The battle for lithium salt slowly kicked off
In recent years, benefiting from the rapid growth of China's demand for new energy (electric) vehicles and energy storage, my country's lithium battery industry, especially the power lithium battery industry, has ushered in an explosive period of development, and the industry's long-term prospects are optimistic by all parties. Therefore, many listed companies have deployed lithium batteries in an attempt to grab a share. For a time, lithium battery concept stocks have emerged one after another, and it is difficult to distinguish between true and false. To this end, this article deliberately sorts out the listed companies in the lithium battery industry and analyzes their finances to help readers gain a deeper and more thorough understanding of the current state of the industry. This series divides the lithium battery industry enterprises into: upstream resource and raw material enterprises, midstream battery material enterprises and downstream battery enterprises. This article is the upstream lithium resources and raw material article.
According to institutional analysis, my country's lithium battery shipments reached 74.8Gwh in 2017, accounting for 52.1% of global shipments; among them, automotive power lithium battery (EVLIB) shipments reached 38.0Gwh, accounting for the global automotive power lithium battery (EVLIB) shipments reached 38.0Gwh. ) shipments 65.4%. In 2016, my country's lithium power battery shipments were 30.5Gwh, and in 2015, it was 17.0Gwh.
The growth of lithium battery shipments has also driven the rapid growth of upstream lithium compound demand. According to the preliminary statistics of the Lithium Industry Branch of China Nonferrous Metals Industry Association, the world output of lithium and its derivatives in 2017 was about 235,400 tons of lithium carbonate equivalent, a year-on-year increase of 21.5%; among which, my country's lithium salt output was 123,400 tons, a year-on-year increase of 43.5%; In 2017, the global lithium consumption was equivalent to about 237,000 tons of lithium carbonate, an increase of about 15% year-on-year; the global supply of lithium compounds was in a tight balance throughout the year, and the price of lithium carbonate also rose from 120,000 to 30,000 yuan/ton at the beginning of the year. 70,000 yuan / ton, and even reached 180,000 yuan / ton at the highest; among them, the highest increase of battery-grade lithium carbonate reached 47.54%, and the increase of industrial-grade lithium carbonate was 52.73%.
The rapid rise in the price of lithium salt raw materials such as lithium carbonate has not only promoted the expansion of production capacity of original enterprises, but also attracted a large number of outsiders to enter. A battle for lithium salt is slowly kicking off.
Tianqi Lithium is one of the top five lithium ore suppliers in the world. Its main business includes: development of solid lithium ore resources, production of lithium chemical products and lithium ore trade. The main product varieties include chemical grade lithium concentrate, technical grade lithium concentrate, industrial grade lithium carbonate, battery grade lithium carbonate, industrial grade lithium hydroxide, battery grade lithium hydroxide, anhydrous lithium chloride, metal lithium and other lithium chemical products .
In 2017, benefiting from the high price of lithium carbonate and the increase in demand, the performance of Tianqi Lithium increased significantly: the sales volume of lithium concentrate increased by 29.84% over the previous year to 407,200 tons, and the average sales price increased by 27.04% over the previous year; lithium The sales volume of chemical products increased by 33.28% over the previous year, reaching 32,400 tons; the annual operating income was 5.47 billion yuan, an increase of 40.09% over the same period of the previous year; the comprehensive gross profit margin of the products was 70.14% (see Table 1); Shareholders' net profit was 2.145 billion yuan, an increase of 41.86% over the same period of the previous year.
Good performance and high lithium product prices have brought Tianqi Lithium more confidence and greater ambition. According to the financial report, Tianqi Lithium Industry will vigorously promote capacity expansion in 2018: the Suining Anju 20,000-ton lithium carbonate project is stepping up its feasibility study and other preliminary preparations, and Australia's total 48,000-ton battery-grade lithium hydroxide monohydrate construction project is currently under construction. In an orderly implementation, the first phase of 24,000 tons is expected to be completed by the end of 2018, and the second phase will be completed by the end of 2019; the Shehong base and Zhangjiagang base continue to implement technical renovations, and the Chongqing Tianqi lithium metal and lithium profile production lines are optimized and improved during the repair. In addition to the current lithium salt production capacity of 34,000 tons/year, including 5,000 tons of lithium hydroxide and 29,000 tons of lithium carbonate, it is expected that Tianqi Lithium Industry's lithium salt production capacity will exceed 100,000 tons by 2020.
