises with the advantage of low cost, which is also directly reflected in the company’s excellent profitability and strong performance certainty. In 2021, as the second largest supplier of lithium compounds and derivatives in China and Asia, Tianqi Lithium will have a total annual production capacity of 44,800 tons of refined lithium compounds. The total annual production capacity is expected to exceed 110,000 tons. With the continuous growth of downstream demand for lithium resources, the company’s gradually expanding production capacity will eventually be transformed into rapid growth performance, and it will also become the company’s strong and strong password.
The landing on the Hong Kong Stock Exchange is of great significance to Tianqi Lithium. On the one hand, the company’s capital structure will be further optimized, and the leverage ratio and financial risks will be further reduced. On the other hand, it will also help to expand overseas financing channels and further enhance its international reputation. and influence, laying a good foundation for the continued implementation of the internationalization strategy in the future.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
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