Tianqi Lithium Corporation (09696) issues a profit warning, expects annual net loss attributable to shareholders to be between 7.1 billion yuan and 8.2 billion yuan.

Tianqi Lithium Corporation (09696) announced that the expected loss attributable to shareholders of the Company for the year ended December 31, 2024 is estimated to be between RMB 7.1 billion and 8.2 billion, compared to RMB 7.297 billion in the same period last year. The expected loss after deducting non-recurring gains and losses is estimated to be between RMB 7.1 billion and 8.2 billion, compared to RMB 7.1765 billion in the same period last year. The basic loss per share is expected to be between RMB 4.33 and 5.00 (compared to basic earnings per share of RMB 4.45 in the same period last year). The Board believes that the main reasons for the change in the Company's performance in 2024 are: 1. Although the sales volume of lithium compounds and derivatives achieved year-on-year and quarter-on-quarter growth in 2024 and in the fourth quarter of 2024, the overall market price of lithium products showed a significant downward trend due to market fluctuations. This resulted in a significant decrease in the Company's lithium product sales prices and gross profit compared to the same period last year. Additionally, due to a mismatch in the pricing mechanisms of chemical-grade lithium concentrate of the Company's subsidiary Talison Lithium Pty Ltd (Talison) and the Company's lithium chemical product sales pricing mechanism, the Company experienced a phase of operational losses in this reporting period. In 2024, the market price of chemical-grade lithium concentrate gradually decreased, and the prices of lithium concentrate newly purchased from Talison also decreased. As the newly purchased low-cost lithium concentrate is gradually stored and the existing inventory is gradually depleted, the cost of chemical-grade lithium concentrate consumed in the Company's production bases is gradually approaching the latest purchase price, and the impact of the mismatch in the lithium concentrate pricing mechanism is gradually diminishing. 2. As of the date of this announcement, the Company's key joint venture, Sociedad Qumica y Minera de Chile S.A. (SQM, a Chilean chemical and mining company), has not yet reported its financial performance for the fourth quarter of 2024. The Company has consulted all reliable information available and used financial calculation models based on Bloomberg's forecasted information on SQM's earnings per share for the fourth quarter of 2024 to calculate the Company's investment income in SQM for the same period. In addition, SQM revealed in its first quarter of 2024 financial report that the Santiago Court in Chile ruled on the tax litigation for its 2017 and 2018 tax years in April 2024, overturning the tax and customs court's conclusion on November 7, 2022, which resulted in the confirmation of approximately USD 1.1 billion in income tax expenses, corresponding to a reduction of its net profit by approximately USD 1.1 billion. According to the aforementioned Bloomberg forecast data, SQM's financial performance for 2024 is expected to decrease significantly year-on-year, resulting in a significant decrease in the investment income in SQM recognized by the Company in this reporting period compared to the 2023 financial year. 3. In accordance with relevant regulations such as Enterprise Accounting Standards No. 8 - Impairment of Assets, the Company conducted an analysis and evaluation of the "Annual Production of 24,000 Tons of Battery-Grade Lithium Hydroxide Monohydrate Project" and the "Second Phase Annual Production of 24,000 Tons of Battery-Grade Lithium Hydroxide Monohydrate Project" ("Overseas Lithium Hydroxide Project") and performed impairment tests based on prudence. Due to the principle of conservatism, it is expected that the impairment losses recognized by the Company in this reporting period will increase compared to the 2023 financial year. 4. Since 2024, the US dollar has continued to strengthen, and the exchange rate fluctuations of the Australian dollar and the Renminbi against the US dollar in this reporting period have resulted in an increase in exchange losses compared to the 2023 financial year.