In addition to maintaining confidence in the market, Tianqi Lithium's expansion is more based on preparation for its own competitiveness.
First, the resource reserves are sufficient. Tianqi Lithium currently has solid lithium ore resources and is involved in salt lake resources. Its holding company, Talison, has the largest reserves and the best quality spodumene mine in the world - Western Australia Greenbushes (Western Australia). Greenbush Mine). According to the reserves assessment report issued by BehreDolbear Australia Pty.Limited, as of September 30, 2016, the total resources of Greenbush Lithium Mine were 165.1 million tons, equivalent to 8.33 million tons of lithium carbonate equivalent; lithium The total ore reserves are 86.4 million tons, equivalent to 5 million tons of lithium carbonate equivalent.
Its wholly-owned subsidiary, Shenghe Lithium, owns the mining rights of the Cuola spodumene mine in Yajiang County, Sichuan. The amount of ore identified in this mining area is 19.714 million tons, which is equivalent to 255,744 tons of lithium oxide resources. The average grade of lithium oxide is 1.3%, equivalent to lithium carbonate. About 630,000 tons.
The second is adequate financial preparation. In 2017, the asset ratio of Tianqi Lithium was only 40.39% (see Table 2), the current ratio was 3.11, and the proportion of currency assets in current assets was as high as 70.24%, which means that its currency assets were twice the current value without any compensation. Debt pressure. Its monetary funds amounted to 5.524 billion yuan, financing activities increased by 2.264 billion yuan, and operating activities increased by 3.095 billion yuan; obviously, Tianqi Lithium has made sufficient financial preparations for capacity expansion.
The third is cost control and research investment. In 2017, Tianqi Lithium's R&D investment was 28.55 million yuan, a year-on-year increase of 342%. While vigorously increasing investment in research and development, strictly control other expenses (see Table 3), which is obviously conducive to improving its gross profit margin and competitiveness.
Tianqi Lithium has made adequate preparations for future competition. As an old domestic rival, Ganfeng Lithium is not far behind.
Layout of Ganfeng Lithium Industry
Ganfeng Lithium is also one of the top five suppliers of lithium compounds and metal lithium in the world. Its business covers upstream lithium extraction, midstream lithium compound and metal lithium processing, and downstream lithium battery production and recycling, including: upstream lithium resource extraction, lithium compound production The five major businesses are deep processing, metal lithium production, lithium battery production and lithium secondary utilization and recycling.
In 2017, Ganfeng Lithium's performance increased significantly: operating income increased from 2.844 billion yuan in 2016 to 4.383 billion yuan in 2017, a growth rate of 54.12%; net profit attributable to shareholders of listed companies increased from 464 million yuan in 2016 It increased to 1.469 billion yuan in 2017, a growth rate of 216.36%. The company's total assets increased from 3.809 billion yuan in 2016 to 8 billion yuan in 2017, a growth rate of 110.02%; net assets increased from 2.488 billion yuan in 2016 to 4.037 billion yuan in 2017, a growth rate of 62.25%.
Like Tianqi Lithium, Ganfeng Lithium has also started its own upstream capacity expansion. On February 25, 2018, Ganfeng Lithium Industry stated that its new 20,000-ton lithium hydroxide production line has been completed and put into operation and is in the trial run stage; the 17,500-ton lithium carbonate production line that is still under construction is scheduled to be put into operation in the second half of 2018. Shanghai currently has a production capacity of nearly 40,000 tons, and by the end of 2018, its lithium salt processing capacity will reach nearly 80,000 tons.
Ganfeng Lithium has made sufficient resource layout for capacity expansion. At present, Ganfeng Lithium holds equity interests in six high-quality lithium resources located in Australia, Argentina, China and Ireland:
One is Mount Marion, the world's second largest spodumene mine in operation. MountMarion's controlled and inferred resources under JORC rules are 2.7 million tonnes of LCE with an average lithium oxide content of 1.37%. The company has entered into a long-term underwriting agreement to underwrite all the lithium concentrate produced by MountMarion from 2017 to 2020, and underwrite no less than 49% of the lithium concentrate after 2020;
The second is Mariana, a lithium-potassium salt lake located in the province of Salta, Argentina. According to a resource estimate report prepared by Geos Mining, the Mariana project has a lithium-bearing brine reserve of 1,127 million cubic meters and an indicated and inferred lithium resource of 1,866 kilotons of LCE. Preliminary exploration results indicate that Mariana has a homogeneous geochemical makeup that can be extracted at relatively low cost by conventional solar evaporation processes;
The third is Cauchari-Olaroz, a lithium salt lake in Argentina's Jujuy province. The Cauchari-Olaroz project has lithium-bearing brine reserves of 11.8 million tonnes of LCE. The company entered into an offtake agreement to purchase 80% of Lithium Americas' actual production of 50% of the first phase of the Cauchari-Olaroz resource. Cauchari-Olaroz is scheduled to start production in late 2019 or early 2020;
The fourth is Pilgangoora, one of the world's largest new spodumene mines in Western Australia. The Pilgangoora project has spodumene reserves of 4.9 million tonnes of LCE with an average lithium oxide content of 1.25%. The company entered into a long-term underwriting agreement to obtain an annual supply of 160,000 tons of lithium raw materials for an initial period of ten years. Currently, the Pilgangoora project is scheduled to start production in the second half of 2018;
The fifth is Avalonia, a spodumene mine located in Ireland, which is currently in the early stages of exploration;
The sixth is Ningdu Heyuan Mine, located in Ningdu County, Ganzhou City, Jiangxi Province. The lithium resource of Ningdu Heyuan Mine is 100,000 tons of LCE, with an average lithium oxide content of 1.03%.
In terms of financial preparation, at the end of 2017, Ganfeng Lithium’s asset ratio was 49.45% (see Table 4), the current ratio was 1.62, which was relatively healthy and had no debt repayment pressure; cash was 2.237 billion yuan, which was relatively sufficient; cost control was also good ( See Table 5).
Attack of Salt Lake Shares
Seeing the expansion of the two giants, Salt Lake shares, which are backed by salt lake resources, are not to be outdone.
Salt Lake Co., Ltd. is an old listed company in Qinghai. Its lithium carbonate business is part of the comprehensive utilization of salt lake resources. It is mainly operated by Lanke Lithium, an indirect holding subsidiary, and currently has a production capacity of 10,000 tons of lithium carbonate.
In 2017, Salt Lake achieved an operating income of 11.699 billion yuan, an increase of 12.88% over the previous year; among them, the lithium carbonate business only achieved an operating income of 748 million yuan, but the net profit reached 420 million yuan, the profit margin was as high as 56.15%, and the gross profit margin reached 68.59% (see Table 7).
Undoubtedly, increasing the production capacity of lithium products and increasing their proportion of revenue is the best means to improve the profitability of enterprises.
Therefore, on December 27, 2017, Salt Lake Co., Ltd. announced its capacity expansion plan: Salt Lake Co., Ltd. plans to start a 50,000-ton/year battery-grade lithium carbonate project. On the basis of the lithium plant, a 20,000-ton/year battery-grade lithium carbonate project will be expanded. After the expansion, the production scale will reach 30,000 tons/year. In addition, BYD Salt Lake will build a new battery-grade lithium carbonate project with an annual output of 30,000 tons/year. , After the expansion, the production capacity of Salt Lake will reach 60,000 tons.
According to the financial report, the expansion of Salt Lake Co., Ltd. is first based on the advantages of Lithium resource development in the Chaerhan Salt Lake. The potash fertilizer production of Salt Lake Co., Ltd. is calculated according to the annual output of 5 million tons, and the annual discharge of old halogen is about 200 million cubic meters per year, and its lithium ion concentration is about 200-250 mg, that is, the lithium resources in the old halogen discharged every year are equivalent to lithium chloride. It is 200,000-300,000 tons; the raw material liquid provides a reliable resource guarantee for the development of the lithium industry.
The second is technical advantage. Lanke Lithium has an annual output of 10,000 tons of lithium carbonate project. In 2010, it introduced the Russian adsorption method to extract lithium from brine, and has made breakthroughs in the key technology of extracting lithium salt from high-magnesium and low-lithium brine.
The third is cost advantage. Lanke Lithium relies on the abundant lithium resources of the Chaerhan Salt Lake and the public facilities of the Salt Lake Co., Ltd. Industrial Park. The production cost of lithium carbonate by adsorption and extraction technology has a relative advantage over its peers, and it is also suitable for the large-scale layout of the lithium industry.
At present, in view of the high debt repayment pressure of Salt Lake shares (see Table 8), the expansion of lithium carbonate production capacity will still increase its debt repayment pressure in the short term. However, after the production capacity is released, the high gross profit margin of the lithium industry will generate sufficient cash flow and profit for it, and ultimately improve its financial position.
Yahua Group's ambition
Different from the previous three cases, Yahua Group's main business is civil explosives and lithium business, and it also continues to expand overseas, transportation, and special business; among them, lithium business mainly covers upstream lithium resource guarantee, midstream lithium carbonate, lithium hydroxide Production and sales of basic lithium salt products.
In 2017, Yahua Group achieved an operating income of 2.358 billion yuan, an increase of 49.33% over the same period of the previous year; among which, the operating income of lithium products was 698 million yuan, accounting for 29.59% of the total operating income, an increase of 100.92%; the total profit was 336 million yuan Yuan, an increase of 73.21% over the same period of the previous year; the net profit attributable to shareholders of the listed company was 238 million yuan, an increase of 78.11% over the same period of the previous year; the earnings per share were 0.25 yuan, an increase of 78.57% over the same period last year.
Obviously, lithium products have a relatively large contribution to Yahua Group's operating income, but a relatively small contribution to its profits (see Table 9).
In this case, Yahua Group still increases the production capacity of lithium products. According to the financial report, Yahua Group will promote the first phase of the Ya'an project with 20,000 tons in 2018, and carry out preparations for the construction of the second phase of 20,000 tons of lithium hydroxide; Tons of lithium hydroxide production capacity, Guoli Lithium Salt (56.26% stake) 5,000 tons of lithium hydroxide and 7,000 tons of lithium carbonate production capacity, around 2019, it will have a lithium salt production capacity of 38,000 tons, and 58,000 tons in 2020. Lithium salt production capacity.
One of the reasons for Yahua Group to increase its lithium production capacity is its lithium resource guarantee. According to the financial report, Yahua Group continues to enrich the reserves of lithium ore resources for the development of the lithium industry in the future, and provides sufficient lithium resource guarantee for the development and expansion of the lithium industry: First, it has reached a long-term supply agreement with Yinhe Lithium, an important lithium concentrate producer in Australia. , to provide the most basic resource guarantee for the stable production of lithium salts of the company; the second is the Lijiagou spodumene mine in Sichuan Aba developed in cooperation with Sichuan Energy Investment, and its proven resource reserves are 512,185 tons of lithium oxide; the third is to participate in Australia Core Company, to obtain the underwriting rights of its lithium mine. It is worth mentioning that Core owns 100% of the Phoenix Lithium Mine. The mining area is about 400 square kilometers. It is located in the Northern Territory of Australia and consists of 4 mines: BP33, FarWest, Ahoy and Grants. The mine is located in the plain area. , The surrounding hydropower road facilities are complete, and it is close to the port, and the mining obstacles are small. Among them, the Grantz block has obtained the JORC standard exploration report, and there are still 25 historical pegmatite mines and several large-scale mines that have not yet been tested. of pegmatite targets to be drilled.
Resources are secured, but finances appear to be underprepared. Although Yahua Group's asset ratio is low, its solvency is average
